I moved from California two years ago and have had a difficult time keeping up with my credit cards. I now have most in collections for around 8-10 thousand dollars. I have one card company that is looking into a lein with my payroll. My financial situation will not be changing and I find it impossible to jsut keep up with every day bills. Is bankruptcy something that I should consider and how do you start the process?
2 Answers from Attorneys
From what you describe, yes bankruptcy is an option your should explore. You will end up getting wages and bank accounts garnished if you do not look into it soon and that just makes everything worse if you are not seeing any increases in income soon. You need to talk to a bankruptcy attorney who can help you figure out if Chapter 13 or Chapter 7 is best for your particular situation. They need to look at income, household size, and what assets you have in making their recommendation.
Greg is correct. You need to have a consultation with an experienced bankruptcy attorney to consider your situation in more detail. Many bankruptcy attorneys offer a free initial consultation (usually limited to 30 minutes or so). The attorney, with your help, can get an idea of the problems you face and consider the various options that may be available to you.
One thing you need to keep in mind: where will you be when the process is over? If I file a bankruptcy case for a client, his debts are discharged, and six months later he has accumulated new debts, I have not done much to help him. You should consider both the long term and the short term when mapping out a plan of action.
Be sure to get your financial information (debts, assets, income, expenses, etc.) in some sort of order, so the attorney can review things quickly and easily. Much of the information that is required in a bankruptcy filing is based on monthly income and expenses. Having a good handle on that information will make your consultation more valuable. You may want to review your checking account entries for several months to see where your money is going. You will also need (eventually - not absolutly necessary for the first meeting) your paystubs for the last six-plus months, say everything since the first of February.
You can find experienced local bankruptcy attorneys by using the attorney locater service at the National Association of Consumer Bankruptcy Attorneys website - www.nacba.org. There is also some information on bankruptcy at my website: www.myfederallawyer.com.
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