Let’s talk a little bit about bankruptcy. In today’s economy, it is extremely easy to get consumed in debt, and more and more individuals are resorting to bankruptcy for a second chance at financial freedom. If you don’t fully understand or know what the term bankruptcy means, it can be described as a monetary “clean slate” – hitting the reset button on life.
Before making the decision to actually file for bankruptcy assistance, those considering it should think long and hard about whether they actually need to do it. The process isn’t to be taken lightly and can only be repeated once every eight years, and remains on your credit history for seven to ten years, thus making it important to weigh the decision carefully. Chapter 7 bankruptcy, the “cookie-cutter” version of it, is the most common type and is a relatively simple and effective process to get started. The actual process generally takes only a few months to complete, essentially wiping out some of society’s most crippling of debts. However, it is important to note that not all debts are forgiven through bankruptcy, as there are some which are nearly inescapable. The process is effective at releasing the tension and suffocation from unsecured debts such as credit cards, medical bills, etc. – but does NOT generally render the debtor exempt from obligations such as child support, student loans, taxes, or criminal restitution (although there are circumstances in which some of these may be discharged). Someone who is considering filing for bankruptcy often fits a familiar scenario – an individual who may already be suffering from financial hardship and excessive amounts of debt then encounters an added problem such as unemployment, divorce, injury, loss of insurance, etc. The law defining bankruptcy was designed originally to help people in such circumstances, providing an opportunity to live their lives again without the burden of debt and collection agencies hounding their every move. In the state of California, even before filing bankruptcy, it is possible for a person to protect their assets from being taken away. Under the Exemption Laws of California, it is possible to be “judgement-proof,” preventing unsecured creditors from taking claim of your belongings. although this may not be the best long-term solution. It is even possible to cease their harassing phone calls and letters by contacting the creditors directly, although you must be careful when doing so as offering to pay the debt, or even acknowledging that it is your debt and your intent to pay it can have drastic and negative effects. If you have been experiencing paralyzing financial difficulty and feel as if one of these options may benefit you, make sure to talk to a California bankruptcy lawyer to get some answers and find out what the best option is for you; your financial freedom awaits!