Signs It Is Time to File Bankruptcy: A Guide for San Gabriel Valley Families

There is no single moment when bankruptcy becomes the right answer, but certain signs mean it is worth a free consultation now rather than later. If two or more of the situations below apply to you, talking to an attorney costs nothing and can stop problems from getting worse.

1. A creditor has sued you or garnished your wages

A lawsuit or a wage garnishment means a creditor has already moved past phone calls. In California a garnishment can take a significant share of each paycheck until the debt is paid. Filing bankruptcy triggers the automatic stay, which stops most garnishments and lawsuits. See stopping creditor calls for how this works.

2. You are paying one credit card with another

Balance transfers and cash advances to cover minimum payments usually mean the debt is growing faster than you can pay it down.

3. You can only make minimum payments, or not even those

If minimum payments take most of what is left after rent, food and transportation, the balances may never go down.

4. You are behind on your mortgage or received a Notice of Default

A Notice of Default starts California’s foreclosure timeline. Chapter 13 can stop a sale and give you up to five years to catch up. Read about foreclosure defense.

5. You are thinking about using retirement savings to pay debt

Money in most retirement accounts is protected in bankruptcy. Withdrawing it to pay credit cards can mean paying taxes and penalties on money you could have kept.

6. Collectors are calling you at work or at home every day

Once you hire an attorney, collectors must generally contact the attorney instead of you. Once you file, most collection must stop.

7. A medical bill, job loss or divorce changed your budget

Many of the San Gabriel Valley families we help were current on everything until one event changed their income. Bankruptcy exists for exactly that situation.

What happens at a free consultation

We look at your income, your debts and your property, and tell you whether Chapter 7, Chapter 13 or a non-bankruptcy option fits. Clients come to our Arcadia office from Pasadena, Monterey Park, Rosemead and nearby cities.

Talk to an attorney in Arcadia. Free consultation at 255 E Santa Clara St, Suite 210, Arcadia, CA 91006. Call (626) 593-1558 or use the form below.

This article is general information, not legal advice for your situation.