Is Bankruptcy Right for You?
Considering bankruptcy? Call us now at 888-363-7901
Just the word ‘
bankruptcy’ may be sending shivers down your spine. Society has associated
bankruptcy with negative connotations and an idea of “losing it
all.” While this is a possibility, it is certainly not always the
case, especially when you are working with a lawyer to reduce your debt.
There are benefits to declaring bankruptcy and ways to protect your assets
with proper preparation. Retaining an experienced Orange County bankruptcy
attorney with knowledge of financial law can help you decide if filing
for bankruptcy is right for you.
How Bankruptcy Can Help
If there were no benefits for filing for bankruptcy, no one would ever
do it. Even though it can be frightful, and certainly stressful, there
are advantages to be had when you file for bankruptcy, including, but
not limited to:
Automatic stay: When you file for bankruptcy, an immediate and automatic stay is created
that strictly prohibits creditors from pursuing your owed debts.
Discharge: Under certain circumstances, some or all of your debts may be discharged
permanently. You will require a bankruptcy attorney to help ensure that
all debts eligible for discharge are considered.
Exemption: Usually based on an assessment in the form of a ‘bankruptcy means
test,’ certain pieces of your property may be considered exempt
from collection or seizure. Homes and automobiles required for day-to-day
life to continue are common assets listed under exemption.
Credit restoration: If debts are discharged or paid off in a timely manner, many people who
filed for bankruptcy actually see an increase in their credit score in
the following years, assuming no more financial troubles arise.
Downsides of a Bankruptcy
As with every reward, there is an opposing risk, and filing for bankruptcy
is no exception to the rule. If you file for bankruptcy, you may encounter
certain disadvantages or losses, such as:
Property seizures: Items of a certain value or greater that fail for exemption status may
be seized by debt collectors and creditors, including households and family
Credit card cancellation: It is very likely that your credit cards will be automatically cancelled
when you file for bankruptcy. This is not necessarily detrimental to your
credit score, however.
Denied refunds: State and federal tax refunds that would have been owed to you may be
denied upon filing for bankruptcy. In certain circumstances, denied taxes
can be partially or fully recollected during a later tax season.
Mortgages alterations: There may be alterations to your current mortgages – or you may
be denied new mortgage requests – when you are in the process of
filing for bankruptcy.
Filing for Bankruptcy is a Huge Financial Decision
Your future welfare can be in the balance as you decide to file for bankruptcy
or not. The benefits could be monumental, but the disadvantages are there.
Additionally, there could be other ways to resolve your debt that don’t
require bankruptcy. The point is that no one should have to make such
an important decision alone, and at 1
st California Law, Inc. our experienced team of bankruptcy lawyers are willing
and waiting to help you. Whether you want to file for
Chapter 13, or not to file at all, we can assist you in reaching that decision.
Free consultations are available online or over the phone – call 888.363.7901 to speak
to a helpful representative at our Orange County office today.