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Law Office of Octavio Velarde focuses on Consumer Bankruptcy in San Diego.

Bankruptcy can feel embarrassing or even frightening at first, but it’s actually a powerful financial tool.

It’s normal to be concerned about loss of assets and potential damage to your financial future.

Filing for bankruptcy doesn’t have to be that way.

Getting your debts discharged is sometimes the most financially responsible step you can take to stop the cycle of bad debt and make a “fresh start.” The goal of a bankruptcy is to stop paying interest and fees to your creditors and instead dedicate your money to taking care of you and your family.

Filing for a Chapter 7 bankruptcy can be a stressful and complex process. We will work with you so that you are informed and understand every step of the process towards your new financial future.

Signs It’s Time for a Bankruptcy

Credit and debt are a normal part of most of our financial lives. Most of us seek credit with every intention of paying it back as soon as possible. But not all debt is created equal and sometimes it can be abusive or even be a scam. Sometimes the unexpected happens and we’ve had to re-prioritize our finances. When faced with such challenges, it can be hard to determine whether a bankruptcy is a good option. Here are some common signs that indicate a bankruptcy might be a good option:


1) You’re accumulating interest and fees faster than you can pay it down.

Unfortunately, there are plenty of unscrupulous businesses that are happy to extend credit that they know you cannot pay back.

Why would anyone issue you credit if you couldn’t pay it back? Because an overdue debt can be more profitable than one paid on time. When you struggle to keep up with debts, you can end up paying extra interest, late charges, fees, and penalties. Over the life of the loan, you can end up paying back much more than you ever borrowed.

You might have this kind of debt if the balance never seems to go down on your account, even if you are keeping up with payments. Some of these debts are designed to make it very difficult to ever pay off and you keep paying interest and fees indefinitely. A bankruptcy can help you cancel these debts so you can get out of the harmful cycle of paying fees and interest on bad loan.


2) You are upside down in your car loan.

Cars are notorious for losing value quickly and as soon as you buy it. That means that people often owe more on the car than the car is worth. A “roll-over” auto loan will only exacerbate the problem. A “roll-over” auto loan is when you still owe money on the car you trade in for another car – the balance of the first loan gets rolled into the new loan so that now you owe much more on your car than it is worth. In a bankruptcy, you can cancel your car loan all together, and buy a car at a price that the car is worth. You can also “redeem” a car loan, which means you pay only the amount that the car is worth.


3) Your wages are being garnished.

A wage garnishment is a very expensive way to pay off a debt. First, a wage garnishment can last up to 20 years. That means for up to 20 years, up to 25% of your income can be taken to pay for your debts. Also, every time your wages are garnished, you are assessed fees by the Sheriff’s Department for taking your money. Also, interest continues to accrue, and you can be liable for attorney fees as well. By the time your garnishment is satisfied, you end up paying much more than you owed to begin with. A bankruptcy can stop your wage garnishment so that you regain control of your check and stop paying fees and interests on an old bad debt.


4) You are paying for your necessities with credit cards.

It’s the end of the month, and after paying the minimums on all of your credit accounts, now you’re short on cash. Now you need to use your credit card or get a loan to pay for things like groceries, gas, or even rent. That means that next month you will have a whole new set of debts to pay off and the cycle continues. Could you pay for your basic necessities if you didn’t have credit cards, loans and other debts to pay first? If you can, then a bankruptcy can help you get your fresh start and start paying for your necessities with the cash you saved instead of always getting more credit.

Do Not Be Intimidated by Bankruptcy – Let’s Make the Decision Together.

A bankruptcy is a powerful financial tool that you have at your disposal. Whether it is time to use that tool can be a tough decision. But you don’t have to make that decision alone.

Everyone’s situation is unique. Call my office at 619-330-6870 for a free consultation. We can discuss your specific circumstances and how a bankruptcy can solve the financial difficulties you are facing.

You don’t have to make this decision alone.


Bankruptcy Myth “I will lose all of my property in a bankruptcy.”

There are protections for your property and assets in a bankruptcy. Every case needs to be individually assessed, but at the very least, you can protect $30,000 in value, and that amount increases every year.


Bankruptcy Myth “I will have to give up the car that I am paying for.”
In a bankruptcy, YOU decide if you want to keep paying for your car and keep it, or if you want to get rid of the car and get rid of the debt. You can choose whichever makes the most financial sense to you.


Bankruptcy Myth “I won’t be able to discharge taxes or student loans in a bankruptcy.”
Certain types or taxes and student loans can be discharged in a bankruptcy.


Bankruptcy Myth “My credit will be ruined for life if I go into bankruptcy.”
A bankruptcy can actually make your credit score go up!


Bankruptcy Myth “I cannot file for bankruptcy because I am not a citizen.”
Your citizenship status will not affect whether you can file for bankruptcy. You can even file for bankruptcy under your Tax Identification Number (ITIN).


Don’t be scared to ask for a consult. It is free and confidential.

Contact the Law Office of Octavio Velarde

Call today.

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You deserve a fresh start.
Let’s move forward together.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.