Is Bankruptcy Right for You? 

If you're struggling to pay bills and meet your financial obligations, the United States Bankruptcy Code offers avenues for a fresh start. This path is ideal for some people and less so for others. How do you know whether bankruptcy is right for you in Fresno? That’s what the experienced bankruptcy lawyers at Arnold Law Group, APC, are here to help you figure out. 

Call our office at (559) 900-1263 or reach out here online to schedule a consultation and tell us about your situation.

What Bankruptcy Can Do for You

There are several benefits that come from filing for bankruptcy, including these: 

• Debt Discharge: One of the primary benefits of bankruptcy is the discharge of eligible debts. This means that once your bankruptcy is complete, you are no longer obligated to repay those debts. This can provide a significant sense of relief and allow you to rebuild your financial life.
• Protection from Creditors: When you file for bankruptcy, an automatic stay is imposed, which prevents creditors from taking any further collection actions against you. This means that they cannot initiate or continue lawsuits, garnish your wages, or engage in any other collection activities, providing you with immediate respite from creditor harassment.
• Asset Protection: Depending on the type of bankruptcy you file for, certain assets may be protected from liquidation. 
• Reorganization of Debts: For those with regular income, we can file for bankruptcy in a way that allows the creation of a manageable repayment plan that will take place over 3-to-5 years. This can help you regain control of your finances while retaining your assets.

What Bankruptcy Can't Do for You

Bankruptcy can’t do everything. Here are some prime examples of things this process does not help you do: 

• Eliminate All Debts: While bankruptcy can eliminate a significant portion of your debts, not all debts are dischargeable. Examples of non-dischargeable debts include child support, alimony, some tax debts, student loans (in most cases), and debts incurred through fraud or illegal activities. 
• Quickly Fix Your Credit: Filing for bankruptcy will have a negative impact on your credit score and remain on your credit report for several years. While it can provide a fresh start, rebuilding your credit will take time and effort. 
• Protect Your Co-Signers: If you have a co-signer on a loan, such as a family member or friend, filing for bankruptcy will not protect them from their obligations on the debt. The creditor can still pursue the co-signer for payment.

The Downside of Bankruptcy

Understanding whether bankruptcy is right for you also means prudent consideration of the potential consequences of this decision. Consequences like these: 

• Adverse Impact on Credit Score: A bankruptcy filing will remain on your credit report for several years, making it challenging to obtain new credit or loans at favorable terms. It can affect your ability to secure housing, employment, insurance, or even utility services.
• Limited Access to Credit: After filing for bankruptcy, obtaining credit can be difficult. Lenders may view you as a higher-risk borrower, resulting in limited access to credit cards, loans, mortgages, and other forms of financing. If you are approved for credit, it may come with steep interest rates and unfavorable terms.
• Loss of Assets: Depending on the type of bankruptcy you file for, there is a possibility of losing some of your assets. While exemptions exist to protect essentials, like your home, car, and personal belongings, non-exempt assets may be sold to satisfy your debts.
• Negative Social Stigma: Bankruptcy carries a social stigma that can affect your self-esteem and personal relationships. Some people may view bankruptcy as a sign of financial irresponsibility or failure. This is not accurate, but it is an unfortunate perception that is far too prevalent in our society. 
• Potential Employment Consequences: In certain industries or job roles, a bankruptcy filing may have implications for employment. Employers may conduct background checks that include credit history, and a bankruptcy filing could raise concerns about financial integrity or responsibility. Again, those concerns are not necessarily fair, but clients must be aware of this possibility. 

You can get dependable and trustworthy counsel at Arnold Law Group, APC. Schedule a consultation by calling us at (559) 900-1263.

What Chapter of Bankruptcy Should I File? 

There are several different options for bankruptcy filing, but the most common are Chapter 7 and Chapter 13. Both types of bankruptcy offer relief from overwhelming debt, but they have distinct differences in terms of eligibility, requirements, and outcomes. Here are some key considerations that we’ll talk over with you: 

• Eligibility: Chapter 7 bankruptcy has stricter income limits and is primarily available to individuals with limited means. If you earn more than the median income in California and can afford to repay a portion of your debts, you may be required to file for Chapter 13 bankruptcy.
• Debt Discharge: Chapter 7 bankruptcy is often referred to as liquidation bankruptcy because it involves selling assets to repay creditors. Chapter 13 bankruptcy involves creating a repayment plan.
• Timeline: Chapter 7 bankruptcy is typically the faster process. These cases can be resolved in a matter of months, allowing for a quicker discharge of debts. Conversely, the 3-to-5-year period of repayment required by Chapter 13 means that the process will stretch out longer. 
• Credit Impact: Both Chapter 7 and Chapter 13 bankruptcy will have a negative impact on your credit score. However, Chapter 7 bankruptcy remains on your credit report for ten years, while Chapter 13 remains for seven years. 

Chapter 7 bankruptcy is typically suitable for individuals with minimal disposable income and no feasible way to repay their debts. If you have little or no surplus income after covering necessary expenses, Chapter 7 may be a viable option. However, if you have a steady income and can afford to repay a portion of your debts over time, Chapter 13 may be a better choice.

Ultimately, the decision between Chapter 7 and Chapter 13 bankruptcy should be based on your unique financial situation, income, assets, and goals. Consulting with our bankruptcy attorneys may be invaluable in helping you decide whether bankruptcy is right for you in Fresno, and which process you should choose. 

Finding a New Beginning

The oppressiveness of debt can be hard to deal with, but there is hope on the other side. We’re here to help you navigate the legal and financial implications and help get you to the fresh beginning you deserve. 

Call Arnold Law Group, APC, at (559) 900-1263.