When there is not enough money in the household budget to pay all the required bills, consumers face a difficult choice about what bills to pay. As an Asheville bankruptcy attorney, I know it is quite common for the loudest and most annoying creditor to get paid which means more important household bills get neglected.
Make a financial plan before sending money to a debt collector.
The vast majority of North Carolinians are wise to spend their money on housing, food, medical care, and utility bills before contemplating spending their available cash on simple unsecured debts like credit cards. This choice essentially establishes a higher priority for a family’s basic needs. Of course, if a consumer has the ability to pay all of their bills each month and maintain a basic standard of living, they should do so. Most of the people I see at initial bankruptcy consultations have been struggling a long time to figure out a solution to their financial problems. By limiting emotional involvement, and treating financial choices as business decisions, people can choose to put their family first, ahead of the credit card companies, medical service providers, and other large corporate creditors which they owe money too.
One of the reasons this strategy makes sense for folks struggling to pay their bills is that wage garnishment does not exist in North Carolina for simple, unsecured debts. Our state has balanced a creditor’s need to get paid with a consumer’s right to protect a limited amount of property. A bill has been introduced in North Carolina which would upend this balance by allowing a judgment creditor to garnish up to 25% from a consumer’s wages. Currently, 60 days of wages are ‘exempt’ from creditor collection so long as those funds are necessary for the maintenance of the household. The results of the passage of this bill would be horrendous for working families, and would lead to a serious spike in bankruptcy filings.
Are you struggling to pay all of your bills each month? If would like guidance about which bills to make a priority, I would be pleased to speak with you during a free, initial bankruptcy consultation.
