Helpful advice to help you decide if bankruptcy is right for you
As the New Year begins, many people are taking stock of their current situation and trying to make New Year’s resolutions that will help them achieve their goals. If your debt burden is holding you back from pursuing your dreams or even just living a normal, stress-free life, you may want to consider filing for bankruptcy in 2016.
Bankruptcy can be an excellent way to give yourself a fresh start for a brighter financial future. However, you need to make the decision of when to file and which type of bankruptcy to file carefully. Here are some things to consider as you make your decision.
What Debts Are You Most Worried About?
Bankruptcy is effective on most—but not all—types of debts. So, naturally, before you file you will want to consider whether you can actually find relief from your debt with a particular type of bankruptcy.
If you are primarily burdened by credit card debt, medical debt, or other types of unsecured debt, Chapter 7 provides an excellent option for completely eliminating the debts. However, Chapter 7 is means-tested, meaning those with a large income or lots of assets cannot use it.
If you are more worried about secured debts such as your mortgage or car payment, Chapter 13 can help. Chapter 13 can bundle these payments together with any unsecured debts you may have, allowing you to make one single payment per month as part of a 3 to 5 year court-approved repayment program. At the end of the program you will have the rest of your unsecured debts cleared and still get to keep your property like your house or car.
Unfortunately, if you are worried about student loan debt, back alimony or child support, or back taxes less than 3 years old, bankruptcy is not going to help except in the most extreme and unusual cases.
Are You Under Pressure from Bill Collectors?
If any of your debts have already been sold to debt collection companies, you are probably being harassed about them almost daily. If you have any income to spare, you should consider working out a repayment plan with the debt collector. But if your debts are overwhelming, you should consider filing for bankruptcy. As soon as you hire a bankruptcy attorney, the debt collectors will have to stop contacting you and instead go through your attorney.
Call California Bankruptcy Relief for Help
If you would like more information about how bankruptcy could help in your specific case, contact California Bankruptcy Relief at 951-755-1000 for a free consultation.
