[COLUMN] Bankruptcy: When you’ve done everything you can but it’s still not good enough

WHEN debts become unmanageable, bankruptcy can become an invaluable financial recovery in helping regain control over your finances. Without the “fresh start” that bankruptcy provides, it would be impossible for a lot of people to ever pay back what they owe, and they will simply remain stuck in debt with nowhere to go. If you’ve tried everything you can to pay your debts but nothing has worked up to this point, it may be time to consider legal options.

Debt problems can happen to anyone at any time. No one is exempt. Bankruptcy is a fact of life.  Without it, people with serious debt problems will remain stuck where they are, unable to move on with their lives.  Living with stress every day caused by the burden of debt is a horrible way to live. Bankruptcy can offer hope when the future looks bleak. So, the whole concept of bankruptcy is to give you a fresh financial start when you have done your best to find a way out of debt but have realized that nothing is working anymore. So instead of trying to “fix” the situation, you just start with a clean slate.

Some people with limited income and resources will qualify for Chapter 7 to completely wipe out their debts. Others may have no choice but to file Chapter 13 and pay their creditors over a 3 to 5- year period. Much of it depends on your income and your assets.  You also need to take into consideration your objective in seeking debt relief.  Do you need to just wipe out your debts so you can start over or do you just need to consolidate your bills into a more affordable monthly payment?

Under the rules for Chapter 7 bankruptcy eligibility, your current monthly income must be measured against the median monthly income for a family of your size in your state. If your average monthly income is lower than the median, Chapter 7 may be for you. If your income is higher than the median, Chapter 7 is still a possibility, but there is an additional step. You have to pass what’s known as “the means test”, a mathematical formula for calculating your disposable income and determining whether it is high enough to help pay off some of your debts. If the court believes that you are in a position to pay a certain portion of your debts through Chapter 13, then whatever amount you can afford will be good enough and you don’t necessarily have to pay everything in full.

Chapter 13 can be the most effective way to consolidate all your debts into one low monthly payment while paying 0% on your credit card and other unsecured debts.  As I mentioned above, in a lot of cases, most debts are only paid a small percentage of the actual amount, resulting in significant reduction- a reduction of 50% or more is not unusual. So, for the sake of this discussion, let’s say that you owe a total of $50,000 in credit card debts but you can only afford to pay $400 per month. This amount may be acceptable and good enough to satisfy all creditor claims. Call my office and I will explain to you how this might be possible. Just imagine what this will do for you if you can cut your debt payments every month by more than half!  Or better yet, if you qualify for Chapter 7, then you may not have to make any payments at all! No more sleepless nights worrying about your bills. No more living paycheck to paycheck and wondering every month how you can afford to pay rent and keep the lights on until the next paycheck comes.

Instead of hopelessly trying to pay your debts and not making progress, you may be better off just filing bankruptcy now to start fresh and rebuild your credit sooner than later.  If you need help in getting out of debt, I would like to help you. Call my office at 1-866-477-7772 and let’s talk about how I can get you a fresh financial start through either Chapter 7 or 13. Or if bankruptcy is not the best option for you, perhaps I can help you negotiate settlements with your creditors.

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None of the information herein is intended to give legal advice for any specific situation.  Atty. Ray J. Bulaon has successfully helped over 6,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call RJB Law Offices at TOLL FREE  1-866-477-7772.

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