Many people view a bankruptcy as their very last resort.
Our Los Angeles bankruptcy lawyers know that while it’s based in logic‚ the conclusion is flawed.
Sure‚ you don’t want everyone going out and filing for bankruptcy protection to purge themselves of debt they can actually afford – stiffing creditors in the process and causing an economic catastrophe. But the fact is‚ bankruptcy laws – particularly those passed in 2005 – were designed to prevent exactly that. So if you qualify for a bankruptcy‚ particularly a Chapter 7‚ chances are you should take it.
Some harp on the fact that it will damage your credit. But here’s the truth: If you qualify for a Chapter 7 bankruptcy‚ your credit is likely already shot‚ or barreling in that direction. Bankruptcy allows you to put a halt to the slide. You can hang onto your retirement and other savings and make a fresh start.
One of the biggest problems we see from new clients is that they waited too long‚ and endured unnecessary misery‚ before reaching out for help. They either didn’t want to face it or they waited to make bankruptcy the absolute last resort – and it cost them. They ended up walking away with far less than they might have had they filed sooner.
In that vein‚ we think it’s important to offer some tips on how to recognize that you are probably in trouble. Ask yourself these questions:
- Am I paying late fees or having difficulty juggling bills? If you’re finding yourself with an increasing inability to pay on time‚ this is a clear indicator that you are already in trouble.
- Am I banking on a windfall? For some people‚ it’s an inheritance or a home value increase or a large tax refund. Windfalls can be great – but you can’t put all your eggs in one basket – especially when it’s not a sure thing – because that’s a great way to find yourself up to your eyeballs in debt.
- Can I pay the minimum on my credit cards? Paying the minimum is likely going to cost you thousands or tens of thousands of dollars in the long-run – the VERY long run. For most people‚ paying the minimum would mean they would be paying for years if not decades. This is a key sign that your debt is too high.
- Am I fighting with my partner over money? Not once in a while (that’s typical)‚ but all the time? A heavy financial burden is inevitably going to burden your close relationships as well. Plus‚ you probably both have trouble sleeping because you’re so worried‚ which tends to make matters worse.
- Do I have the ability to save? If you can’t even set aside a small amount of money for savings‚ you are not in a good place. Everyone may have this kind of dilemma occasionally‚ but if you find yourself there on a regular basis‚ you may need to consider taking real action.
- Am I regularly shelling out cash to cover overdraft fees? If you are constantly overdrawing your account‚ it’s time for a serious sit-down regarding your next step.
If you are contemplating Chapter 7 bankruptcy in Los Angeles‚ contact Cal West Law‚ APLC at (818) 446-1334.
8 signs you’re flirting with financial ruin‚ Jan. 2013‚ By Claes Bell‚ Bankrate.com