Are you wondering where the money is going to come from to pay your bills this month? Sometimes it can seem like collection agencies are calling non-stop.
There is a way to stop the collection calls and get out of financial trouble. The solution could be bankruptcy.
Speaking with a law firm that specializes in bankruptcy situations is the key to understanding if it is the right course of action for you. In Southern California Olympia Law PC has three offices that specialize in Bankruptcy Law.
Signs you should consider bankruptcy
Bankruptcy is not the answer for everybody. Being prepared and understanding your situation will make your consultation with your law firm most efficient. Here are some tips on understanding bankruptcy.
How much do you owe? Familiarize yourself with any debt including credit card balances, loans, unpaid accounts that you may have. Sit down with your collection notices and add it all up.
Can you afford to make more than the minimum monthly payment on your bills? If you are making only the minimum payments because you can’t afford to pay more, that’s an indicator that your debt could be out of control.
Things to consider before filing for bankruptcy
Filing for bankruptcy is a big decision with long-term repercussions. If you file, make sure it is for the right reasons.
Can your biggest debts be forgiven by bankruptcy? While many kinds of debt can be erased by filing bankruptcy, some are not eligible. Some debts will follow you into bankruptcy including:
• Child support payments
• Spousal support payments
• Student loan debt
• Tax payments
Chapter 7 and Chapter 13 Bankruptcy Laws
Once it is been decided that bankruptcy is the right solution for your financial situation, you need to decide which type of bankruptcy is optimal. When speaking with Olympia Law PC, they can help you understand which option is best for you. Their experienced bankruptcy attorneys represent debtors in all bankruptcy filings and adversary proceedings.
If you are an individual or a small business owner, then your most common options are either Chapter 7 “liquidation” bankruptcy or Chapter 13 “wage earners” or “reorganization” bankruptcy.
Loss of income combined with a significant amount of debt is the number one reason people file for bankruptcy. A typical scenario is one where the debtor has no income except possibly unemployment benefits, does not own their home, and has a vehicle with a loan against it.
In situations like this, a Chapter 7 bankruptcy is the most efficient way to getting rid of the outstanding debt. In fact, this is the most common type of bankruptcy case and is often called a “no asset” bankruptcy.
For homeowners who are behind on mortgage payments, Chapter 13 offers a way to catch up on past due payments while at the same time eliminating some of their debt. This means they are saved from foreclosure proceedings and get rid of things like credit card debt, and medical bills.