“If you are struggling to pay your bills, you are not alone; but please do not ignore the issue,” says Bert Briones, an Irvine, CA personal finance law/bankruptcy attorney.  As our economy continues to present problems, many folks are in debt trouble or are very close to being in this category.  Make sure you begin to explore all your options, while at the same time, avoid credit repair scams, and educate yourself as much as possible.

Talk to Your Creditors

Most of the time, it would be helpful to contact your creditors and explain to them what is going on.  Often times, they are willing to help you work out a better payment plan that would possibly reduce your payment and/or waive or reduce fees.  One exception is if you are filing bankruptcy, and have no plans to repay your debts.  You will have the right to insist that creditors stop harassing you with phone calls via the Fair Debt Collection Practices Act (FDCPA).

More Effective Budgeting

Have you formed a budget and actually stuck with it?  With hard work, you may be able to find your way out of trouble.  Look into ways to reduce your expenses while forming your budget.  Make sure you list your expenses by priority, such as rent or a mortgage, utilities, food, etc., and those less important expenses.

Consolidation Loan

A consolidation loan may be an option to help pay down unsecured debt, since interest rates tend to be lower than what is charged with credit cards.  There may also be tax advantages to explore as well (be sure to seek advice from a tax expert).  If you plan to possibly take out a consolidation loan, make sure you can handle the payments to avoid the risk of foreclosure.  In addition, be aware of the fees associated with a new loan, as they can be quite high.

Is Bankruptcy a Good Option for You?

Bankruptcy is filed in federal court and its primary purpose is to give a debtor a “fresh start” by relieving the debtor of most debts, and to repay creditors to the extent that is manageable by the debtor. 

A Chapter 7 bankruptcy is basically a “liquidation” bankruptcy and a Chapter 13 bankruptcy could be considered a “reorganization” bankruptcy.  If you are considering filing bankruptcy, it is adviseable to seek professional help from an experienced bankruptcy attorney to form an opinion of all your options.

Please call Red Hill Law Group with any questions or to schedule a free face-to-face or phone consultation at 877-343-3289 or use our contact form and you will be contacted within the next business day.

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