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The automatic stay and the benefits of bankruptcy

Do you have a lot of debt? Are you getting calls from debt collectors and creditors at all hours? You know how stressful it can be to feel like you are so far behind that you will never catch up. Overwhelming debt may feel like it's dragging you down, and the pressure from debt collectors is only making it worse.

Thankfully, there are ways out of this situation. For many overwhelmed California consumers, a Chapter 7 bankruptcy filing is a beneficial way to deal with certain types of debt. If you are unsure of whether you could ever get ahead on your own, this could be an appropriate and smart course of action for you as well. One of the many benefits of this process is the fact that filing will enact the automatic stay, which puts a halt to creditor contact.

Has your dead debt come back to haunt you?

You probably never really believed in the zombie apocalypse, but it was fun to watch TV shows depicting what it would be like if the dead walked the earth. Needless to say, it is much less entertaining when old debts come back into your life. When you receive a letter or phone call from a creditor or collector reminding you of a debt from your past, you may wonder how best to react.

What you may not realize is that debt has a statute of limitations. After a certain amount of time has passed, typically four years in California, the debt expires and the creditor forfeits the right to file a lawsuit to claim it. However, that does not stop some creditors or collectors from trying to trick you into resurrecting the debt and forcing you to pay it.

Early wage apps becoming more popular than payday loans

Like many in California, you may get paid twice a month or on two-week cycles. When your check arrives, your first concern may be to pay your rent or mortgage and tackle as many of your bills and loans as you can, leaving a few dollars to carry you through. As time draws closer to payday, your funds may become very low. You cannot even pay your bills, so forget about eating out or seeing a movie with your family.

You may have heard about the latest apps that allow you to access the money you have already earned even if it is not yet payday. These early wage apps are becoming more popular, but can they really be the answer to your money shortage?

Tips for creating a budget when facing significant debt

Some people end up with a significant amount of debt due to a job loss, medical emergency or divorce. For others, the debt creeps up on them before they know it. Regardless of which category you fall under, your debt has become overwhelming, and you need to do something quick.

You may wonder if one of your first efforts should be to cut expenses. This requires creating a budget that you think you can live with. Below are some tips on doing just that.

You may want to reconsider before opting for debt settlement

Knowing that other people also struggle financially may not necessarily bring you any feelings of relief. After all, solidarity does not make your monthly bills any lower or stop creditors from calling. Still, it may help you to know that you do have options available for effectively addressing your outstanding debts.

Though multiple options do exist, it can be difficult to know which debt-relief route is right for you. Already, you may have certain ideas in mind that seem more appealing than others. For instance, you may think that opting for debt settlement would be better for you than filing for bankruptcy because of the negative stigma associated with bankruptcy. However, did you know what debt settlement is not all it is cracked up to be?

Have your financial struggles left you insolvent?

Some California residents' financial affairs are more dire than others. Some people may have a little bit of credit card debt that carries over month to month but that they pay off quickly enough. On the other hand, you may be among the many who wonder whether you will ever get your debt paid off and not just from credit cards.

If your financial situation becomes serious enough, you may become insolvent. You may not fully understand whether insolvency applies to your predicament, but if you are facing a situation in which you can no longer meet your financial obligations to creditors, you have likely already become insolvent.

Millennials reach adulthood with financial burdens

You know that financial advisors recommend actions such as paying yourself first, creating an emergency fund and using cash to keep your spending under control. However, you may find it a challenge to end up with any cash at all after depositing your paycheck and dividing it among your bills and debts.

If this is a fairly accurate description, you are like many California millennials who are struggling with debt. You want to live a comfortable lifestyle, and maybe you are even putting off starting a family until you get your finances in order. However, many adults under age 35 are stuck in a pattern of spending that does not allow much room for getting ahead of their debt.

Do debt collectors have you down? Here's what you need to know

Owing a significant amount of debt can be stressful, and the constant contact from creditors only increases your stress levels. Unfortunately, the calls and letters are one of the consequences of having past-due balances. While your creditors do have the right to seek money from you that you owe, there are limits to what they can do. 

It may be helpful for you to learn about what you can expect from debt collectors. This can help you understand if you are experiencing harassment, and what you can do if their behavior steps over the line. While debt collectors are annoying, you do have the right to take steps to make this contact stop once and for all by filing for bankruptcy. This will also allow you to deal with your debt in an organized manner.

Are you hesitating when it comes to filing for bankruptcy?

Like many people, your financial struggles may have started small. You may have accrued a relatively small amount of credit card debt after making an expensive purchase, but you had the intention of paying it off quickly. Unfortunately, that or another similar scenario may have only sparked the beginning of your financial troubles.

A sudden event, like job loss or a serious medical emergency, may have shattered your financial security. As a result, that small amount of credit card debt may have snowballed into something more unmanageable. Now, you are considering bankruptcy, but you still have some trepidation regarding the possible outcomes.

Bankruptcy: Is it time?

Each month when you sit down to assess your finances, you end up with the same result. It is frustrating to work so hard and still be unable to make your paycheck cover your bills. If you are consistently behind on your credit cards, mortgage, car payment or other debts, you may find it hard to sleep at night and dread answering the phone when it rings.

Most everyone goes through hard financial times now and then. It often doesn't take much to send your budget into disarray, and it may take time and sacrifice to get things back in order. However, do you know when you are in a situation that is futile? If you have ever considered filing for bankruptcy, you may wonder when the time is right.


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