If you owe more money than you have coming in each month, you have a problem. One solution to the problem might be increasing your income. However, in today’s economy this might not be practical. Besides, you would need to cover not only the principal of your debts, but also the interest and penalties, which are often the real source of financial pain to consumers. For many people, a better and more practical solution is to discharge or reduce the debts by filing for bankruptcy. By meeting with a bankruptcy attorney in Riverside CA, you can learn how bankruptcy could help you get out from under the following types of debt.
Credit Card Debts: Credit card debts are one of the most common sources of financial distress for consumers, along with medical debts and upside down mortgages. You can discharge all of your credit card debts through Chapter 7 bankruptcy, assuming you don’t exceed the income limits placed on consumers wishing to file for this type of bankruptcy.
Medical Bills: If you owe a hospital, doctor, or clinic money for medical treatment, filing for bankruptcy may help. A bankruptcy attorney Riverside CA can help you get out from under these debts without necessarily forfeiting assets like your home or car.
Utility Bills: Utility bills can definitely pile up. While the good news is that utility companies can’t shut off your vital utilities if you have young children or are otherwise vulnerable, you will still want to avoid these types of debts. You can discharge them through Chapter 7, assuming you can pass the California Means Test.
Back Taxes: If you owe income taxes that are more than three years old, you could qualify to have these debts discharged in a Chapter 7 bankruptcy, assuming you filed your taxes on time and did not attempt to defraud the government on your income tax returns.
Home and Vehicle Loans: Because these types of loans are secured debts (ie they are backed by tangible property) they are not eligible to be discharged in Chapter 7, but you can reduce them with Chapter 13. If you file for Chapter 7, you must either give up the property or continue to make your regular payments. If you keep your payments current, you can keep the property throughout the Chapter 7 process.
If you do not qualify for Chapter 7 bankruptcy, your bankruptcy attorney Riverside CA can still help you find relief from your debts using Chapter 13 bankruptcy. Chapter 13 allows you to consolidate your debts and create a payment plan, to bring your debt burden into line with your income. The payment plan will be approved and enforced by a bankruptcy judge.
If you have any questions about the types of debts you can discharge or the types of assets you can protect in a bankruptcy, just call a bankruptcy attorney.
