If you are deeply in debt and your bills are mounting, filing for bankruptcy may be an appealing option for you. You will have the chance to get your finances in order without creditors breathing down your neck. There may be other options available for you before you pursue bankruptcy. Sitting down and discussing your case with an attorney who will answer your questions can help you decide whether filing for bankruptcy is right for you. At the Bankruptcy Law Center, we have helped many California residents file for bankruptcy. Here are some of the most frequently asked questions everyone worries about when considering filing for bankruptcy. 

1. How Can I Afford to File for Bankruptcy?

If you are struggling to pay your bills and worried about your home being foreclosed upon, you are probably concerned about how you will pay for bankruptcy. Many debtors who are considering filing for bankruptcy have difficulty paying for the fees charged by bankruptcy attorneys and the bankruptcy court. Most bankruptcy attorneys provide flexible payment options that help clients pay for bankruptcy. 

Another option is to stop making payments on debts that will be discharged during your bankruptcy and use that money to fund your bankruptcy petition. You can also choose to retain a bankruptcy attorney who will handle all of your creditor calls while paying your fees over time. If you plan on filing for chapter 13 bankruptcy, you can pay your attorney fees as part of your repayment plan. In other words, you will not have to pay the fees now. Instead, they will be wrapped into your monthly payment plan to the bankruptcy court. Do not let concerns about being able to pay for bankruptcy stop you from filing for bankruptcy if that is the best option in your case. 

2. Is Filing for Bankruptcy Worth it?

The thought of filing for bankruptcy May seem overwhelming to you. You may have never even stepped foot in a court, and the thought of people coming through your finances can feel invasive. With all of this stress wrapped up in filing for bankruptcy, you may be wondering whether it is even worth it to try filing for bankruptcy. If it is not going to help you, it is not worth the time and stress to file for bankruptcy. In many cases, bankruptcy does actually help people. 

Even though some debts cannot be discharged in bankruptcy, such as child support, taxes, and student loans, many consumer debts will be discharged at the end of the process. Getting many of your debts discharged can help you take the time you need to create a plan to better yourself in your financial future. For many people, filing for bankruptcy is the reset they need to get their affairs in order. Many people who have filed for bankruptcy have gone on to have healthy finances in the future.

3. Am I Eligible to File for Bankruptcy?

Chapter 7 and Chapter 13 Bankruptcy have their own requirements for who is eligible to file. For example, if you would like to file for chapter 7 bankruptcy, you will need to pass a means test. The bankruptcy court uses a means test to decide whether you are unable to pay your debts. If your monthly disposable income is higher than the median income, you will not qualify. Your monthly disposable income is your monthly income minus all of your expenses. 

The higher your disposable income, the less likely you will pass the means test for chapter 7 bankruptcies. Even if you are not able to qualify for a Chapter 7 bankruptcy, you may be able to file for chapter 13 bankruptcy. It is easier to qualify for a Chapter 13 bankruptcy. If you have already filed for bankruptcy in the past, we recommend discussing your case with an attorney who can help you understand how long you need to wait before you can file again.

4. Will I Lose My Home, Car, and Other Possessions?

Are you concerned about losing your home, car, or your other important possessions? If so, you are not alone. This is one of the most common questions we are asked. In most cases, you will not lose your home or your car when you file for bankruptcy. If you file for chapter 7 bankruptcy, you will keep making payments on your house or car. The bank will send you a reaffirmation agreement and you will need to sign it and continue making your payments. In a chapter 13 bankruptcy, you will still make house payments, but your vehicle payment will go through the chapter 13 payment plan. They will get their payment from the chapter 13 bankruptcy trustee, not directly from you.

If you would like to keep your home and vehicle, you will be able to keep it. Sometimes people would like to sell their home or vehicle. Perhaps it is expensive and they cannot make the payments. A bankruptcy attorney can work with you to create a strategy for how you would like to approach this issue. When it comes to personal property, everyone who filed for bankruptcy is allotted a certain amount of exemptions that they can use toward personal property they would like to keep, such as their cell phones.

5. How Long Will My Low Credit Score Affect Me?

The effects of filing for bankruptcy last a long time. In most cases, filing for bankruptcy will stay on your credit report for at least 10 years. Filing for bankruptcy may hurt your ability to get a car loan, a mortgage, or insurance. Additionally, filing for bankruptcy could have a harmful effect on your employment, although many employers have hired and continue to hire people who have filed for bankruptcy. Filing for bankruptcy is a serious decision that will impact your life for years to come. Discussing your bankruptcy case with an attorney can help you understand all the pros and cons of filing for bankruptcy so you can make the best decision possible for yourself and your family.