Rumors & Problems

The Law Office of
Susanne M. Robicsek

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NC Bankruptcy Lawyer in Charlotte North Carolina for Chapter 7 / Chapter 13

I hear things, that are said by creditors, by friends, co-workers, credit counselors, and even by lawyers who may be without a good knowledge of bankruptcy law, that are just WRONG! Scroll down to see some of them ... and please let me know if you have heard any of these rumors or if you hear any new ones.


People hear these rumors, and pass them on to others. They may want to help, but bad information isn't helping anyone and often causes a lot of harm by keeping people from meeting a lawyer who will give them the correct facts.

Creditors don't have your best interest at heart and unfortunately, many blatantly lie to people.  If you haven't spoken to a lawyer to to learn your rights, how do you tell the truth from the lies?

The Internet is a wonderful tool.  I use it all the time.  But the Internet is open to anyone who wants to post or open a business.  The Internet may give you just enough information to be dangerous. There is information that I call "advice that is correct, except when it isn't," because while there is a lot of good advice on the Internet, it can't possibly address each individual person's case.  There also is a lot of really bad advice on the Internet and you need to know how to tell which is good and which is not.  (If you knew that already, you wouldn't be looking for answers!)  


You do not have to go to a credit counselor first.  You can still speak to an attorney to get the facts on bankruptcy and other financial issues since attorneys can discuss all options and legal remedies, and compare them to each other. 

Any good attorney should give you the best approach and should not steer someone towards bankruptcy if a better way is there.  If appropriate, I do not hesitate to refer someone to United Family Services if I think they can help someone avoid bankruptcy.  I am always happy when someone doesn't need to file for bankruptcy and there is a better way for someone to solve their financial problems. 

I get maddest about bad advice from credit counselors or debt management counselors, or lawyers who don't understand the law, because people contact them thinking they are going to get help from a professional who knows the answer. These people are often online, in other states and / or via telephone.  They usually are not local or available for personal appointments to review and discuss your situation.

Just because a company is a "non-profit" that doesn't mean that people working there / who own it, aren't making a very good living from that business.  I often hear very bad advice that has been given by some of these agencies.  Many times I believe they are either lying, or at best badly mistaken. 

Don't fall for debt settlement companies that have "Law" in the title.  If you aren't working with a licensed lawyer in your own state, you are likely not working with a lawyer at all, or one who is not allowed to be giving you legal advice.   Is that who you want to trust?

Remember that if someone is not a licensed lawyer in North Carolina, it is illegal for them to give any legal advice to a North Carolina resident.  They shouldn't anyway, because they often don't know the law.  

Almost anyone can call themselves a credit counselor and there are many scams that get your money, without resolving your problems.  Be very careful, and if you are going to see a credit counselor, please be sure to seek a reputable agency, preferably one that will meet you in person, not on the phone or over the Internet.  They should start with your ability to have enough money to live on, and then if money is left over, concentrate on getting the debt paid off.   Avoid any counselor who starts with a repayment program without much regard to how you are going to live once you make the payments to them.

These agencies sometimes get a cut from the creditors.  They  may get paid for any months they can collect from you, so they want you in the program whether it works for you, or not.  Some of the people you talk to get paid just for signing you up, for making a payment or two, or they get paid a fee up front before they begin to pay/negotiate your debts.  So even if they know you will not be able to make payments (and pay your other expenses), they may want you signed up so they make money in the short term. 

Note:  If you want to meet with a credit counselor for a debt management plan, the only one I recommend is the local chapter of United Family Services Consumer Credit Counseling Service (CCCS) if you want to speak to a credit counselor, because I know they 1) meet you and 2) work with your family income budget.

Things heard from bill collectors over the years:


Debts that are not owed are being collected upon, are "under investigation" and the collector threatens jail if the debt isn't paid. 
As a general rule, you do not go to jail for not paying ordinary debts in NC, like credit cards, pay day loans, medical bills and signature loans.  There are a number of new scams being thought of each day.  Sometimes people get calls and have never heard of the debt, but are scared by the collector so badly that they pay it anyway.  Some of these scams get lucky and pick a company that the debtor is doing business with or insist that someone owes money for a debt long paid off.  Other people get calls and somehow the collector knows information about them, maybe from stolen ID information.  I hear that from people who may have give information when applying for other loans or payday advances so someone is taking information that should not be shared and using it to get money they are not owed.  


The debt is "under investigation" and not eligible for bankruptcy under the new law ...
NO.  Under investigation?  By who?  There is no agency that investigates debts other than the creditor themselves, and they are not the ones who determine if a debt is eligible for bankruptcy or not!  If they had their way, no debt would be, but they are not the ones who decide.  While it is true that some debts aren't discharged in bankruptcy, many are.  Your attorney is able to spot most of the debts that can't be discharged and discuss whether or not your debts are of that sort.  When you meet an attorney, the recommendation to file is always based upon what you are eligible for.  When pressed for information, the creditor stated that the information was "confidential" and hung up, which probably meant he should have said ..."confidentially, I don't have a leg to stand on!"


Filing bankruptcy is a big mistake and you (or your attorney) will be reported to the proper authorities if you file.
NO.  If an experienced bankruptcy attorney recommends this legal protection to you, then it is probably not a big mistake.  There are no "authorities" to report anyone to, except the United States Bankruptcy Court.  Once a bankruptcy case is filed, the Bankruptcy Judge is the ultimate authority, and your attorney will know what is required by the law and the Bankruptcy Court.  Your attorney will guide you through the process in a lawful manner, and best suited to help you.


You have to go to jail before you can file bankruptcy.
NO! There is no basis to a comment like this.  Bankruptcy has always been a place for honest people to seek shelter and get a fresh start.  While the benefits are being cut, bankruptcy will still be available for honest people, with no jail time involved.  (And yes, someone actually asked me this question because a creditor told them it was true.)


The new bankruptcy law won't let you discharge my debt anymore.  The new law won't let you discharge credit cards anymore.  The new law won't let you discharge medical bills anymore.  The new law won't let you ...  NO.  I have heard several people who said that a creditor told them that their debt can't be discharged in bankruptcy at all.  There are some types of special debts that are not discharged in bankruptcy, like some taxes, student loans or child support.  But even with some of those, bankruptcy might help.  Some of the people I have heard this from said that they heard this from creditors, collection agencies or even their friends, and it just wasn't true.  Speak to an attorney to find out if your debts are, or are not, discharged in bankruptcy.

Here are some of the rumors that have been heard, often about the changes that took place in 2005:

"You can't file bankruptcy anymore."
NO.  Bankruptcy is still available!  Some people will be not able to file Chapter 7, but many people still qualify.  After 2005, the requirements are more burdensome for both Chapters 7 and 13, but many people still find protection in the bankruptcy laws.  Do not assume that it won't help ... talk to an attorney and find out if it will help you.

"You don't "QUALIFY" for bankruptcy if you make more than a certain amount ."  (Or, you can't file bankruptcy if you make less than a certain amount.)
There is no magic threshold or dollar amount that you make that automatically qualifies, or disqualifies you from filing for bankruptcy. 

Each case is different and different types of bankruptcies help in different situations.  Talk to an experienced and knowledgeable attorney about your problems to see if help is available.

I have had people contact me who have been told (by creditors, counselors and even attorneys) that they didn't "qualify" for Chapter 7 bankruptcy just because they make over a certain amount of money.  This is not true, on it's own.   If you make above a certain amount, then your income and expenses are subject to a formula test  (the "means test") to see if you can afford to make payments in Chapter 13.  You may be unable to file Chapter 7, but there are exceptions to the formula .  You need to be sure that you have a good attorney because they will know what the exceptions are, or at least how to have the formula applied in the best light possible for you. 

"You have to see a credit counselor before you can see an attorney."
NO.  You always have the right to speak to an attorney.  An attorney will explain the laws to you, and if you decide bankruptcy is the right way for you to go, make sure you attend the required counseling  courses given by a federally approved counseling program. 

"I heard that the new law says you have to go into credit counseling for six months before you can file bankruptcy."
NO.  This is untrue.  You have to get a certificate of completion of an approved bankruptcy credit counseling course within six months of filing a bankruptcy case.  The course is available on the internet, by phone and probably in person sometime in the future as these courses [hopefully] are improved.  Your bankruptcy attorney will make sure you have the correct information and go to an approved agency if you decide to that bankruptcy is the right choice for you.

"Now that there is a new law, if you file bankruptcy you can't borrow money for 7 years."
NO.  Your credit rating and credit report can reflect your bankruptcy case for up to 10 years, however, anyone who wants to loan you money is allowed to do so.  It shocks me when my clients say they are getting offers for credit cards within months of filing (and this isn't always a good thing to do.)  There is nothing in the new law to stop lenders from continuing this practice of offering debt.

Stay tuned ........ the stories are sure to get worse.

The Law Office of Susanne M. Robicsek
1701 Scott Avenue Charlotte North Carolina 28203
phone:704 / 377-0776
fax: 704 / 377-0775

DISCLAIMER: This message is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion; Personal opinions may also be expressed. No attorney-client relationship is created by this message; Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.
 
The Law Office of Susanne M. Robicsek is
a Federally Designated Debt Relief Agency
under the Bankruptcy Code.
I file bankruptcy cases for people in financial need,
and have been doing so since 1989.

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