Thomas F. Miles, Attorney and Counselor at Law
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Creative solutions within Chapter 7 bankruptcy

For many in California, the ability to achieve the discharge of a majority of consumer debt is the primary appeal of filing for bankruptcy. A Chapter 7 bankruptcy can lead to the elimination of many forms of debt, and those who emerge from the process can move forward with a fresh financial start. Many who file are happy to turn their financial difficulties over to a legal professional, but some want to take an active approach toward making good on certain debts.

An example may be found in the case of a former developer who is now facing time in federal prison for a mail fraud charge. The man and his wife filed for Chapter 7 bankruptcy, and listed more than $168 million in debts and just $1.4 million in assets as part of their filing. While much of that debt could have been eliminated through the discharge process, the couple chose to take a far more hands-on approach to making good on some of their obligations.

The man claims that he was able to reduce his debt by more than $100 million. Much of that reduction came as the result of returning property to certain secured creditors. In addition, the man has asked for and received a delay in his prison sentence in order to complete several outstanding transactions aimed at further reducing his debt level.

Most California residents will have far simpler Chapter 7 bankruptcy cases than the one noted here. However, this case does serve as an example of the flexibility offered within a personal bankruptcy filing. Filers who sincerely want to reduce their outstanding debt can take a proactive approach to finding a workable solution, even when that debt could be simply discharged through the bankruptcy process. In this way, bankruptcy offers filers a high degree of flexibility as they move toward the elimination of debt.

Source:, Steve Clary Bankruptcy Case Remains Open, Mark Friedman, Nov. 18, 2013

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Thomas F. Miles, Attorney and Counselor at Law
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