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Is Bankruptcy the Right Choice?

personal bankruptcy.jpgLife happens. Sometimes we get behind in paying a bill or two. No one is perfect 100 percent of the time. All too easily can we fall into the slippery slope of debt, which for many is becoming increasingly difficult to climb out of. When does a minor slip-up cross over into the realm of impossibilities? When is the right time, if ever, to file for bankruptcy? While missing a payment here and there is forgivable, sometimes due to unforeseen circumstances, catching up is just out of reach and bankruptcy is the only option.

The Signs

It is not very likely that you will find anyone eagerly anticipating filing for bankruptcy. Generally, it is due to a loss of a job, a medical emergency, or simply ignoring financial problems until it is too late. If you are considering filing for bankruptcy, one of the best and easiest methods of determining if this is the rich path is to sit down and create a monthly balance of all of the funds coming into the household and all of the monthly expenses. Subtract the total expenses from the total income and that will give you an idea of your disposable income. If that number is at or below zero (or really even coming close to zero) bankruptcy may be the best option for your situation. Other determining factors include:

  • Receiving collection calls at home and/or work;
  • Failing to pay house payments;
  • Lawsuits being filed against you for non-payment;
  • Paying credit card payments using other credit cards;
  • Your car is in danger of being repossessed; or
  • Your wages are being garnished.

These are all extremely serious cases of financial troubles. If you simply ignore the situation, there is a very small chance that these situations will resolve themselves. The best option is to face the problem head-on and explore various options for your financial future.

The Options

There are four major bankruptcy cases that are provided under state and federal laws. The first two are not used as much as the second two, however they are still viable options for certain situations.

  • Chapter 11: This is used for businesses and individuals with unusually high debt. It is considered to be more of a reorganization than starting over;
  • Chapter 12: Reserved for family farmers;
  • Chapter 7: This is commonly used because it offers debtors a fresh start. In short, items can be sold to repay debt, but most debt it written off without repayment; and
  • Chapter 13: Used often due to the fees can be paid off over time. It is more of a debt adjustment, in which debtors will still make payments, but the payment terms will be revised.

If you are having difficulty making "ends meet" and are contemplating filing for bankruptcy, it is often beneficial to have an attorney on your side. With the right legal counsel, you can have a guide through this often stressful process. If you need a compassionate attorney who can advise you and walk you through your situation, we are here to help. If you would like compassionate San Jose bankruptcy attorney, please do not hesitate to call Diemer, Whitman & Cardosi, LLP today at 408-971-6270.




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  • Santa Clara County Bar Association | 1917
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