5 Valuable Facts about Bankruptcy

September 8, 2011 – Victims of the current economic recession, many West Coast residents are experiencing financial distress. They lost their job, had to take pay cuts, have trouble coping with expensive food and fuel prices, or are unable to pay high medical bills. There are many reasons why these individuals consider filing for bankruptcy in California.

When you are one of these men and women drowning in debt, think about hiring a capable bankruptcy attorney. A professional familiar with this branch of the law can help you with the necessary paperwork, propose alternative solutions, and offer valuable guidance. Your lawyer will also inform you about facts, such as:

1. Bankruptcy is not the best solution for everyone. In many cases, debt consolidation, a mortgage refinance, financial counseling, or selling precious assets can prevent damages to your credit score.
2. There are different types of bankruptcy. A dedicated lawyer will review your case and make appropriate suggestions. Ask your legal representative to explain the differences between e.g. Chapter 7, Chapter 11 and Chapter 13 bankruptcy. It will make your decision a lot easier.
3. Filing for bankruptcy protection has its pros and cons.
Pros: – Stops the repossession of vehicles and furniture
- It prevents home foreclosure
- Utilities will not be cut off
- High medical bills can be reduced or discharged
- Creditors will stop harassing you
- Forgiveness of credit card debt
- It gives you a chance for a new start
Cons: - Student loans remain
- Inability to apply for loans for several years
- You still have to pay alimony and child support
- Certain taxes will not be discharged
- You will have to rebuild your credit score
4. While it is not recommended, a person can file for bankruptcy in California again after a specified waiting period has been completed.
5. During financial hardship, only one individual in a partnership has to file for bankruptcy. The credibility of the other partner will remain intact.

 

 

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