Deciding to file for bankruptcy depends on various factors that are unique to the debtor's specific situation. Some may find that bankruptcy is their only option to achieve debt relief while other individuals may find a consolidation loan to be more beneficial for their position. When deciding to file for bankruptcy debtors are encouraged to assess their financial affairs and assets to determine the most proper course of action. The following section will highlight the signs that you may be heading towards bankruptcy. Heading towards bankruptcy means the debtor is unable to pay off accumulated debt or is unable to keep up with bills and the cost of living due to accumulated debt.

If you are heading towards bankruptcy, the San Diego Bankruptcy Attorneys encourage you to learn more about the different debt reliefs offered by the U.S Bankruptcy Code. If you are a single or married individual wishing to file for bankruptcy, the most common way to do so is through Chapter 7 or Chapter 13. Choosing the bankruptcy chapter will require a detailed evaluation of the debtor's economic affairs. If you are a business owner, a corporation, a farmer, a fisherman, or a municipality, you may find debt relief through Chapter 9, Chapter 11, and Chapter 12. Chapter 9, 11, 12, and 13 allow individuals with a renewable income to establish a repayment plan that includes full payments to certain creditors and a discharge of certain debts. To learn more about these laws and how they apply to your bankruptcy case, please contact the San Diego Bankruptcy Attorneys at 619-488-6168. If you find that the following signs illustrate your current economic standing, it might be a good idea to consider the benefits of debt relief.

You paid off your unsecured debt (credit) with a home equity loan: For some individuals, it might make sense to pay off a credit line with a home equity loan which can consolidate all your debt. However, if you have now paid off unsecured debt with a secured property. Using a home equity loan to pay off credit cards is only a good idea if you pay off your credit cards and if you are capable of sustaining the monthly mortgage payments. If you are a homeowner and you are considering bankruptcy, you might consider speaking with a local attorney who can provide clarity on the bankruptcy laws in your state. If you qualify for a Chapter 13 you may be capable of keeping your home and discharging some of your debt. If you file for Chapter 13 you are obligated to create a repayment program with certain creditors being paid in full. Your repayment program must be approved by a bankruptcy judge.

You find it difficult to save money: Saving is an essential part of life that is enabled when you contribute your time to a job. If you are not saving for retirement, for a home, for travels, or for many of the enjoyments of life due to accumulated debt, it's time to start thinking about bankruptcy. Getting by on your monthly bills without the ability to save is a stressful situation that can be alleviated by the relief programs offered by the bankruptcy code. Individuals may find that a consolidation of their debt and discharge of partial debt will allow them to save money and enjoy life in a different way. You do not have to lose all of your property when filing for bankruptcy there are ways in which individuals with renewable incomes can settle their debt for less and in return save money for retirement and other life activities.

Debt collectors are contacting your cell phone, home address, and email: When debtors are late on monthly payments or are past due 30 to 90 days, they will have their accounts transferred to debt collectors. Accounts that are past due are reported on your credit report and may be charged off. When your account is charged off you may encounter a lawsuit and you may be required to pay the amount you owe immediately. Debt collectors will attempt to contact you to help you bring your account back to a good standing. If you are receiving calls from debt collectors and you cannot pay them off, you may want to consider filing for bankruptcy. Paying off the basic minimum to keep your account from charging is not enough to have your account brought back to a good standing. Debtors may find more relief by filing for bankruptcy and exploring lower repayment options.

Your credit cards are almost at their limit or have surpassed their limit: If you are using credit to maintain your cost of living, you must understand that your credit has a cap that will eventually be reached. Once you have reached your credit card limit or you have surpassed your credit limit, you may find yourself putting aside essentials bills and accumulating debt due to the deficit caused by the credit cap. If you are living off of credit it is probably a good time to start thinking about bankruptcy. When you file for bankruptcy your creditors can no longer pursue payment once your debts have been discharged in a court of law. Often times your creditors will understand your difficult situation and will provide a method of payment so that you can get back on track with your finances. After considering your monthly budget and after exhausting any possible method to gain traction on your debt, you should contact a bankruptcy attorney to find ways in which you can find some debt relief.

You have acquired a loan with a high-interest rate: Sometimes indebted individuals see high-interest rate loans as their only line to survival. If you are already in debt, “payday” loans will only worsen your situation. What many fail to acknowledge is that these “instant loans” come with an outrageous interest rate. If you read the fine print you may encounter loans with interests rates well above 180%. On average you do not want a loan with an annual percentage rate (APR) above 25%. If you qualify, consolidations loans can provide a much lower APR than instant “payday” loans. Acquiring a high-cost loan will add to your unsecured debt and is not advisable for anyone seeking to get back on their feet.

You don’t qualify for a consolidation loan or a debt management program: Consolidation loans and other debt repayment programs provided by creditors might offer the debtor a form of financial relief. Consolidation loans and some of the debt management program includes lower monthly payments and in some cases, debtors may receive a discharge of certain debts. However, there are times when the debtor's credit score is too low to qualify for a consolidation loan or a debt repayment program. If the debtor does not qualify for a repayment program or a consolidation loan, their only option may be to file for bankruptcy.

You are unable to lower your debt with your current monthly income: Making monthly minimum payments is a good way to have your credit stalled for a prolonged period of time. Your monthly income should allow you to pay off debt and then save some money. If you are making monthly minimum payments, you are likely ignoring other bills or other costs that come with owning a home or a vehicle. If you find yourself unable to pay off your debt, you have several options to help you gain control of your debt. Some options include creating a monthly budget to help you manage your finances, working an additional job, or debt consolidation loans. If you have exhausted these measures and you find that you are working to pay the minimum amount of bills, you may want to consider filing for bankruptcy. Filing for bankruptcy if you are in a similar situation is not so scary. If you are an individual with a renewable source of income, you may qualify for a Chapter 13 bankruptcy which will enable you to establish a repayment plan and allow you to keep your property and assets. For many individuals, a fresh start through bankruptcy will allow a realistic approach to establishing a good credit score and a good economic standing.

You have suffered an accident that prevents you from maintaining a renewable source of income: Most Americans are hardworking individuals that are susceptible to work-related injuries. In some events, a work-related injury may be compensated with workers compensation. However, the wage-replacement under workers compensation may not cover all of the debtor's financial obligation. Even worse is when you suffer a personal injury that puts you out of work with zero compensations. For individuals in this situation, bankruptcy might be the most favorable option to get back to a good credit standing.

You put aside essential bills to pay off your secured and unsecured debt: Individuals who create an effective monthly budget are capable of paying off their bills by determining where their money is most effective. If you find that you are cutting down on essential bills or your cost of living (gas, water, power, food, rent), it could mean you are cutting down on unnecessary usage of light or other resources to save some extra cash. However, if you drastically cut down on other bills it can cause an accumulation of debt and other damages. You should have enough money to cover your bills, cost of living, and other essential services. If you find that you are cutting down on your cost of living by avoiding regular car repairs or not having a health insurance policy, you may want to consider filing for bankruptcy. The San Diego Bankruptcy Attorneys believe that individuals should not put aside essential life necessities in order to pay off their debt. If you are struggling with your finances due to your income and accumulated debt, you may qualify to have some of your debt discharged so that you can repay your creditors and maintain a healthy lifestyle unaltered by your economic situation.

You are missing your monthly vehicle and home payments: A roof over your head and an automobile are essential if you want to survive in a big city like Los Angeles or San Diego. If your debt is making you question what bill you need to juggle this month, it may be time to consider filing for bankruptcy. Do not wait until your car is repossessed. Under certain chapters, you may have your car exempt so that you can maintain a working schedule. Without a car, you may encounter different challenges when transporting yourself from your home to your workplace. If you are past due on your vehicle or home mortgage you should consider contacting a local bankruptcy attorney who can help you assess your situation and provide guidance through the bankruptcy code.

Filing for bankruptcy may be your only option or it may be the best option for your situation. If you are stuck in debt for the next 10 years, it may be a good idea to have some of that debt discharged. Debtors can discharge all of their debts by filing a Chapter 7 bankruptcy petition. If you are capable of paying back some of your debt through a renewable source of income, you may qualify to have some of your debt discharged while you pay back your creditors with a law-abiding repayment program. In either case, your debt can be significantly reduced so that you are brought back to a good economic standing. Debtors who have filed for bankruptcy have been able to apply for car loans and home mortgage loans in as little as 2-4 years. Every individual faces different factors that will affect the outcome of their bankruptcy case. To have a specialist assess your account and provide options for financial recovery, please contact the San Diego Bankruptcy Attorneys at 619-488-6168. We are ready to provide clarity on the laws that guide bankruptcy and we are ready to represent your case in any U.S courtroom.