Sacramento Bankruptcy: Coping with Debt

Debt can be dealt with in many ways. Bankruptcy is an option, but is likely not a first alternative. Read the Federal Trade Commissions thoughts on coping with debt. Though initial options to resolve your debt, such as consolidation and refinancing, may eliminate your debt problem, creating more debt to solve a debt dilemma can be a risky proposition. Borrowing more may only make the problem worse.

Bankruptcy is about what to do when what you have done before doesn’t work. Even if a last option, bankruptcy offers a safety net of last resort to resolve your debt crisis.

Rarely do you have to surrender your property when you file for bankruptcy. Exemption laws allow you to protect a certain amount of property you have. The vast majority of time this means all the property you have. Bankruptcy is an option available to you.

Sacramento Bankruptcy: Being sued? Bankruptcy will stop that lawsuit

Bankruptcy prevents creditors from coming after you. That includes stopping lawsuits, letters, levies, liens, garnishments, phone calls, or anything creditors attempt to pursue a debt owed. As soon as a bankruptcy is filed, bankruptcy protection (also known as an automatic stay in legalese) applies. Often people file bankruptcy because a creditor has sued them which, then, can result in a lien, levy, garnishment or other collection option. Even the rapper 50 Cent filed for bankruptcy to stop his creditors in their tracks. Bankruptcy is a powerful tool and may assist you if you have debt and are facing collection force.

Sacramento Bankruptcy: how to start the bankruptcy process

Filing bankruptcy in Sacramento, or anywhere, is a process. Preparation, strategy and timing are often key elements in processing a bankruptcy filing. How, then, to begin?

For starters, find whether bankruptcy is your best option. Often when you owe more in debt than income you earn (for math lovers: debt>income), bankruptcy is a good bet. Evaluating your debt relief options is best initiated by consulting with a professional who can advise you.

If bankruptcy is a good fit, deciding on what type of bankruptcy to file is next. Typically individual consumers and couples file either a Chapter 7 bankruptcy or Chapter 13 bankruptcy. In a Chapter 7 bankruptcy you usually do not pay anything back to your creditors; in a Chapter 13 bankruptcy you do.

Once you decide your bankruptcy direction, plotting though the paperwork to process your bankruptcy is normally next. Your income, debt, types of debt, expenses and bankruptcy goals are all thrown into the mix in preparation of your case.

Signing your petition and accompanying paperwork is the last step before your bankruptcy case can be filed. This, understandably, is an overview of the overall process of beginning a bankruptcy filing. But it is a guide of the basic steps involved in filing for bankruptcy.

Sacramento Bankruptcy: The Benefits of Bankruptcy

Filing bankruptcy can be a daunting decision. But often times it is worth it. Assessing whether a bankruptcy is worthwhile is essentially a cost-benefit evaluation. Is the cost of filing bankruptcy worth the benefit of eliminating your debt? Most consultations I do with potential clients confirms that bankruptcy is a better option than dealing with unaffordable debt. It is understandable that most bankruptcy clients who contact me benefit from bankruptcy since, after all, by the time I am called, their debt is beyond them in some way, shape or fashion.

Though bankruptcy is a negative on your credit, it is better than owing more debt than you can repay. If you are in this situation, bankruptcy can help. Don’t let the supposed stigma of bankruptcy which, often times, is perpetuated by the credit industry, deter you from benefitting from bankruptcy.

Credit is typically improved quickly after a bankruptcy. Although it remains on your credit report for years, eliminating your debt through a bankruptcy discharge immediately improves your credit position. Your debt-to-income ratio is restored, credit can easily be reestablished and your finances fixed with a bankruptcy. Countless clients have commented to me how well a bankruptcy works and that it was the smartest financial move they have made.

Restoring your financial balance is the point of a bankruptcy. It allows you to live your life free of the financial constraints of debt. Whether you are in need of restructuring your debt or eliminating it entirely, bankruptcy is a tool that can provide you a fresh financial start. Frequently, too, eliminating your debt can eliminate your angst, which often times can be as daunting–if not more–than the decision whether to file bankruptcy.

As detailed in an NPR story (podcast), bankruptcy can be a big benefit.