Bankruptcy Attorney | Avoiding Bankruptcy—How Much Can I Afford?

Bankruptcy Attorney | As the years go by in my bankruptcy practice here in Bakersfield, a mantra I often repeat when asked what causes people to have to file, I say:  “too much house, too much car.”   In other words, the most common mistake people make is to assume too large of a monthly mortgage payment and too much debt tied to monthly car payments.

As to vehicle debt, I have this simple advice, and it’s moderately strict:  a family should at all times have only one car payment, and any other vehicle should be paid off.  As to that one car payment you do make, Mike Sante’s article on car debt offers this perspective:

“The 20/4/10 rule”

It all starts with what we call the 20/4/10 rule, which says you should:

  • Make a down payment of at least 20%.
  • Finance a car for no more than four years.
  • And not let your total monthly vehicle expense, including principal, interest, and insurance, exceed 10% of your gross income.”


It’s not uncommon for me to see clients whose vehicle payments when combined with their house payment, exceed 50% of their take home pay.  Thus, “too much house, too much car.”

Max Gardner represents debtors, creditors, trustees, and creditors’ committees in Chapters 7, 11, 12 and 13. He has extensive bankruptcy litigation experience in trying cases involving discharge ability of debts, preferences, fraudulent conveyances, objections to claims, objections to exemptions, plan confirmation and a variety of other actions obtaining declaratory relief from the Bankruptcy Court. He also practices general debtor/creditor law in Kern County Superior Court. He is a long-time member of the Bankruptcy Dispute Resolution Panel for the United States Bankruptcy Court, Eastern District of California.

There are bankruptcy and non-bankruptcy alternatives. Feel free to contact me for more information office phone: 661-888-4335.