Don’t feel guilty about filing for bankruptcy.

When forced into dealing with overdue bills and financial problems, many of us bury our head in the sand, stop opening bills and feel anxiety and guilt about the situation that we are in.
Don’t allow those feelings to stop you from finding out your options and your rights before its too late. There are many things that you can do during hard times that sound like the right thing to do but actually could backfire as far as your rights under the bankruptcy code go.

I have seen people take huge distributions from their IRA’s and try to survive when in the long run they end up in my office either way. An IRA is 100% protected in bankruptcy and should not be taken out before hand as it can lose its protection and therefore becomes nonexempt property just from your distrubtion.
I have seen people take on extra jobs, work dubious overtime hours only to put themselves in a position where they cannot do a chapter 7 and are forced into a Chapter 13 and will therefore have to keep working overtime and harder for 5 years to pay off a chapter 13 plan when had they spoke with me 3 months in advance we could have discharded their debt in a chapter 7 in a 3 month process.

If you are someone that wants to pay your creditors back and feel a moral obligation to do so, nothing is stop you from paying them back after filing. Its just going to be on a voluntary basis and won’t be through a wage garnishment, a lien on your house, and the continuing harrassment that you are likely facing at this juncture.

Seeking the input from a qualified attorney is something you should do before things get too bad so that you understand your options and we can do some pre-bankruptcy planning to get the best result for you. Remember. IT’S NOT YOUR FAULT.
I understand this more than anyone as I have seen a wide variety of cases and know that its not deadbeats that file for bankruptcy. If you weren’t managing your money well and doing the right things you would have never got enough credit in the first place to put yourself in over your head currently. The majority of cases that I see are from job loss, medical bills, divorce, failed business, the drastic changing of interest rates. These are not things that you controlled. Do not let shame or guilt get in the way of you moving forward. The bankruptcy laws exist for people like you and you can become productive and move past this point in your life. Business often come back stronger through bankruptcy and it’s the same for people. Once you can stop worring about the past you can move forward quicker to a brighter future. The bankruptcy laws are written for both debtors and creditors. They are there for a reason. Its important to be responsible for your debts but filing bankruptcy can also be the responsible thing to do as well. Collectors spend a lot of money going after people they will probably never get it from.

Bankruptcy allows you to move forward and the credit card companies to cut their losses.

Frequently Asked Questions: Debt Consolidation in California
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.

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