DECIDING if bankruptcy is right for you is not always easy. But sometimes, the hole you’ve dug up is too deep that there is no other way out. Bill collectors are harassing you. Maybe they’re already threatening to take you to court, garnish your wages and take everything you’ve got. Maybe you can’t even sleep at night asking yourself: "What should I do to solve my debt problems and protect myself and my family?" If you are in this situation at the moment, you’d like to know if bankruptcy is the answer, don’t you?
The answer, of course, doesn’t always come quick and easy. Most people will postpone making a decision until they have their back into a corner and they feel like the walls are caving in. If you are in debt, I know how you feel. At what point does it make sense to file bankruptcy and get legal protection? If your financial situation is causing you a lot of stress and worries, perhaps bankruptcy is what you need for your mental well-being. Maybe you’re already doing your best but it’s simply not good enough and you’re now at the end of your financial rope.
Filing bankruptcy immediately stops collection actions against you and your property. That means no more collection calls, lawsuits, wage garnishments and no more sheriffs at your door. For the first time after a long while, you can finally breathe better and feel like a human being again. In Chapter 7, credit card debts, personal loans, medical bills and other unsecured debts are erased completely. Although in Chapter 7 non-exempt property can be taken to pay creditors, this is very rare because most Chapter 7 cases are no-asset cases. If your case is such, you lose nothing but your debts and you get to keep your home, automobile, bank accounts, retirement plans, etc.
In Chapter 13, you agree to repay all or a portion of your debts over 3 to 5 years. In most cases, you can cut your current credit card payments in half or even more, depending on your income and expenses. So, rather than struggling to pay your debts and the ridiculous interest rates that the credit card companies are charging you, you can be out of debt in a much shorter period of time while paying zero percent interest on your credit cards. Did you know that most people will never get out of debt with the 22-29% interest that they are paying on their credit cards? And after you’ve paid your debts, most likely you’ve paid your creditors more than twice your debt amounts in interest alone. Could this be the reason why a lot people retire broke? Instead of saving the money for their retirement, they waste it on the interest charges they are paying creditors every month. How much have you saved for your retirement at this time. Most people have nothing saved. Instead of saving, they’re actually borrowing against their 401K plan at work just to pay debts.
If you are facing possible loss of your home through foreclosure, perhaps you need to find out what your legal options are under Chapter 13. If you have a second mortgage not supported with equity, you may be able to do a "lien strip" and have your second mortgage cancelled. This is often a better option than loan modification unless your lender is allowing a principal reduction. If your first mortgage is also under a loan modification, find out now if Chapter 13 is an option should your loan modification be denied. Don’t make the same mistake that a lot of people make (i.e., relying on getting a loan modification approved, only to be told by their lender the last minute that they are denied. In those situations, it may be too late to stop foreclosure.)
For a free consultation, call my office at Toll-Free 1-866-477-7772 so we can carefully evaluate your case.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.
( Published September 8, 2010 in Asian Journal Los Angeles p. B2 )
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