When Bankruptcy Is The BEST Option

When no other means of debt relief are available, filing for bankruptcy may be the only way to get out of debt for most people. The good news is that the old stigma associated with filing bankruptcy no longer really exists and most people who file bankruptcy usually rebuild credit very successfully in only a few years. Of course, this doesn’t mean that you should take the decision to file lightly. Filing bankruptcy is still a very serious decision and is one that must be made with the expert assistance of a knowledgeable and experienced attorney.
There are 2 basic types of bankruptcy for individuals. Chapter 7 allows you discharge all unsecured debts that you can no longer afford to pay with the exception of certain types of debts such as student loans, most taxes and child support. Legally, the bankruptcy trustee can take and sell “non-exempt” assets to produce cash and pay creditors. FACT: In most cases, all of the debtor’s assets are protected by the bankruptcy exemption laws so there is really nothing for the trustee to take. For example, in almost 100% of the cases that my office handles, the client keeps everything and loses nothing.
Chapter 13, on the other hand, allows you to consolidate all debts into one affordable monthly payment and pay back creditors, partially or fully, over a 3 to 5 year period. You only pay what you can afford, not what creditors demand. For homeowners in foreclosure, filing a Chapter 13 can also be an effective strategy in saving their home. All types of debts can be included in Chapter 13 such as credit cards, personal loans, medical bills, student loans, taxes, back property taxes, IRS taxes, etc.
Whichever “chapter” you file, upon filing your petition, creditors are automatically prohibited from pursuing or continuing any legal action against you or your property. Thus, collection calls, lawsuits, wage garnishments, repossessions and foreclosure are stopped immediately. If you are struggling with debt problems and don’t know what to do, it is in your best interest to consult with a competent bankruptcy attorney to find out whether bankruptcy is advisable for your situation.
(Ray J. Bulaon is a debt and tax resolution attorney in Valencia who has helped more than 5,000 clients. For a free confidential consultation, call his Valencia office at 866-477-7772)