Filing for Bankruptcy to Save Your Assets: Waiting Could Hurt You - Westgate Law

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Filing for Bankruptcy to Save Your Assets: Waiting Could Hurt You

One of the most frequent mistakes made by bankruptcy filers is that they wait too long to file. It’s natural to feel a reluctance to start the bankruptcy process. Considering filing for bankruptcy and actually filing are two very different things, but don’t allow yourself to get stuck in the considering phase too long. During the “considering” phase most don’t notice when they morph from considering to delaying. People in serious financial trouble often attempt to avoid bankruptcy.

Many try to avoid it by:

  1. Getting home equity loans: This can be very dangerous. If you don’t find a solution to your financial problems, the increased amount of debt secured by your home will not be helpful. You will be less able to make your payments than before. It also makes the loss of your home more likely as it is now listed as security for a substantial amount of your debt.
  2. Withdrawing retirement funds: Funds that are in retirement plans are usually protected from the bankruptcy process. They can’t be accessed by the bankruptcy trustee to be used to satisfy creditors (in most cases). Removing money from retirement funds/plans means you have made protected money available to the trustee and therefore your creditors in the event that you do end up filing for bankruptcy.
  3. Continue struggling to pay on debts that there is no hope of paying off: Does it sound sensible to spend your very last available dollars paying towards debt that is hopeless to pay off? Many leave themselves with nothing to help them start fresh post-bankruptcy.

It’s important to determine whether you are actually still in the considering bankruptcy phase or if you have moved on to simply delaying your bankruptcy. For the reasons discussed above, there’s really no benefit in delaying unnecessarily. Explore your options, consider them…and then act on what is best for you and your family. It could be that it’s in your best interests to file for bankruptcy to save your assets.

To discuss your options and your personal financial situation, contact the California bankruptcy experts at Westgate Law today.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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