Posted by: California Bankruptcy Attorney in MyBlog on Mar 23, 2010
Many people fear bankruptcy because they fear the aftermath of bankruptcy. There is good reason to be concerned about the aftermath of bankruptcy; after all, there is no avoiding the fact that bankruptcy will damage your credit, and in some cases, bankruptcy may temporarily raise your monthly bills rather than reducing or removing them. These unexpected consequences of bankruptcy can leave some debtors in more dire financial straits than they were in before bankruptcy.
Having a California bankruptcy attorney by your side during bankruptcy increases the chance of your success in filing for bankruptcy.
Understanding What Type of Bankruptcy is Best for You
California residents facing bankruptcy should consult with a California bankruptcy attorney before taking any other step. In most cases, a bankruptcy attorney will offer you a free consultation in person or over the phone to help you get started. One of the first things a bankruptcy lawyer in California will help you figure out is which type of bankruptcy you qualify for and which type is best for your circumstances. In a Chapter 7 bankruptcy, your unsecured debts – such as credit card debts – will often be completely discharged. Your secured debts, such as your car loan or your mortgage, will not be discharged. In a Chapter 13 bankruptcy, your California bankruptcy lawyer will negotiate a reasonable payment plan with the courts based upon your income level. The success rate in filing bankruptcy, especially Chapter 13, is actually lower than you might think. Only about 33% of all Chapter 13 cases make it through the full duration of the payment plan. In the other two-thirds of Chapter 13 cases, people end up losing their homes, their cars, and other possessions. Therefore, it's vitally important to work closely with a good bankruptcy attorney in California if you wish for your Chapter 13 bankruptcy to give you the second chance you're looking for.
What it Takes to Succeed in Chapter 13
Bankruptcy code in the United States gives debtors five years to pay back their creditors under Chapter 13. During these five years, the debtor keeps all of their property, but they must stay on top of the court-approved, interest-free payment plan. This latter caveat is the part of Chapter 13 where many people fail. Either because their other debts are too great, or because of a lack of fiscal discipline, prolonged job loss, mounting medical bills, or other extenuating circumstances, many debtors fail to keep up with the payment plan. For this reason, many people prefer a Chapter 7 bankruptcy, which outrightly eliminates most unsecured debts. For many debtors, the discharge of certain debts is enough for them to get their heads above water financially, and meet their other commitments.
However, the advantage of a Chapter 13 bankruptcy is the full discharge of any remaining debts once the payment plan has been met. It is because of this advantage that many debtors decide they can take the risk of a Chapter 13 bankruptcy in order to succeed financially in the long run.
To reiterate, the best thing a debtor can do as a first step is to consult with a California bankruptcy attorney. An experienced bankruptcy attorney will be able to guide you towards the best bankruptcy choices for your individual situation, ensuring your future financial success.
Call (877) 427-2752 and consult with a bankruptcy lawyer in California about your case. Each case is different and requires a different strategy to succeed in filing for bankruptcy.