ONE common misconception people have is that if they file bankruptcy, they will lose everything that they’ve worked hard for. For this reason, a lot of people continue to suffer needlessly in debt when the law provides a solution to their debt problems. Not good.
Don’t get me wrong. Bankruptcy is certainly not the answer to all debt problems. But after having represented more than 5,000 bankruptcy clients over the years, I have seen the benefits it provides to people who are no longer in a position to help themselves.
In bankruptcy, there are exemptions allowed by that can help you protect your assets. For example, if you own a home that you live in, state homestead exemption laws allow you to protect anywhere from $300,000-$600,000 (*These homestead amounts, which are MUCH HIGHER than allowed under current law are effective 1-1-21 as per CA Governor Newsom’s approval of a bill 2 months ago due to the pandemic). If the amount of your home equity falls within the allowable exemption amount, your house is not at risk in any way. Thus, even if you file for bankruptcy, you can keep your home as long as you are making your payments.
Most bankruptcy cases are considered “no asset cases”. That means that the debtor literally has nothing of value, or the assets are considered protected under the exemption laws. So, don’t ever believe it when creditors or other people tell you that filing bankruptcy means that you automatically have to lose your home, vehicles or other assets. Your bankruptcy lawyer should be able to do a thorough review of everything you own and advise you what is exempt and what is not. For example, in almost 100% of the cases my office handles, clients lose nothing and keep everything. Again, seek legal counsel to understand your legal rights so you can make an intelligent decision as to whether bankruptcy is advisable for your situation.
If you are filing for Chapter 13 to consolidate your debts, none of your assets are at risk of being taken. This is due to the fact that Chapter 13 is simply a repayment plan, not a case where assets are sold. In Chapter 13, you are committing your income to pay creditors the best you could over a 3-5 year period. Again, you are not forced to sell assets to pay your debts although it may be possible for you to sell assets voluntarily to pay off your plan earlier. I am trying to simplify here but the point is that in Chapter 13, you can keep everything you have, and you can pay creditors based only on what you can afford. This allows you to live within your means- by making your debt payments more affordable.
If you are in debt and are considering filing bankruptcy but are not sure if this is right for you, I can help you make the right decision by explaining to you how the process works. Just call my office at 866-477-7772 and ask for a free initial consultation. As this year comes to a close, make it a goal to be the last year you will remain in debt. It’s not too late to start over. Rebuild your finances and your life.
NOTE: Due to COVID-19 pandemic, I am offering free consultations BY PHONE to anyone who needs help in dealing with their debt problems.
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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 5,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call RJB Law Offices at TOLL FREE 1-866-477-7772.