As 2026 begins, many individuals and small businesses across San Mateo, Redwood City, Palo Alto, and the greater Bay Area are navigating higher living costs, rising interest rates, and ongoing financial pressure. Understanding your bankruptcy options can help you regain stability and protect your long‑term financial future.

1. Assess Your Debt Situation Early

Before filing bankruptcy, take time to review your financial picture. Separate secured debts (mortgage, auto loans) from unsecured debts (credit cards, medical bills). This early evaluation helps determine whether Chapter 7 or Chapter 13 bankruptcy may be the right path for you under California law.

2. Document All Debt Collection Activity

If you’re receiving frequent or aggressive collection calls, keep detailed records. California and federal laws strictly regulate collector behavior, and proper documentation can provide valuable protection during your bankruptcy case.

3. Use California’s Generous Bankruptcy Exemptions

California offers two exemption systems that may help you protect your home, car, personal property, wages, and retirement accounts. For San Mateo homeowners facing high property values, choosing the right exemption system is critical. A local bankruptcy attorney can help you understand which option protects your assets best.

4. Avoid Major Transactions Before Filing

Large purchases, cash transfers, or shifting assets to friends or family members could complicate your bankruptcy case. If you believe you may file in 2026, avoid making any major financial moves without professional guidance.

5. Know the Impact on Your Credit—and Your Recovery Options

Bankruptcy does affect your credit, but many Bay Area residents begin rebuilding credit scores within a year of receiving a discharge. Responsible post‑bankruptcy behavior, including timely payments, can help you recover faster than you may expect.

6. Work With a Local San Mateo Bankruptcy Attorney

Bankruptcy rules vary from state to state, and California’s exemption system is unique. Working with an attorney familiar with the San Mateo Division of the Northern District of California Bankruptcy Court ensures your filing is accurate, timely, and strategically sound.

7. Stay Informed About 2026 Economic Trends

California’s evolving economic climate—rising housing costs, fluctuating interest rates, and changing federal guidelines—will affect bankruptcy planning this year. Staying informed and seeking expert advice can help you make decisions that support long‑term financial recovery.

Looking Ahead

Bankruptcy is not a failure—it’s a legal tool designed to give people a fresh start. Many San Mateo and Bay Area residents use it each year to rebuild their financial stability. With the right strategy and local legal guidance, 2026 can be the year you regain control of your finances.

EH Law Group is here to support individuals and small businesses throughout San Mateo County with compassionate, knowledgeable bankruptcy guidance. Contact us today to explore your options and take the first step toward a fresh financial start.