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When Is Filing Bankruptcy
a Good Option?

Law Office of Robert L. Firth Feb. 16, 2022

If you are in financial distress, receiving countless calls from debt collectors, and feel unsure about how to pay back your creditors, you might be wondering, “Should I file for bankruptcy?” Filing for bankruptcy is a serious decision that can entail long-term consequences for you and your family.

That is why the decision to file for bankruptcy should not be taken lightly. If you want to regain control of your finances, you should speak with an experienced bankruptcy attorney to determine whether filing for bankruptcy would be the best option to get a fresh financial start in your life.

At the Law Office of Robert L. Firth, we can provide legal guidance and assess your financial situation to help you understand whether there are any alternatives to filing for bankruptcy. We proudly serve clients in Cathedral City, California, and throughout the Coachella Valley.

Assessing Your Current
Financial Situation

Determining whether or not you should file for bankruptcy involves assessing your current financial situation. For many people who struggle with paying back creditors, declaring bankruptcy may be the only good option they have left.

Consider speaking with an attorney to thoroughly examine your financial situation and determine whether there are any other debt-relief alternatives in your unique case. When assessing your situation, you should answer the following questions:

  • How much money is coming in? How much money do you owe to creditors? If you have enough money coming in to pay down your debts over time, filing for bankruptcy may not be necessary. However, if you do not earn enough to cover your basic expenses (food, housing, and so on) and pay your debts back, filing for bankruptcy may be a good option.

  • Do you receive phone calls, letters, or emails from collectors? If collectors keep calling or sending you letters or emails warning you of consequences for not paying them back, it might be tempting to file for bankruptcy to stop all debt collection actions. Once you declare bankruptcy, debt collectors will be prohibited from contacting you to try to collect debts.

  • Do you risk losing your home? If you are at risk of foreclosure, filing for bankruptcy may be your only option to keep a roof over your head. In particular, if you file for Chapter 13 bankruptcy, you can keep your home and other property even if you are past due on your mortgage payments.

Be completely honest with yourself and your bankruptcy attorney when answering these questions. Remember, your financial welfare could be at stake.

What Are Your Bankruptcy Options?

There are several bankruptcy options to choose from if you decide to move forward with filing for bankruptcy. At the Law Office of Robert L. Firth, we help debtors in Cathedral City, California, with two types of bankruptcies:

  • Chapter 7 bankruptcy. If you declare bankruptcy under this chapter, all of your unsecured debt will be discharged. However, filing for Chapter 7 bankruptcy also means that your non-exempt assets will be sold to pay off your debts. You may not be eligible to file under this chapter if your income exceeds the threshold.

  • Chapter 13 bankruptcy. If you file for bankruptcy under this chapter, you will have to propose your repayment plan outlining how you will repay your debts within the next three to five years. The greatest benefit of filing for Chapter 13 bankruptcy is that this option allows a debtor to keep their property while paying off debts over time. However, there are thresholds for the debtor’s income and the total amount of debt that may make the debtor ineligible to file under this chapter.

Consider speaking with a skilled bankruptcy attorney to review your unique situation and determine whether you should file for bankruptcy under Chapter 7 or Chapter 13 or explore alternative debt relief options. When considering declaring bankruptcy, keep in mind that certain types of debts will never be discharged. Non-dischargeable debts include most federal and state taxes, student loans, child support, alimony, and certain others.

Let the Law Office of
Robert L. Firth Help

Filing for bankruptcy can be complicated and stressful, especially if the debtor is not confident that declaring bankruptcy is the best option. For this reason, you should discuss your case with a knowledgeable bankruptcy attorney in Cathedral City, California, to understand your debt relief options.

At the Law Office of Robert L. Firth, we are prepared to help you examine the pros and cons of each option and choose the best solution for your specific case. You can call our office to schedule a case evaluation today.