Sacramento Bankruptcy Attorney serving Antelope lists 10 points about bankruptcy you might want to know before filing either a Chapter 7 or Chapter 13 bankruptcy.

10 things about bankruptcy you might want to know

Education comes before execution – first you learn your options, then you choose a course of action, then you just do it.  Here are ten practical bits of information that may help clarify your choices:

1.     Wait to file.  It might be to your advantage to wait for filing bankruptcy, if you sold property or gave away property to a relative less than two years ago;  you may also want to wait to file bankruptcy if your income went down less than six months ago.

2.     Are you judgment proof? If you have almost no income, or assets, you might not need to file bankruptcy.  You are what’s called “judgment proof”, means that since you have no income or assets that a creditor could be awarded if he won a judgment against you, it’s unlikely that the creditor would spend the money to sue you.

3.     Not all debts go away. If most of your debts are student loans, or back child support, alimony, or back taxes, then filing for bankruptcy may not resolve much of these debts. Negotiating with creditors and credit counseling programs may be a better choice in this case.

4. Income may limit options.  If your income is higher than the median monthly income in your state, Chapter 7 bankruptcy may not be available to you, but Chapter 13 bankruptcy -reorganization  plan may be a good choice for you.

5.     Find out about exemptions allowed.  Bankruptcy will likely discharge your credit card debts and other unsecured loans; but being able to keep your house will depend on whether your home is underwater (for chapter 7 bankruptcy) and whether or not you file a chapter 13 bankruptcy.

6.     Foreclosure becomes less of problem.  Bankruptcy won’t wipe out your obligation to remain current on your mortgage payments, but discharging other debts may make saving your home from foreclosure easier to manage.

7.     Find out more about assets exemptions.  If you are considering  Chapter 7 bankruptcy to discharge unsecured debts, be aware that you may have to liquidate your equity in your home or car, depending on asset exemptions in your state’s bankruptcy laws.

8.     Use bankruptcy assistance with “clean hands.” If you acquired debt by fraudulent means, or made large purchases after you knew you intended to file bankruptcy, it is quite possible that your bankruptcy petition may be dismissed.  You may even face criminal charges.

9.     Know what income is yours, not creditors.  In most cases, social security, pensions plans, welfare, unemployment, and life insurance will not be liquidated to resolve your debts with your creditors.

10.  How you can protect co-signers from facing consequences.  You can protect a co-signer from being forced to pay the co-signed loan if you file Chapter 13 repayment plan.  If you file Chapter 7, your co-signers will have to pay, unless you re-affirm those specific debts and pay them.

The advice of an experienced bankruptcy attorney can help you determine your options and action plan in light of your income, assets, and the nature of your debts.  This analysis will enable you to complete a Chapter 7 or Chapter 13 bankruptcy, the first step in achieving the debt relief you need to pursue your financial goals.

Please contact our Sacramento bankruptcy law office at 916-313-9069 or via email at info@california-bankruptcyattorney.com