The decision to file bankruptcy is rarely an easy one, but it is sometimes necessary to bring relief to hard-working people struggling with excessive debt. If you’re seriously behind in your bills or being hassled by creditors, you may be wondering if bankruptcy is the right option for you. While there is no single answer or formula for determining when to file bankruptcy, there are a few factors that can help you understand which options are best.
Understanding what is possible through a California bankruptcy, and what is not, is an important first step in deciding if bankruptcy is right for you. For most people, a Chapter 7 Bankruptcy can eliminate some or all of your debts (known as “discharge” of debt), and end wage garnishment and debt collection.
However, bankruptcy cannot eliminate all debts. In most cases, spousal support, child support, student loans, taxes, and criminal fines are not eligible to be discharged through bankruptcy. It is also important to note that in California, a Chapter 7 Bankruptcy will not necessarily stop foreclosure if you owe arrears on your home.
The best method for determining if bankruptcy is right for you is to consult with an experienced California bankruptcy attorney, who can look at the specifics of your situation and offer detailed advice. However, there are few signs that may indicate that it’s time to ask for help.
Large debt alone isn’t enough to qualify you for bankruptcy or make it a good idea, especially if you’re still current on most of your payments. But if you’ve fallen several months behind, and it seems increasingly unlikely that you’ll be able to catch up, bankruptcy could help.
If you’re taking money out of your retirement accounts to pay your bills or debts, you could be doing yourself or your family a great disservice. Retirement accounts are normally exempt in a Chapter 7 bankruptcy, meaning you will be able to keep these assets while still eliminating much or all of your debt once your bankruptcy is filed.
Consider how your debts are currently impacting your family, and what may happen to them if an unexpected expense like a medical bill were to occur. Now consider how a fresh financial start could benefit those who depend on you. For example, while Chapter 7 Bankruptcy cannot eliminate your mortgage, it may discharge enough debt to allow you to catch up on your mortgage and prevent foreclosure.
It’s understandable that most of us feel an obligation to repay what we owe, and as a result many people are hesitant to file bankruptcy. But the truth is waiting too long to seek help can cause greater harm and result in losing time and money that could be spent rebuilding your financial future rather than chasing unpayable debts.
If any of the situations described above sound familiar to you, then it may be time to consider a Chapter 7 Bankruptcy. The debt relief lawyers at Miranda, Magden and Miranda, LLP, have helped many Monterey County families get relief from their financial burdens, and we may be able to help you too. To request a consultation, call our office today, or simply fill out our online contact form, and we’ll be in touch with you soon.
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