Is Bankruptcy Right for You?

People often have misconceptions about the bankruptcy process. Some view it as something shameful while others see it as a ticket to get out of debt with no consequences. Both views are wrong.

It is, at its heart, a financial decision. The process involves a legal proceeding that takes time and effort to accomplish. Thousands of people each year will use this process to resolve debt issues that they are unable to solve otherwise. Most people that file bankruptcy did not plan to use this method as a way to get out of paying credit card bills, but because they had something catastrophic happen.

Many people have been in trouble financially because of the recession. In many areas of the U.S., as well as California in general, people have had long term unemployment. While the nation is slowly getting back on track, many areas of California had as high as a 15% unemployment rate for extended periods of time. At the same time, single-family homes lost equity in most areas. People could not pay their bills, they could not find work, and they could not sell their homes. With many banks refusing to allow short sales or a deed in lieu or even allowing people to obtain a loan modification, many people have been at their wit’s end trying to decide what to do.

This has made many people seek out advice from our bankruptcy lawyers in Lancaster, CA and other offices. People may be afraid of getting a foreclosure on their credit report because they have heard that this is a long-term problem for getting credit in the future. People are often uncertain which path to take as to bankruptcy or foreclosure. Additionally, people may have credit card debt, a car loan, student loans, tax liens, medical bills or other debt that they cannot manage.

How effective a bankruptcy will be for each individual will depend on the type of debt that is owed. Our lawyers in Lancaster, CA , as well as our other offices, will give counsel on the types of debts that are dischargeable. Normally debts to the IRS, child support, spousal support, and criminal restitution cannot be wiped out by bankruptcy. There are also some other types of debt that fall into this category but in most cases, average consumer debt such as mortgages and credit card debt can be eliminated.

For people that have late balances, very high balances, accounts that have been charged-off, or many collection accounts, bankruptcy may be the best solution if the person cannot find a way to pay these debts. Using the bankruptcy process may be the new start that people need to get back on track.