It has now been several years since the recession, but like many Californians, you are still feeling the pinch in your pocketbook. You may have a steady job and appear to be doing fine to everyone else, but secretly you are struggling to make ends meet from month to month. It is understandable that your emotions are running the gamut from embarrassment to helplessness. Can a personal bankruptcy be the end of your troubles? How do you know when it is time to file for bankruptcy?
First, it can help to understand how the main types of personal bankruptcy may help you. Chapter 7 bankruptcy discharges most or all of your debt, but you may lose assets to repay a portion of your debt to creditors, including your home and recreational vehicles. A Chapter 13 bankruptcy usually allows you to avoid foreclosure and keep your assets while you repay your debt over a period of three to five years.
It may be easier than you think to know when you are in over your head and need help. The following signs may indicate you are ready to consider bankruptcy:
- Creditors and collection agencies are sending letters or calling all the time demanding payment and threatening legal action.
- You are unable to pay all your bills each month and fear your utilities are about to get shut off.
- Your creditors are garnishing your wages or have taken steps for it to happen.
You may have suspected for some time that bankruptcy might be a good option for you, but you have held back because of fear or shame. You may feel reassured that there is no longer such a stigma about filing for bankruptcy, and you can begin rebuilding your credit soon after your discharge. In fact, waiting until your situation is dire may be even harder on your credit. Educating yourself on your options might remove some of the weight from your shoulders.