The decision on whether or not to file bankruptcy can be daunting. There are several pros and cons involving both state and federal law. Thus, a good Bankruptcy Attorney in Murrieta will review your finances and go over your options based on California’s bankruptcy law. The biggest pros to filing are that you are granted an automatic stay (which means that your creditors must stop attempting to collect the debt you owe – the phone will stop ringing!) and that you may be able to discharge all or part of your personal liability for your debts.
A Bankruptcy Attorney in Murrieta would be able to review with you exactly which debts are able to be discharged, and which ones are not. As a general rule, you can not discharge debts that you have put up collateral for (these are sometimes called secured debts.) For example if you owe $75,000 on a loan that you put up a piece of land valued at $50,000 for, you would not be able to discharge the $50,000 portion, but you can probably discharge the additional $25,000.There are also cons to filing. The biggest, is that you may lose some of your assets. Fortunately, you will not lost property that is considered exempt. California requires that you use their list of exemptions (as opposed to the Federal list.) Whichever Bankruptcy Attorney in Murrieta you choose will go over this list with you and advise you of what transfers you can legally make before you file bankruptcy to protect as many of your assets as possible. For example, cash is not exempt, however you can use it to increase your equity in your home (by paying down your mortgage) before you file. It is vital, however, that you consult with your lawyer before doing any of this to make sure you do not accidentally commit bankruptcy fraud which can result in fines and/or prison time.
Second, your credit rating will reflect your bankruptcy for a long time and may make it hard to get loans for several years after you have filed. Keep in mind though, if your current credit score is bad then it would have been unlikely to improve without filing.
If you are unsure what to do, meet with a Bankruptcy Attorney in Murrieta to review your situation and the best solution for you.