For many in California, financial struggles have left little choice but to seek bankruptcy protection. However, the decision to file is never an easy one, and many people fear that completing a Chapter 7 bankruptcy will mean that they will have no access to new lines of credit for many years to come. In reality, however, there are plenty of credit opportunities for consumers who have gone through bankruptcy, including car loans.
Anyone who has emerged from college only to be confronted by a mountain of debt understands how difficult it can be to establish a career and begin to pay down student loans. For some, these first few years require a degree of hardship, but the end result is a well-paying position in the field of their choice. For others in California, the path is not so smooth, and debt continues to accrue in the form of credit cards and loans. At some point, many will consider whether Chapter 7 bankruptcy is the best course of action.
For many in California, financial strain has reached the point where filing for bankruptcy is the best possible solution. There are several choices when preparing to file, but Chapter 7 is the option that most people consider, because it is the type of filing that leads to the elimination of many forms of unsecured debt. The following information is given to give readers a very basic overview of the Chapter 7 bankruptcy process.
Once a California resident has made the decision to file for bankruptcy, a mix of relief and concern often follows. Consumers are relieved in the knowledge that their debt problems are going to be eased once the process is complete. However, many are also worried about the impact that personal bankruptcy will have on their credit scores. It is important to understand that, while bankruptcy will have an impact on credit scoring, it is possible to rebuild credit in a relatively short period of time.
California consumers who are facing overwhelming debt may be considering filing for bankruptcy. Personal bankruptcy offers consumers various forms of protection, which is available through Chapter 7 or Chapter 13 bankruptcy. By completing a means test, consumers will be able to determine the chapter of bankruptcy for which they qualify. If this sounds intimidating, consumers may find comfort in knowing that an experienced bankruptcy attorney can guide them through the means test and subsequent bankruptcy procedures.
The amount a consumer initially considered affordable for a mortgage payment may become unaffordable after some years. Circumstances constantly change and job loss, unexpected medical expenses or death in a family may have an adverse impact on a homeowner's financial stability. It was reported that 15 percent of homeowners are defaulting on their mortgage payments. Personal bankruptcy may prove to be a suitable remedy for some.
For many California residents, financial difficulties rise slowly over time, leaving an individual unaware of just how dire the situation has become until one or more events act as a catalyst for change. From that point forward, the decision becomes not whether or not to seek bankruptcy protection, but turns to which type of personal bankruptcy should be sought. The answer depends in large part on the assets owned and the level of income available to continue making payment in existing debts.
Many California readers will have heard media coverage of a recent phone scam in which individuals have defrauded thousands of people who believed that they were making payments on outstanding tax debt. The matter has drawn the attention of the Treasury Inspector General for Taxpayer Administration, and an official statement has been issues warning taxpayers about the scam. For those who owe a significant tax debt, the stress associated with that debt burden can lead some to take drastic actions to pay down the debt, including falling victim to these types of scams. Many are unaware that filing for Chapter 7 bankruptcy can lead to the discharge of tax debt.
When financial struggles arise, the primary concern of many California homeowners is their ability to retain their home, or the chances of purchasing another property in the years to come. In many cases, the only course of action that makes financial sense is to file for Chapter 7 bankruptcy. That process will lead the home to go through foreclosure, which many homeowners wrongly assume will prohibit them from purchasing another home down the line.
Many California residents are continuing to feel the aftereffects of the recent recession, and are struggling to regain financial stability. For some, high levels of credit card debt are a major concern. Others face home loans that are for more than their property is currently worth. Still others are saddled with old tax debt, and see no way of paying down those obligations. It is important for consumers to know that it is possible to eliminate tax debt through a Chapter 7 bankruptcy.