Some people in Los Angeles are right now wondering if they should declare Bankruptcy due to financial desperation. So, what can Bankruptcy do for you and what's it going to cost you?
1. A Chapter 7 Bankruptcy can eliminate all of your credit card debts. However, if you have assets that go beyond your maximum exemption limits, the Bankruptcy Trustee can force you to sell your assets that go beyond your exemptions in order to pay off your credit cards.
2. A Chapter 13 Bankruptcy can help you avoid losing your home. However, you must be able to afford making plan payments from 3 to 5 years, and keep making your present mortgage payments.
3. A Chapter 11 Bankruptcy can actually be used for individuals that do not even have a business if their debt load goes beyond maximum amounts under a Chapter 13 filing.
4. A Bankruptcy does not allow you to pick and choose which debts and assets you wish to disclose. It is an "all or nothing" proposition.
5. A Chapter 7 Bankruptcy can actually allow you to avoid some of your tax debts, provided they are over three years old and you have a current payment plan with the tax agency.
The downside is that your credit will be affected. However, there is a good chance your credit has already been beaten down as you have fallen into this financial crisis. After your Bankruptcy is discharged, credit companies will be salivating over the opportunity to lend money to a person who cannot declare Bankruptcy again for at least another eight years.
If you think more deeply about these issues, many questions come to mind that are unique to you. As a Pasadena Bankruptcy Lawyer, I can demystify the subtleties of the Bankruptcy Laws so that you can maximize your relief and minimize your stress and anxiety over what is sure to be a difficult decision.
