Debts often accumulate when your expenses exceed your income. Some people borrow money to cover the deficit, causing their debts to increase further due to compounding interest and the racking of fees and unpaid balances. If these debts are left unpaid, they will only increase, and you stand to face lawsuits, eviction or repossession.
A specialized attorney can assist you with your financial situation by helping you file for bankruptcy. However, this can be difficult if you cannot recognize the signs that you might need one.
You cannot cover necessities
If you find yourself in a position where you cannot settle your debts after paying your rent, utilities, food and transportation, it might be time to ask for help. Sometimes, this means hiring an attorney. Being unable to make minimum payments is a possible sign that you will need to file for bankruptcy – especially if negotiating your debt fails.
You are facing legal action
One of the biggest warning signs that you risk bankruptcy is if you face foreclosure, repossession or lawsuits. This often happens if you fail to pay your mortgage or other secured loans and unpaid debts on time. If you are unable to pay what you owe, you risk losing your car, your house and your personal property. A Chapter 7 bankruptcy can help you by discharging and wiping away unsecured debts such as credit card debts and medical bills.
You are selling your property to pay off debts
Another sign to be wary of is if you find yourself selling properties you own, such as your car, just to settle debts. Similarly, it may be time to consider hiring an attorney if you start withdrawing your retirement funds to pay off your debts.
You have no payment plan
Being unable to establish or follow a payment plan is a strong indicator that you might have to file for bankruptcy. In California, Chapter 13 bankruptcy can help people with a regular income to reorganize their debt and repay it over a three-year or five-year time period. However, navigating bankruptcy can be extremely difficult without the help of an attorney.
You have reached your credit limit
If you max out your credit card, it means you have reached the limit of the amount you can spend. Normally, you can fix this by paying down the balance, but this can be difficult if you do not have the means to do so. If this happens, a bankruptcy attorney can help you decide your next course of action.
What should you do before hiring a bankruptcy attorney?
If you plan to hire a bankruptcy attorney, make sure to compile a list of all your assets, income and expenses to help you outline your financial situation. You will need to do your own research to find a suitable attorney in Hemet, though it is strongly recommended that you find one who specializes in Chapter 7 or Chapter 13 bankruptcy, depending on your case.
For many people, filing for bankruptcy can be extremely stressful and confusing, but doing so might be the difference between losing everything and allowing yourself to breathe.