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.
Insolvency is essentially a term that means that you have reached a point of financial distress. You cannot effectively handle your bills and may have even defaulted on a loan or two. If this happens, creditors could bring insolvency proceedings against you in efforts to obtain the money owed to them. However, it is important to remember that insolvency proceedings and bankruptcy are not the same process. If your total amount of debts, or financial liabilities, is more than your total amount of assets, you are insolvent.
Of course, before your situation reaches the point of insolvency proceedings, you may have the ability to speak with your creditors about creating a payment plan that may help you get back on track. Unfortunately, negotiating for such assistance is not always successful.
Temporary or long term?
In some cases, an individual could become insolvent for a temporary amount of time, but manage to get his or her affairs back on track before the situation becomes too dire. However, if your insolvency lasts long term, you could find yourself facing more and more difficult financial circumstances by the day. As a result, you may find that considering bankruptcy is your best option for potentially getting your affairs back in order.
Should you move forward with bankruptcy?
Bankruptcy certainly has its pros and cons, and only you can decide whether it is an option that suits your circumstances. If you believe that it could help you get a better handle on your current financial struggles, you may find it useful to gain reliable information on the benefits and effects of bankruptcy. Speaking with an attorney experienced in this area of law may prove worthwhile to you as you work to overcome insolvency.