Do I Need To File Bankruptcy?
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Elizabeth Torres, Esq.
2160 N. Durfee Avenue
El Monte, CA 91733
(888) 335 1001 info@torreslawgroup.com
Elizabeth Torres and her partners at Torres Law Group represent a professional law team in Southern California with over 15 years of experience that provides you with a free initial consultation with an experienced competent California bankruptcy attorney.
Bankruptcy is a process in which a person in debt may obtain a court-ordered relief from their debts and no longer be entitled to repayment. The purpose is to allow the debtor to have a fresh start and creditors are given an evenhanded distribution of any assets. However, the process is somewhat controversial as not everybody who faces severe financial difficulty should file for bankruptcy.
Personal bankruptcy is generally considered the last resort for a debt management option. This is mainly because the results are long lasting and very extensive. Many find themselves asking the question- should I declare bankruptcy.
There are many factors, which can effect a person’s decision to file for bankruptcy. It is important to discuss your situation to a credit counselor or bankruptcy attorney before making any decisions. They can help to evaluate benefits as well as detriments of filing for bankruptcy depending on your specific financial situation. Attending financial management courses may help you find ways to resolve some of your financial troubles.
Filing for bankruptcy is an important decision as it will stay on your credit report for up to ten years, making it difficult to acquire credit, buy a home, get life insurance, and sometimes even get a job. That is why it is crucial to balance every pro and con in terms of your situation. Bankruptcy can serve as a fresh start for people who cannot seem to satisfy their debts. However, bankruptcy does not eliminate all debts. Taxes, alimony, child support, and student loans are not discharged. Bankruptcy should only be considered when all other alternatives have failed.
The two types of personal bankruptcy include Chapter 13 and Chapter 7. Both types can rid you of unsecured debts as well as to stop foreclosures and repossessions. Chapter 7 is the most common and under this type allowing an individual to get discharged from their debt and keep assets in which there is no equity. This type of bankruptcy liquidates your assets, allowing you to pay off as much of your debt as possible. The cash from your assets is then distributed to creditors such as banks and credit card companies. For many people, Chapter 7 offers a quick, fresh start. However, for those who may own a company or a family home, it is not always the best option as almost all assets such as these are taken and sold to repay creditors.
For those who have property they want to keep, filing a Chapter 13 bankruptcy may be the better choice. Chapter 13 allows individuals who have a regular source of income to maintain ownership of their assets on the condition that they eventually repay creditors with their future earnings. The debtor is not fully discharged until repayment has been completed. This process can take three to five years.
In order to declare bankruptcy, there are two common procedures. The most common way is to voluntarily file for bankruptcy. The second way is for creditors to ask the court to order a person bankrupt. Consult first with a lawyer to decide which way to figure out the best fit for you circumstances
Numerous alternatives to bankruptcy include financial management as well as refinancing. Financial management utilizes a manager to pay your bills as well as put the debtor on an “allowance” until the finances are back in order. This alternative is often used but a downside is that it means giving up a lot of control over one’s own finances. The other alternative is refinancing your home, if one is owned, to pay off all high interest debt.
Visit www.TorresLawGroup.com to speak with a qualified California bankruptcy attorney.
