Thomas F. Miles, Attorney and Counselor at Law
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January 2015 Archives

Lawmakers push to include student loan debt in Chapter 7

Anyone who has emerged from college only to be confronted by a mountain of debt understands how difficult it can be to establish a career and begin to pay down student loans. For some, these first few years require a degree of hardship, but the end result is a well-paying position in the field of their choice. For others in California, the path is not so smooth, and debt continues to accrue in the form of credit cards and loans. At some point, many will consider whether Chapter 7 bankruptcy is the best course of action.

Personal bankruptcy considerations and 404(k) funds

California consumers who are struggling to obtain a loan may be tempted to borrow funds from their 401(k) retirement plan. While this may appear to be the perfect solution, it may need careful consideration as there are many disadvantages attached. The credit scores of consumers who consider digging into their retirement funds may be too low to allow them to qualify for a mortgage or loan. This may be an indication the they are already experiencing financial difficulty, and it may be wise to work on regaining financial stability. In some circumstances, filing for personal bankruptcy may be an appropriate solution.

A brief overview of Chapter 7 bankruptcy

For many in California, financial strain has reached the point where filing for bankruptcy is the best possible solution. There are several choices when preparing to file, but Chapter 7 is the option that most people consider, because it is the type of filing that leads to the elimination of many forms of unsecured debt. The following information is given to give readers a very basic overview of the Chapter 7 bankruptcy process.

Overextended credit leads to need for debt reorganization

It is very easy to allow one's finances to get out of control. In fact, may in California do not even realize the full extent of their financial troubles until a pivotal point is reached, such as the denial of a new line of credit or the need to access a non-existent emergency fund. Many consumers find themselves with overextended credit, and have little idea how things got to that point. For many, the solution to this problem lies in debt reorganization.

Is credit repair possible after personal bankruptcy?

Once a California resident has made the decision to file for bankruptcy, a mix of relief and concern often follows. Consumers are relieved in the knowledge that their debt problems are going to be eased once the process is complete. However, many are also worried about the impact that personal bankruptcy will have on their credit scores. It is important to understand that, while bankruptcy will have an impact on credit scoring, it is possible to rebuild credit in a relatively short period of time.


Thomas F. Miles, Attorney and Counselor at Law
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