There are times when financial problems strike, leaving us with very few options like declaring bankruptcy. Although it can be devastating to come to this point, sometimes it might be your viable option at hand for finding debt relief from heavy debts that you cannot settle due to unemployment or loss of income source.
Federal bankruptcy laws provide hardworking and diligent people like you with a path of seeking debt relief to manage heavy debts for a fresh financial start. However, you must meet particular legal requirements for the bankruptcy option you decide to declare.
That is where we at Los Angeles Bankruptcy Attorney come in to aid you in filing your bankruptcy petition the right way, considering your specific financial situation for a quick fresh start. If you live in Stanton, our experienced and discreet attorneys can carefully review your financial situation and circumstances to ensure you are filing the right form of bankruptcy that will give you a solution to your financial problems.
Reasons Why You Should Consider Filing Bankruptcy When You Have Heavy Unpayable Debts
If other ways of solving financial problems like making a budget and attending credit counseling do not help you clear your heavy debts and live a comfortable life, declaring bankruptcy might provide you a way out. Here are the reasons you should consider filing bankruptcy when you have heavy debts that you cannot pay:
It Gives You a Fresh Start
Bankruptcy declaration is a powerful and handy tool that allows you to discharge some of your unsecured and secured debts and at the same time keep most of your assets. When you decide to go bankrupt, you will have a chance for a fresh start with your life, and you can immediately begin working towards your financial goals without the worry or burden of debts you cannot pay.
Your Credit Rating Will Improve
Contrary to what most people believe, bankruptcy can improve your credit rating because it is already low due to late payments. Each month that you fail to make those monthly credit card bills, your credit score remains low, and it can be challenging to improve it without declaring bankruptcy.
Your credit rating/score will immediately start improving when you file your bankruptcy case in court. If everything goes well and the court grants a debt discharge, you will be free from the negative impact of a low credit score and ready to reap the benefits of a high credit score.
You Will Have Freedom
When you have due debts, your creditors will not stop calling or threatening you to repay their money as soon as possible. These are the times you might even think of using your retirement money to clear these debts to have peace of mind. However, you have a choice of stopping every debt collection strategy from your creditors until you regain control of your finances.
You Can Keep Most of Your Properties/Assets
There is a common stereotype perception among many people that you will lose everything when you declare bankruptcy, which is untrue. Most people can retain their valuable assets like houses and cars after declaring bankruptcy as long as they choose the right chapter of bankruptcy.
You need the services of a reliable Stanton bankruptcy attorney when figuring out the right chapter of bankruptcy to declare to retain your valuable assets.
No One Needs to Know
Many individuals facing financial difficulties are afraid of declaring bankruptcy because they think their employer or landlord will find out, and they can lose their job or face eviction. However, this is untrue because you still have anonymity if you file bankruptcy unless you choose to tell someone.
No one can realize that you are bankrupt unless they do a public record search because bankruptcy appears on your credit record, which is very unlikely to happen. Apart from that, it will be illegal for an employer to discriminate against you because you have a bankruptcy on your record.
You Can Use Your Money on Other Priorities
Apart from repaying your due debts, you will also want to keep all your bills current and comfortably pay for your family's needs. However, you cannot do this without filing bankruptcy because your creditors will be on your neck to ensure you are making monthly payments to wipe off your debts.
You don't have to give out the only money you got to enrich these large banks which are already making huge profits. If your income is less than the bankruptcy's "means test," you can file a bankruptcy petition for a debt discharge and use your income for other personal priorities.
Your Current Situation Will Become Worse if You Don't File Bankruptcy
If you fail to pay your creditors or file bankruptcy, your current situation will continue worsening because your debt will continue growing as interests accumulate. Your creditors cannot understand what you are going through financially, and they will continue intensifying their debt collection efforts to recover their money in whichever way.
With time, they might even file a lawsuit against you if you don't declare bankruptcy ahead of time. If the court gives them a default judgment against you from the lawsuit, you might be at risk of losing your valuable property or assets to them. Therefore, it is wise to declare bankruptcy as soon as you can to keep them at bay during these difficult financial times.
What You Should Not Do Before Bankruptcy
When you are experiencing financial problems, you might make careless choices out of emotion and confusion to alleviate your creditors' debt collection pressure. If you think declaring bankruptcy is a suitable option to seek debt relief during these burdensome financial times, you should begin preparing everything you need ahead of time.
You should retain a reputable Stanton bankruptcy attorney who understands the bankruptcy process's ins and outs to ensure your petition meets the necessary bankruptcy requirements. It is wise to contact an attorney ahead of time because some decisions you might make will affect your bankruptcy declaration eligibility.
If going bankrupt is a viable option of seeking debt relief according to your financial situation, here is what you shouldn't do before you file your petition:
Don't Fail to File Your Income Tax Returns
If you aren't required to file tax returns by law, assuming you receive disability insurance, then you shouldn't worry about this bankruptcy requirement. However, if you have an obligation to file your income tax returns and haven’t done it for the past two years, you will be ineligible for this form of debt relief.
Your income tax returns are crucial when determining your past and current earnings and satisfying possible tax claims. Before you submit your bankruptcy papers, you must satisfy this requirement and ensure there isn’t any incorrect information on your petition that might disqualify you for this form of debt discharge.
Don't Move Your Assets
When preparing your bankruptcy papers, you should provide truthful information about all the assets or property you own. You might think of transferring, selling, or hiding your assets when declaring bankruptcy because you fear losing them to your creditors, but that is a wrong idea.
Moving your assets will make you ineligible for bankruptcy declaration, and you might even be subject to criminal penalties. When you file for Chapter 7 bankruptcy, you might even be able to keep the property you are afraid of losing. However, you must agree to liquidate your "non-exempt" assets or properties to settle your debts.
Don't Prepare Your Bankruptcy Petition Incorrectly or Carelessly
Please don't rush into filling your bankruptcy papers without verifying them to ensure they are correct because any erroneous or misleading information can affect your eligibility for this form of debt relief. If you fail to include particular creditors in your bankruptcy petition, the bankruptcy court will not discharge the debt you owe them.
Similarly, if you fail to provide some asset information when filing for Chapter 7 bankruptcy, a court-appointed trustee might find them and confiscate them. However, if you have an attorney by your side, you don't have to worry about providing incorrect or erroneous information on your petition.
Don't Drain Your Retirement Account to Clear Your Debts
One of the most common and unfortunate mistakes that most people make before declaring bankruptcy is using money in their retirement account to settle their debts. Before using your retirement money in this manner, you should consider speaking with a Stanton bankruptcy attorney.
It is easy to take control of your financial life when you're legally bankrupt and keep your retirement account intact. If you usually receive a regular income, you might be eligible for Chapter 13 or “reorganization” bankruptcy, which allows you to settle your overwhelming debts for three to five years through an approved repayment plan.
Don't Buy Expensive Items
Before you consider filing bankruptcy, it is wise to avoid going on a shopping spree to buy expensive items. Of course, you can continue purchasing your necessities like medication and groceries, but buying expensive jewelry or a big screen TV is a wrong financial move if you intend to file for bankruptcy.
Any luxury item you purchase before submitting a bankruptcy petition might make the judge think you are using the court's power to defraud your new creditors.
How to File Bankruptcy
The legal process of declaring bankruptcy is challenging, but it can reduce, eliminate or restructure your debts if everything goes well. Before you begin the bankruptcy declaration process, it is wise to seek legal counsel from an experienced and skilled Stanton bankruptcy specialist.
To start this legal process, you must file a petition with a federal bankruptcy court. Typically, a bankruptcy petition is a collection of documents that contains a list of your properties/assets, debts, liabilities, finances, and all other crucial information that the judge requires to make a judgment.
When you file for bankruptcy, the judge will review your petition to determine whether you are eligible for this form of debt relief or not. Any other necessary additional documents that you didn't include in your petition, you must hand them over to the court within not later than 14 days following your petition's filing.
If the judge grants your bankruptcy petition, he/she will assign the case to a trustee who holds a meeting of creditors, which is informally known as "a 341 meeting." You must show up for this meeting to discuss your debts and assets/properties with your assigned trustee.
Most of the trustee's questions during a meeting of creditors will involve "yes/no" answers, but it is wise to familiarize yourself with these questions before answering them. That is where your attorney comes in to ensure you are informed and familiar with the most probable questions the trustee may ask during a 341 meeting.
As you can see, it is vital to have an experienced Stanton bankruptcy by your side throughout the bankruptcy process until you receive a debt discharge. Before the court grants a debt discharge, you must complete a mandatory debtor education course.
Once you meet all of these requirements, the judge will determine whether to grant a debt discharge order or not. Suppose everything goes well and the court grants your bankruptcy petition. In that case, you will be free from the obligations to pay your pending debts. A bankruptcy debt discharge order serves as a protection measure against your creditors because it halts all their debt collection plans.
The right chapter or form of bankruptcy to declare to solve your financial problems depends on your unique financial situation and the type of debts you owe. There are significant differences between the available forms or chapters of bankruptcy filings, and failing to comply with the required legal rules can lead to severe consequences.
Talking with a knowledgeable Stanton bankruptcy attorney before commencing with this life-changing process of seeking debt relief can prevent these consequences from happening.
Find a Stanton Bankruptcy Attorney Near Me
Friendly and courteous attorneys at Los Angeles Bankruptcy Attorney are familiar with the bankruptcy process from experience with different clients facing different financial problems. We can assess and evaluate your financial situation and help you file a suitable bankruptcy option for your unique financial situation. We invite you to call us now at 424-285-5525 wherever you are in Stanton, California.
