Companies across San Diego continue to file for Chapter 11 bankruptcy in the midst of the COVID-19 pandemic and for that, they are choosing the best San Diego bankruptcy lawyer. Ann Taylor, Lane Bryant, Brooks Brothers, Neiman Marcus, and other retailers have filed for Chapter 11 bankruptcy. If you are struggling to pay your business debts or your personal debt during this trying time, you are not alone.
Bankruptcy has a stigma, making it difficult for many of us to decide that it is time to file for bankruptcy. If you are wondering when you should file for bankruptcy, BLC Law Center has provided some tips to help you analyze your situation.
Consider Which Types of Bankruptcy Works for Your Situation
If you are considering bankruptcy, the first thing to do is determine whether or not you qualify. There are two main types of bankruptcy — Chapter 7 bankruptcy and Chapter 13 bankruptcy. In a Chapter 7 bankruptcy, the bankruptcy court will cancel most of your debts outright after a three to six-month-long process. In Chapter 13 bankruptcy, you will need to show that you can make monthly payments on your debts over a time span of three to five years.
Make Sure You are Eligible for Bankruptcy
If you make too much money, you may not qualify for Chapter 7 bankruptcy. Instead, you may need to file for Chapter 13 bankruptcy to repay your debts over time. If your income is too low, or your debts are too high, you might not qualify for Chapter 13 bankruptcy. If you are unsure whether you are eligible for bankruptcy at all, then a San Diego bankruptcy lawyer can help you.
Think About What You Would Like to Happen to Your Home And Car
Thinking about what will happen to your home is an important part of filing for bankruptcy. You will still need to pay your mortgage during and after the bankruptcy process, but bankruptcy does make it easier to pay your mortgage because you will not need to get rid of other debts.
Keep in mind that if you file for Chapter 7 bankruptcy, you may lose extensive equity in your home. The amount of equity that you will get to keep depends on several factors. If you file for Chapter 13 bankruptcy, you will be able to pay off the amount of the mortgage that is in arrears via your repayment plan.
Consider How Bankruptcy Will Affect Your Private Life
Finally, we recommend considering how bankruptcy will affect your private life, including the lives of your spouse and children. You will need to disclose all of the details of your finances to the court, and other people might find out about your bankruptcy. You may need to wait three to five years to ask the bankruptcy court to approve certain transactions.