Thomas F. Miles, Attorney and Counselor at Law
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San Diego California Bankruptcy Law Blog

How does Chapter 7 differ from Chapter 13 bankruptcy?

As a previous post highlighted, filing for a Chapter 7 bankruptcy can help a debtor obtain a fresh financial start. California residents struggling with financial problems probably understand that there are mechanisms that could help with their debt situation. However, not everyone explores how the bankruptcy process could assist him or her. The term bankruptcy is a tough one to include in one's vocabulary, but even if Chapter 7 is not right for one person, there are other bankruptcy and debt relief options. One of these options is to file for a Chapter 13 bankruptcy.

How does Chapter 7 differ from Chapter 13 bankruptcy? Bankruptcy, in general, is a legitimate legal process used by individuals and businesses dealing with financial problems. The bankruptcy process is initiated to erase debts or work through a repayment plan debts so that an individual or business can stay afloat. The bankruptcy process is also a mechanism used to stop the harassment of creditors, stop wage garnishment, and even halt the repossession and foreclosure processes.

How often should you update your will?

Once you create a will or any other end-of-life document, you may think you are set until your passing. However, your circumstances and wishes often change over the years, and your will needs to reflect your current situation.

Every couple of years, you should review your will to ensure it is still applicable. You should also update it whenever you experience life changes in any of these areas.

Understanding life after a Chapter 7 bankruptcy filing

There are many challenging decisions in life such as whether to go to college, move for a job, have children, or retire. These decisions can be life-altering and forever change your financial future. When debt takes over, life can become overwhelming and even worrisome. You may not know what to do or if things can ever return to normal. Even if it seems like a drastic and desperate move, filing for bankruptcy is not only a reliable option, it is also often the best step to take in order to obtain a fresh financial start.

Many individuals facing overwhelming debt question what the process entails. They also wonder how the process will impact them overall and how soon they can have their finances back in order. For those filing for a Chapter 7 bankruptcy, it is common to be concerned about what the future will look like when the process is complete.

CA firm providing competent Chapter 7 bankruptcy representation

Dealing with debt can be a difficult and emotional for many individuals in California. Although many debt issues can be overcome, some individuals are so overwhelmed that they find that they cannot to do so on their own. Thus, seeking guidance about debt relief options is often a necessary step. While filing for bankruptcy can seem like a negative or daunting task, it is frequently used to give individuals and families a fresh financial start.

At Thomas F Miles, Attorney and Counselor at Law, our experienced legal team understands the tough predicament debt can cause. Whether it is due to medical debt, credit card debt, unemployment, or other unexpected life events, our law firm can help debtors in a wide variety of financial situations understand their options.

What you need to know when considering a living trust, part 2

Last week, we discussed some of the reasoning behind setting up a living trust and the basics of a living trust. While it is beneficial to have a living trust to avoid probate, it is also worth discussing that a living trust does come with its set of small inconveniences.

Since you are not going through the courts, there are no court costs associated with a living trust, although you may have to pay a filing fee. Costs vary per state, and may even vary depending upon the size of the state. This is true here in California. The trustee is also entitled to compensation for administration of the trust, which would be deducted from the fund, though these costs can be waived at the trustee's discretion.

What you need to know when considering a living trust, part 1

As we discussed last week, a trust is set up so that a trustee can properly allocate assets or property to a beneficiary, or the person receiving the assets or property. Traditional trusts are written while the trustor, or grantor, the person giving away the assets or property, is living and the assets or property is to be given out upon the trustor's death. One could also consider creating a living trust, often referred to as an "inter vivos" trust, since it is implemented while the trustor is still alive.

A living trust is created while a trustor is alive, and can be changed or retracted at any time. This is also called a revocable trust. One of the benefits of creating a living trust is that you can avoid your estate going to probate. Probate is the court going through and paying debts and administering property following one's death. It is not uncommon for this process to take months.

What are trusts?

There are many things to consider when working on your estate planning. One option that many people consider is the establishment of a trust. A trust is created to help manage one's property and finances by making certain that it gets properly transferred to the people mentioned in the trust. Before we elaborate, there are a few terms that should be defined to make things easier.

A trustor, also known as a grantor or settlor, is essentially the owner of the property. A trustee is an institution or person who will manage the property contained within the trust. The trustee is typically a professional who will receive compensation for allocating the contents of the trust. The trustee also has a duty to act in the best interests of the person who is receiving the property or financial benefits, known as the beneficiary. This is called a fiduciary relationship. If a trustee fails to fulfill their duty, they may be liable for damages to the beneficiary.

When is a good time to start estate planning?

Whatever age you are, it is likely a good time to start estate planning if you have not already. For example, suppose you are 30 years old, married and have one child. You may not yet have significant assets, but you do have that spouse and child. What happens to the child if both parents die? Estate planning helps you answer that difficult question and many others.

So, the reply to, “When is a good time to start estate planning?” could very well be, “Right now.” Below are examples of other scenarios in which it is all but imperative that you take a little time for estate planning.

Facing foreclosure? Consider all your options

Sometimes Americans just run into bad luck. Even people who make every effort to handle their finances responsibly on occasion find themselves over their head. Maybe it was bad investments, maybe you lost your job and have been struggling to find more work or maybe it was a catastrophic illness or injury that put you in substantial debt.

Regardless of your situation, you can, at the very least, rest assured that you are not alone with your financial struggles and, despite constant bills and phone calls and threats that may be coming your way, there are options available to help get you out of your financial woes.

Who should consider Chapter 13 bankruptcy?

If you are in debt, it is important to weigh all your possible options before making a decision on how to best tackle your plight. For some people, even the word bankruptcy can sound scary and intimidating. But the reality is that bankruptcy is designed to help people get out of debt so that over time they will have a fresh start. One possible consideration is Chapter 13 bankruptcy, though it is important to understand that one must qualify and meet certain conditions to be eligible. Over the next two weeks we will discuss all the necessary requirements one needs to qualify for Chapter 13 bankruptcy.


Thomas F. Miles, Attorney and Counselor at Law
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El Cajon, CA 92020

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