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When Should you Consult an Attorney About Your Debt?

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The strain of 2020 has resulted in the loss of unemployment benefits, the loss of jobs, the loss of bonuses, and the loss of businesses. Living on credit day-to-day has now become a reality for millions of Americans. Total consumer debt recently hit just below $4.2 trillion.

Americans are using most if not all of their disposable income to pay on non-mortgage debts like car, truck and boat loans, credit card accounts, and personal loans.

Americans have been amassing large amounts of debt for years. American consumers are borrowing more money more often, enticed by zero or low interest rates on vehicles and the never ending offers from credit card companies. Even though the stock market has been rising to all-time records and there are talks of more stimulus money coming, the fact is that middle class incomes have been stagnant for years. Many people are living paycheck-to-paycheck. The global pandemic has caused job insecurity. Americans are stressed out financially.

Now is a good time to consult an attorney about financial stress and debt management options.

It is better to consult an attorney early and go over your options than to wait until it is too late. Here are some factors that will help you decide if now is the time to start thinking what to do:
  1. Have you been only making minimum monthly payments?
  2. Are you paying high interest rates on your credits cards?
  3. How much do you owe in relation to your monthly income?
  4. Are you behind on your mortgage or rent?
  5. Are any accounts in collection?
  6. Have you been able to save for retirement?
  7. Are you on an installment plan for tax debt?

An early analysis with a debt attorney may get you on the right financial track.

Some options can include making a budget and negotiating settlements with your creditors. At the least you should go over your options. Everyone’s situation is different considering your debts, your interest rates, and your income. Are you are just making minimum monthly payments on high interest credit cards with large balances? Are you not saving for retirement? There are options. One option you may not have considered is using a federal law to get you back on tract. Bankruptcy Chapter 13 is a great type of court enforced payment plan. If you qualify, you can pay what you can and walk away from the balances and the high interest rates.  An added plus is that there is no negotiation with the creditors as compared to debt consolidation plans.

Bankruptcy Chapter 7 is another option for those who qualify and receive an immediate fresh start to get on with their lives.

Your credit score will increase after a bankruptcy filing as you build up your credit again. Also note that you can qualify for a mortgage within twelve months of a bankruptcy. Even if bankruptcy is not an option, you should at least come up with a financial plan to deal with debts and protect as much of your income and assets as you can.  An experienced attorney can evaluate your situation and tailor a strategy to meet your needs. David A. Arietta is a certified specialist and for the last 25 years has been helping consumers deal with debt problems. Let him design a customized debt plan for your situation. Call him at (925) 472-8000.