Questions to Consider before Filing for Bankruptcy
While bankruptcy allows serious debtors a chance to wipe the slate clean, it should not be approached lightly. Filing for Chapter 13 or Chapter 7 is a lengthy process, which requires a lot of paperwork.
When preparing to meet with a bankruptcy lawyers, consider some simple questions:
- Are my debts high enough? If you have $15,000 or less worth of debt, it might not be worth filing for bankruptcy. Only consider such a drastic option in extreme circumstances.
- Are my debts too high? In some cases, the filer’s debts are too high for Chapter 7 or Chapter 13. In these instances, Chapter 11 may be an option.
- What is my income? If your income is higher than your state’s median, you may not be eligible for Chapter 7 liquidation.
- What is the average income in California? If your income is above the median Californian income, you might not be eligible for Chapter 7.
- Do I own a home? If you are facing foreclosure, Chapter 13 is probably your best option. Also, the value of your home and the amount of equity you have greatly influence whether you should file for Chapter 7 or Chapter 13.
- Have I had pre-bankruptcy counseling? An approved credit counseling organization can help you evaluate your personal financial situation. You must have credit counseling within 180 days of filing for bankruptcy.
- Have I been using my credit cards? To avoid the appearance of fraud, do not use your credit cards during the period before filing. Some con artists charge high balances on credit cards in a short period and then file for bankruptcy to avoid payment.
If you are still confused about whether bankruptcy is the right option for you, contact an Orange County, CA bankruptcy attorney. In many cases, bankruptcy is the only way to eliminate or reduce debts.
Bankruptcy in Orange County, CA is becoming more and more common. However, there is help for those in need. Talk to a bankruptcy lawyer today to find out more regarding your financial options.