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.

It may also be possible to have a portion of a debt balance forgiven or reduce the interest rate on a debt balance. Those who are concerned about their credit may prefer filing for Chapter 13 bankruptcy because it falls off of a credit report in seven years. A Chapter 7 filing will remain on a credit report for up to 10 years.

Filing for bankruptcy may be beneficial for those who are trying to pay off medical or other types of debt. An attorney may be able to explain the potential financial and credit consequences of doing so as well as the process of filing. Typically, an individual must take a credit counseling course and pay a fee as part of the bankruptcy process. In some cases, individuals will be allowed to discharge medical and other debts without giving up property like a car or retirement savings.