For many Americans buried under credit card debt and no equity in their home, paying their bills gets harder every month. College graduates face college loans payments each month that a previous generation would have used to pay a mortgage. Self-employed people have to pay for their health insurance and a substantial portion of their income to the Social Security program. Any of these situations or a combination of them, can make it impossible for them to keep paying their monthly expenses. When this happens, it’s time to talk to a Bankruptcy Temecula lawyer.
Some people are so ashamed of their situation that they find it impossible to speak with anyone about their finances. They even stop answering the phone because bill collectors are calling. This is a big mistake. The earlier they speak with an attorney, the better he can protect their finances. The first thing that they have to realize is that they can’t declare bankruptcy if they did that a few years earlier. The second thing that they should know is that not all debts will be erased during the bankruptcy process. This includes student loans, back taxes and child support payments. If these payments are a problem, then the attorney will have to help the debtor deal with federal and state tax agencies. He may have to petition for a change in the divorce agreement.
There are several ways to declare bankruptcy. A Bankruptcy Temecula lawyer will help the debtor choose the best option for them. If the debtor doesn’t have a regular monthly income, the court will have a bankruptcy trustee sell off all of the debtor’s property. The money from these sales will be divided up among all of the creditors. Depending upon the state the debtor lives in, some assets may be exempt from sale. Sometimes the house in which the debtor lives or their car won’t be included. Usually the debtor can also keep some clothes and the tools that they use to make a living. This entire process takes about six months.
If the debtor does have a regular income, the bankruptcy trustee establishes a monthly budget for the debtor to live within. All other income above this amount, is divided among the creditors. The debtors usually agree to take less money than they are owed. This process can go on for up to five years.
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