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Should I File Bankruptcy?

If you have gotten to the point where you have overextended yourself and creditors are threatening lawsuits, wage garnishment, foreclosure or repossession, you may be considering bankruptcy. Even bankruptcy attorneys will tell you that bankruptcy ought to be your last option however in certain circumstances, bankruptcy may be the only workable solution to gain you a fresh start. Indeed, many people who end up filing Chapter 7 or Chapter 13 wish they would have filed earlier. The only way to know for sure is to speak with an attorney who can review your specific  financial situation and give you a professional opinion with all of your options. Meanwhile, you should research and ask yourself the following questions before you file.

Your Current Credit Rating

If you choose to go forward with bankruptcy, know that it will be on your record for 10 years. If you have a good credit score now, then this may not be an option, however your credit’s probably not all that great already. That is to say, if you’re considering bankruptcy, you probably have a lot of debt and have missed or at least been late making payments on so you may determine that the credit consequences associated with bankruptcy aren’t all that bad, in light of its many benefits.

Know Your Priorities

If you choose to file Chapter 7 bankruptcy, all of your non-exempt property (or your assets with value exceeding California’s allowed limits) are subject to sale by a trustee.  In some cases, you may not qualify for Chapter 7 bankruptcy.  Knowing what your priorities are and future goals are will help in determining whether or not filing bankruptcy is an ideal solution for you. As an example, list your priorities in order of importance, for instance:

1. Providing for your family

2. Getting out of Debt

3. Saving for Retirement

Consider Your Other Options

For many people, another option may be an attorney negotiated debt settlement. The debt settlement process involves having an attorney negotiate large reductions in your debt, to reach a settlement (or reduction) of the debt, allowing you to move on with your life.  All of this is done without filing bankruptcy. Our attorneys focus on providing debt settlement services for our clients offering a free consultation and debt analysis to see if you fit our program.

Know Where You Stand

Determining how much debt you have in relation to your current income will also help determine whether or not you will be able to pay off your debt in a reasonable amount of time. To give you some perspective, the Federal Reserve reports that the typical person filing bankruptcy owes more than one and a half times their annual income in short-term, high-interest debt.

You are not alone. At some point in our lives, financial problems happen to the best of us. The important thing is that you are doing something proactive about it now. We can evaluate your debt and whether you’re a good candidate for bankruptcy or debt settlement instead. If you are a candidate for bankruptcy, and you want to file bankruptcy, then we will connect you with a local bankruptcy attorney. But many people don’t qualify for bankruptcy or bankruptcy is not a good option for them for a variety of reasons and debt settlement is then a better choice.