Redwood City California Bankruptcy Law Blog

According to a survey from The Ascent, 10% of respondents said that they had six or more credit cards. While having multiple credit cards can pose problems for California residents, there can also be benefits to having multiple cards. One of the key benefits is the ability to quickly raise a credit score as an individual will make multiple payments over a short period of time.

The more cards that a person has, the more credit that an individual has to use. Ideally, a person will use no more than 30% of a given credit line and no more than 30% of the total credit line across all open accounts. Having multiple cards can make it easier to handle a financial emergency even when an individual doesn't have any money in the bank. A final benefit is the ability to get more cash back or rack up other rewards faster.

Student loan debt is increasingly driving people in California to file for bankruptcy. According to a study conducted by LendEDU, 32 percent of people who file for bankruptcy under Chapter 7 have student loan debt. Among those who file for Chapter 7 bankruptcy and carry student loan debt, that debt made up, on average, 49 percent of their total outstanding debt. LendEDU examined 1,083 bankruptcy cases in the study.

Generally speaking, student loan debts are not dischargeable in bankruptcy, but filing for Chapter 7 protection can get rid of other debts so people have money to make student loan payments. College tuition has more than doubled since the 80s, according to Business Insider, and Millennials have more than 300 percent more student debt than their parents had. On average, Baby Boomers had to work 306 minimum wage hours to pay off a four-year college education; Millennials have to work 4,459 hours.

Most of the people in California and around the country who file personal bankruptcies each year do so because of medical debt, and many of them found themselves overwhelmed by bills despite having health insurance. Common reasons for hospital and doctor bills not being covered include getting treatment from out-of-network providers and visiting a specialist without first getting a referral from an in-network physician. Health insurance companies usually have fierce cost-control measures in place, and they often look for ways to deny claims.

Inflated or inaccurate health care bills are another common cause of soaring medical debt. Diagnostic codes and other medical jargon can make these documents difficult to understand for consumers, but health insurance companies have experts to pore over them and identify overcharging and treatment that was not actually provided. Patients can file appeals when their claims are denied, but the process is complex and offers no guarantee of a successful outcome.

California residents and others who are diagnosed with cancer may incur significant debt in an effort to overcome their illnesses. However, it may be possible to reduce or eliminate that debt by declaring bankruptcy. Furthermore, individuals may get relief from creditor phone calls, letters and other collection activities when they file. This ban on collection activities may provide emotional relief on top of the financial relief that may be available.

Debt relief through bankruptcy might occur quickly by filing for Chapter 7 protection. In a Chapter 7 case, many different types of debts can be eliminated without necessarily having to give anything to creditors. Although it is referred to as a liquidation bankruptcy, it may be possible to keep most property. A Chapter 13 cases allows a person to reorganize debt and pay it off over a period of three or five years.