I know it is hard to even consider making that first move to call a bankruptcy attorney and make an appointment. People often think that they have to be completely broke in order to consider bankruptcy. However, talking to a bankruptcy attorney sooner rather than later allows you to better understand your options and have a solid plan going forward. Waiting until you are in dire straits often results in rushed planning and possibly lost assets that could have been protected. So, when should you consider talking to a bankruptcy attorney?
Collection agencies are calling and sending notices.
It is easy to get overwhelmed by the amount of collection mail and not open any of it. It is also easy to ignore all of the phone calls coming in. Ignoring the initial collections can result in a lawsuit against you, which can be even harder to deal with.
You were just served with a lawsuit.
A lawsuit is now pending for debt collection. If you have been served with a summons for a lawsuit filed by one of your creditors, you have a limited time to respond to the lawsuit. If you do not respond, the collection firm will likely win a default judgment against you and can then move to garnish your wages and/or bank account or put a lien on your house.
You are relying on credit cards to pay for living expenses.
This is one of the earlier warning signs because it means that your credit card bills are increasing, but you do not have any money to keep up with them. If you are using one credit card to pay another credit card each month, it may be time to consider some long-term planning. Making just the minimum payments on credit cards also ties into this warning sign.
Your mortgage payments are behind or are often paid within the “15-day grace period” each month.
If you are more than a month behind on your mortgage, it can be very difficult to catch-up because most banks will not take your payments until you pay the full amount due – they won’t take partial payments. This often leads to a downward spiral where you are several months behind. Talking to a bankruptcy attorney can help you organize your options for keeping the house, as there may be several strategies that can be used to make your loan current again.
Your wages or bank accounts have been garnished.
Once a creditor obtains a judgment against you, they will start looking for money to pay the judgment. One of the most common ways to do that is to garnish your wages. If you are already having problems making ends meet and then 25% of your paycheck disappears, that is a significant hardship. It is almost always better to talk to a bankruptcy attorney long before your debts get to this stage.
If I call a bankruptcy attorney, does that mean I have to file bankruptcy?
Absolutely not. Part of the first meeting is for us to review your financial situation and discuss all of the options available to you, including non-bankruptcy options. My goal is to outline as many options as possible and explain the pros and cons of each route. The decision to file for bankruptcy will always be yours to make.
Bankruptcy is not a one-size-fits-all proposition, but it is a useful and flexible tool for many different situations if properly planned. If you are struggling to make ends meet and are overwhelmed by debt, please contact me to schedule an appointment.
This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. If you live in Alameda County, Contra Costa County, Santa Clara County, or San Joaquin County and would like to speak with me regarding your situation, please email me at [email protected] or call 925-586-6738.