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Debt reorganization in California can include bankruptcy

The rate at which people are obtaining credit cards is increasing, a recent report notes. This means that individuals in California and elsewhere may be beginning to take on more revolving debts, especially as the holiday season approaches. This could lead some to consider a debt reorganization that includes a personal bankruptcy.

A recent report that some in California may find interesting says that new credit cards have increased some 6 percent over the past year. The average consumer now owes some $5,235 on their credit cards. Though this amount is lower than the numbers that were reached during the recession, it remains relatively high.

In some cases, people are unable to repay the debts that they have accumulated on credit cards or through other means. In fact, the number of such people had increased over the past quarter of the year, in part due to the spending related to back to school shopping. This can lead to the desire to consider a debt reorganization. Such a reorganization can take many forms including modifications of loan terms and personal bankruptcy.

Seeking to file a personal bankruptcy as a part of a debt reorganization is a difficult choice for some people in California. However, in many cases it is a good option due to the discharge of unsecured debts that occurs under many of the chapters of the Bankruptcy Code. This allows people to feel financial relief, and, in many cases, they are able to obtain new credit relatively quickly after the process concludes, a positive result for all who seek such an action.

Source: USA Today, Average credit card debt per borrower falls in 3Q, Alexis Veiga, Nov. 20, 2013

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