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February 2019 Archives

Common questions you may have about the bankruptcy process

When you are no longer able to manage your debt and creditors are calling you at all hours about repayment, you may consider the benefits of bankruptcy. This is a process by which you can deal with certain types of debt once and for all, but you may be unsure about moving forward with such an important step. Filing for bankruptcy is a major decision, and it is beneficial to have all necessary information before moving forward. 

Reasons to file for bankruptcy

A California resident who is struggling with debt might want to consider several options before filing for bankruptcy. In some cases, it's possible to negotiate a payment plan with creditors. A debtor could also consider credit counseling. Some credit counseling services might be able to negotiate with creditors and get them to agree to lower payments. Of course, dipping into savings is another way to eliminate debts.

The link between medical debt and bankruptcy

Some California residents may be a single medical emergency away from filing for bankruptcy. This is the takeaway from a study conducted by a professor at CUNY Hunter College in New York and several others. The study looked at 910 random bankruptcy filings between 2013 and 2016. Of those bankruptcy filings, 58.5 percent were related to medical expenses. Those who get sick may be vulnerable to losing their jobs, which may cut off access to an employer-based health plan.

Circumstances dictate the appropriate type of bankruptcy

Many California residents struggle with debt for some years before it becomes too burdensome or simply impossible to continue on any longer. The reluctance to seek help is often the result of a perceived stigma of acquiring debt that is unmanageable, yet unforeseen circumstances, such as an emergency medical necessity, are in many cases the underlying cause. There are many reasons why bankruptcy is beneficial to permit a debtor to have a fresh start. An important first step is to determine if the debts are such that can be relieved through bankruptcy and which form may be appropriate.

Waiting period required before filing for bankruptcy again

High living expenses in California coupled with a crisis like a job loss or serious health problems sometimes send people into bankruptcy. Although bankruptcy is meant to give people a fresh financial start, the law generally recognizes that people might need to file for protection more than once. Debtors must observe waiting periods before filing again, and the type of their original bankruptcy action influences how long they must wait.