California residents can fall into financial turmoil through a number of events, many of which are outside the scope of their control. No one turns to bankruptcy in order to walk away from financial obligations that they could otherwise repay. However, when good faith repayment efforts fail, personal bankruptcy is often the only solution that makes sense.
As an example, if a consumer has a bank loan that has fallen into arrears, he can contact the bank to ask for restructuring of that loan. The bank can work out a new payment plan, or they can refuse to discuss any modification of the original lending terms. That leaves the borrower with little choice but to search for other debt relief options.
Waiting things out is unlikely to improve this scenario. If the consumer waits long enough, the bank could sue. A court might rule in favor of the lender, which can lead to wage garnishment to recover the debt. That leaves the borrower with even fewer funds to cover living expenses or address other debt.
In such cases, the only reasonable course of action that remains is to seek the elimination of those debts by means of personal bankruptcy. Many California residents who have sought that resolution look back and wish that they had made that choice far earlier in the process. There is no need to wait until one has been sued to pursue bankruptcy relief; that option is viable as soon as it becomes apparent that repayment is not going to be a possibility.
Source: The Huffington Post, "My Bank Won't Work With Me So I Can Pay My Debt", Steve Rhode, Jan. 13, 2016