Don't Let Your Creditors Take the Money You Need

While our clients are rightly concerned with the cost of filing bankruptcy, we find that they often fail to vastly underestimate the cost of waiting too long to file a case, when the facts are clear that a case would be in their best interest.  Credit card companies, medical bill collectors, and other creditors are experts at extracting every last dollar from people on the verge of insolvency.  The creditors will call and ask for "just one more payment" for them to "forbear", when in fact, they actually have no immediate ability to collect on their debt anyway because they have not sued and obtain a judgment.

If your creditors are offering to forbear for just one last payment, now is the time to ask yourself: is it practical for me to pay these debts back?  How does my outstanding debt compare to my after-tax income?  Am I insolvent?  If you are, the payments you are considering making to these creditors would very likely be your money to keep.  We can explain why.  People who file bankruptcy in California can exempt over 20,000 of property - even money in the bank or cash.  In other words, in Chapter 7 they don't lose this money, and in Chapter 13 their payment isn't a dollar higher on account of having this money.  But we find that most of the time, people only have a few hundred dollars to their name by the time they file because they have been paying creditors long past the time the facts were clear.  They have let their creditors get the best of them and paid long past the time they could truly afford to.

The reason California law allows you to exempt over 20,000 of cash or cash equivalents (assuming you are not exempting home equity) is that people need this money for basic survival - whether it is rent, food, school lunches, doctor copays, or transportation expenses.  Don't let your creditors fool you into spending yourself to the point that you have no available cash - know your bankruptcy options.  When the facts are clear, you are better off filing your bankruptcy sooner.  If you want to know if the facts are clear on your case - in our opinion - contact us for a free consultation by submitting a contact form or calling us at 650.259.9200.  We can show you how to get the most of the exemptions you are legally entitled to and keep the money you need for your basic survival.