Gather Some Basic Information Before Seeing an Advisor
When the pressure of dealing with debt is too much to handle alone, it would be wise to seek competent advice from a trusted advisor. But the advice you will receive is only as good as the information you provide. The basic information needed can be categorized as follows:
Debt: You will need to have a complete list of all your creditors. This is everyone you owe money to. This includes your mortgage lender, credit card companies, student loan lenders, medical bills, and even relatives and friends, who might have lent you money. Do not exclude anyone from this list, even if you intend to repay them. It is also helpful to know when you incurred the debt. In the case of loans, that is the date you took the loan. In the case of credit cards, it might be a range of time when purchases where made. It is important to know also when you made the last purchase on any credit card and for what amount and purpose. A small purchase for a necessity, such as gasoline, would not make much difference, but a $5,000 cash advance just two weeks ago may affect how you can deal with that particular creditor’s claim today.
Income: To determine how much, if any, of the outstanding debt can be paid, it is crucial to know your income. For purposes of dealing with creditors, income is “any monies received” from any source. It is not the same definition as “taxable income” for income tax purposes. Thus, “income” can include wages, business income, unemployment income, disability income, interest income, rental income, gift money, gambling winnings, distributions from retirement accounts, etc.
Assets: If creditors do not get paid, they will resort to collection actions. This could include taking your property. If the creditor is secured, such as a mortgage lender or car loan lender, they can take the property that secures the debt — your house or your car. In the case of an unsecured creditor, it could lead to a money judgment against you and eventually seizure of your assets. To protect the assets you have from creditors’ claims, it is imperative that you know the current value of your assets. California provides for certain exemptions to protect assets from creditors’ claims, but most exemptions have a set limit based on the value of the asset. If you do not know what the value of your assets are, then we cannot know if it is fully protected from creditors’ claims if you default on your credit obligations.
For a free initial consultation regarding these and other related issues including personal and business bankruptcy, please contact attorney Susana B. Tolchard at 661-287-9986 for a free initial consultation.