File for bankruptcy while the economy is down don’t wait

October 5, 2010 | by Christopher Hewitt

Filing for bankruptcy is never an easy decision but if things are starting to get better for you economically but you are still mired in debt then there is no time like the present to get bankruptcy advice from a riverside county bankruptcy attorney. The type of bankruptcy you qualify for depends on your last six months of income and once things start getting better if getting out of previous debt is still a priority, its likely you’ll be in a five year plan and subject to a restricted budget. Chapter 13 offers many benefits but its nice to be able to make the decision to choose between a chapter 7 or chapter 13 and by waiting until your income goes back up, it might be a choice you won’t have.

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How does debt consolidation affect credit scores?

Initially, it might cause a slight dip due to credit inquiries. However, consistent payments can improve your credit score over time.

What is the difference between debt consolidation and debt settlement?

Debt consolidation involves taking a new loan to pay off debts, while debt settlement is negotiating to pay less than you owe. Settlement can negatively impact your credit score.

What are secured vs. unsecured debt consolidation loans?

Secured loans require collateral (like a house or car), usually with lower interest rates. Unsecured loans don't require collateral but typically have higher rates.

Is debt consolidation right for me?

It depends on your total debt, interest rates, credit score, and payment capability. It's suitable if you can pay off your debt within five years and secure a lower interest rate than your current debts.

Should I consider long-term financial planning?

Yes, debt consolidation should be part of a broader financial strategy including budgeting, cutting expenses, and building an emergency fund.

How do Chapter 7 and Chapter 13 bankruptcies in California differ?

Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows debt restructuring over a set period, usually three to five years.

Can my spouse's bank account be garnished for my debt?

Bankruptcy laws offer protections against such actions, but specifics depend on individual cases and state laws.

How can I learn more about my options?

Consulting a California bankruptcy attorney can provide clarity. Firms like The Law Offices of Christopher Hewitt offer free consultations to explore debt relief paths.