Most people who file for bankruptcy have been struggling with debt for a long time. Some have been holding out hope that things will get better with the next tax refund or an upcoming raise. Others have tried alternatives like debt settlement , taking equity out of their homes or draining retirement accounts, often ending up worse off than they started. Others have been discouraged by various myths about bankruptcy, and delay finding out whether it might be the right solution.
Here are 7 signs that it may be time to speak with a Los Angeles bankruptcy lawyer. Some are urgent situations that require immediate action, while others may be more subtle.
Talk to a Los Angeles Bankruptcy Lawyer If…
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You are facing foreclosure, vehicle repossession, or the loss of other property that serves as security for a loan. In most bankruptcy cases, an automatic stay is entered right away–that means an instant stop to repossession, foreclosure, and other collection actions. In some cases, filing bankruptcy may even allow you to get a car back after repossession. Don’t wait for that to happen, though. Talk to a bankruptcy lawyer as soon as you know your home or vehicle is at risk.
Whether bankruptcy is a long-term solution to those problems depends on your circumstances, your goals and the type of bankruptcy you file. Your bankruptcy lawyer can explain the differences between Chapter 7 and Chapter 13 bankruptcy and help determine the right solution for you.
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Your wages are being garnished. Whether your wages are already being garnished or you’ve received notice of an upcoming garnishment, the automatic stay in bankruptcy may put an immediate stop to the garnishment. In some cases, bankruptcy filers whose wages have been garnished get some of that money back.
If the debt wages are being garnished for is dischargeable in bankruptcy, it can usually be eliminated while the automatic stay is still in effect, meaning the creditor never gets to take any more money out of the bankruptcy filer’s paycheck.
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The amount you owe never seems to get smaller. For many people who are struggling with debt, interest and late payment fees keep balances from declining. In some cases, balances keep growing, because the late fees and interest exceed the minimum payment. If you pay $100/month toward your credit card bill for three years and your balance only goes down by $300, you’ve thrown away $3,300.
That kind of cycle can keep you trapped in debt forever. Chapter 7 bankruptcy allows many people to wipe out unsecured debts like credit card debt, freeing up those funds to work toward the things that matter most.
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Creditors and debt collectors are making your life miserable. Financial stress can touch every area of your life, from your performance at work to your relationships at home. That stress can interfere with sleep and has been tied to higher rates of high blood pressure, heart disease, diabetes, anxiety and other health conditions. Even if you don’t recognize it in the moment, financial stress could literally be making you sick.
Eliminating that stress could improve areas of your life you never realized were being impacted by debt.
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Your income is consistently less than your living expenses plus debt payments. Of course, the first step when you realize you aren’t making enough money to cover your expenses is to look for ways to change that. Perhaps you can cut back on some expenses, or pick up a part-time job for a few months to pay down debt.
When that’s not possible and the problem is ongoing, it may be time to consider whether getting out from under unsecured debt like medical bills and credit card debt would allow you to stop juggling and cover your living expenses moving forward.
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Late payments and high balances are tanking your credit. Many people are reluctant to consider bankruptcy because they’ve heard it will ruin their credit. Of course, bankruptcy is a negative mark on your credit report. But if you’re struggling enough to consider bankruptcy, chances are you already have quite a few negative entries on that report or your high debt to income ratios are impacting your credit score.
Bankruptcy can provide an opportunity to put an end to the string of late payments and start rebuilding your credit. Some people see an increase in their credit scores right away, and one large study showed that more than half of bankruptcy filers had credit scores of 640 or higher after just one year.
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You’re skipping important purchases due to debt. Holding off on a vacation or buying a bigger house to pay down debt is responsible. Unfortunately, for many people that goes to extremes. If you’re skipping medical care or medications, skimping on groceries, or otherwise cutting key areas of your budget that don’t have room to cut, it’s time to consider other solutions.
Borowitz & Clark offers free consultations, so you have nothing to lose by educating yourself about your options.
The best way to find out whether bankruptcy is the right answer for you is to consult an experienced Los Angeles bankruptcy attorney. Putting off finding a solution is expensive. So, the sooner you get reliable advice, the better.
At Borowitz & Clark we have helped tens of thousands of Californians with debt solutions. We know how stressful juggling debt and dodging creditor calls can be, and how much relief bankruptcy has provided to many of our clients. We offer free consultation so people in and around Los Angeles have easy access to the information they need. To schedule yours, call 877-439-9717 or fill out our contact form.