What are the essential pieces of my financial picture needed in order to decide whether I should deal with debt by filing for a Chapter 7 or Chapter 13 bankruptcy?

This is the most common first questions heard during the first interview of people seeking help from my bankruptcy practice in the Sacramento area.

Bankruptcy does offer an action plan to overcome overwhelming money problems – that’s my experience in working with people as their “agent for debt relief”

Bankruptcy is the plan, but first I have to ask a few questions – 12 to be exact:

On a MONTHLY basis, could you supply the following financial details about your everyday life?

1)    What are housing expenses? [go ahead and include utilities, you need them to run the house]

2)    What are transportation expenses? [car, gas, public transportation]

3)    What are food expenses? [just food, not toothpaste or napkins]

4)    What are debt expenses (balance, plus interest)

5)    How much added to credit cards [what are you buying on credit]

6)    How much saved or given to charity [it’s a non-material acquisition]

7)    How much spent on upkeep [clothes, home repair, home furnishings, other decoration/upkeep of person or environment -- you and your environment deserve to be lookin’ good]

8)    How much spent on entertainment [sports, golf, movies, night on town]

9)    How much spent on education [could be book purchase, internet training, memberships]

10) How much spent on health-related activities [gym memberships, supplements, special food]

11) How much spent on gifts or other contributions to family or friends [special occasions]

12) How much spent on whatever is classified as “miscellaneous” [could be technology, office supplies, cell phone, whatever is not 1-11]

Maybe you’d like to get a notebook or binder and use a page for each of the twelve categories?

It doesn’t have to be a perfectly accurate total.

How about just one more question: what’s your basic take-home monthly pay (cash) from your job or business venture?  [It’s easy when you have a job to tally the score – but your income minus expenses gives this income figure for a business venture.

Take a breather – you are very close to knowing where you stand right now as far as your finances.

Okay, got the income figure? Just jot it down here:

1)    Monthly income

2)    Add numbers 1-12 and put total here

3)    Subtract #2 from #1

TOTAL MONTHLY (plus or minus MONEY ________)

Done?  Congratulations, you’ve just overcome being overwhelmed by your money problems.  How can I call this a successful conclusion to your money problems when we haven’t even discussed how a Chapter 7 or Chapter 13 might be a perfect fix for your circumstances?

Impossible to Worry and Take Action at the Same Time

It’s a simple neurological fact of brain design – you can’t be stuck and worried about a situation at the same time you are facing the facts about it and making an inventory of options.  We are either avoiding or confronting facts.

Confronting facts may be difficult, even painful, but so is winning a title basketball game!  Ask any athlete how he/she became a winner . . . they’ll tell you the basic truth: “just stay in the game.”

To learn more about your options if your left over monthly income is in the MINUS category or barely breaking even contact us

The best way to protect assets during bankruptcy is to retain the services of a knowledgeable bankruptcy lawyer. Your attorney’s 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 office serving Florin at 916-313-9069 or via email at info@california-bankruptcyattorney.com