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.

However, there are also situations in which filing for bankruptcy might be the best solution. Filing for bankruptcy can help save a home that is in foreclosure or other assets. Even a person who only has a few assets may want to file for bankruptcy since all or most of the debts may be discharged.

Debtors who are struggling to pay off medical bills might want to file for bankruptcy. Bankruptcy may also be the best option for people who are facing lawsuits or wage garnishment. Once someone has filed for bankruptcy, creditors must immediately cease any actions against them. A person who is overwhelmed by debt may want to contact an attorney to discuss these and any other options.

An attorney may be able to explain whether a person is eligible for Chapter 7 or Chapter 13 bankruptcy. Those filing for Chapter 7 may be able to discharge their debts and keep all or most of their assets. On the other hand, someone filing for Chapter 13 can restructure payments to creditors over a period of three to five years. A Chapter 13 filing could stop a foreclosure on a home if the person is able to keep to a payment plan. Once a bankruptcy is discharged, the person can begin rebuilding credit.