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Can Chapter 13 bankruptcy help you handle your student loans?

For most people in California, earning a college degree is the first step on the path to a successful and rewarding career. Unfortunately for many, it is also the first step towards overwhelming debt. Although student loans usually cannot be discharged in Chapter 13 bankruptcy, the process can still provide vital debt relief that allows borrowers to better focus on their loan repayments.

Across the United States, approximately 44 million student loan borrowers owe a collective $1.5 trillion. While that figure alone is upsetting enough, the outlook is fairly grim for nearly half of those borrowers. In addition to the 250,000 borrowers who currently default every quarter, experts predict that 40 percent of student loan borrowers will default on their loans by the year 2023.

2 dead in multi motor vehicle accident

A multi-vehicle wreck left two people dead, and one other person suffered minor injuries. California police are still investigating the motor vehicle accident, but currently believe that it was caused by a tour bus. There were no passengers on the bus at the time of the wreck.

Police say the driver of the tour bus was heading northbound on Highway 880, traveling at speeds of upwards of 65 mph. For reasons that are still not clear, the bus rear-ended a smaller passenger vehicle with such force that it was briefly pushed on top of the rear of the small car. The passenger car was then pushed out of the immediate path of the wreck.

Chapter 7 bankruptcy is easier than donating a kidney

When debt reaches a certain point, it can become an all-consuming concern, penetrating every aspect of a person's life. This can make some people in California feel desperate and willing to try virtually anything to free themselves from past-due notices and harassing creditors. However, consumers have options that do not require drastic measures. Chapter 7 bankruptcy is often quite effective at discharging debt.

The growing level of consumer credit card debt is currently over $1 trillion and is understandably worrying to many people. More than 1,000 American consumers with $500 or more in credit card debts recently participated in a survey, and gave some pretty revealing answers. More than three-quarters of survey respondents said they carry a balance on their credit card from one month over into the next, and 10 percent reported that they felt they would never pay back their debt.

Bus apparently sparks chain of motor vehicle accidents

California police are still investigating an accident that sent 25 people to the hospital and blocked traffic for a period of time. Over 40 victims were initially evaluated by emergency responders, many of whom had been passengers on a bus. Motor vehicle accidents involving large trucks or buses tend to be severe, and at least five of those injured in this wreck were listed in serious condition. 

Although the factors leading up the accident are still not clear, reports indicate that the chain reaction of collisions started when a private bus hit several other vehicles. After causing a series of collisions in the northbound lanes of the 405 Freeway, the driver of the bus apparently lost control of the vehicle crashed through the center concrete divider. From there it crossed into oncoming traffic, striking other cars until it finally came to a rest. 

The automatic stay: Can it save you?

There are countless worries that come along with excessive and unrelenting debt. Being in debt can put extreme amounts of stress on a family and you may feel like there is nothing that can save you. Fortunately, filing for bankruptcy is a solution that can help you in more than a few ways.

It may seem intimidating and like a poor option, but filing bankruptcy can help your family get out of the hole you are in and start fresh. One of the main benefits of filing bankruptcy is that an automatic stay kicks in. This is a benefit that can save many people from the harsh consequences of debt.

Chapter 11 bankruptcy filing made by Mattress Firm

Since 2017, over two dozen U.S. retailers have filed bankruptcy. Now, Mattress Firm joins their ranks. The brick-and-mortar mattress retailer is pursuing Chapter 11 bankruptcy and plans to close hundreds of stores across the nation, and some California locations are likely to be affected. 

Mattress Firm's stores are relatively cheap to run, so the company ended up expanding to its current size of approximately 3,500 stores nationwide. However, buying a new mattress in a physical store is not as lucrative as it once was. Competing online brands can operate with even lower overhead, and consumers are apparently more drawn toward online shopping. The store also lost business when Tempy Sealy International -- its preferred mattress brand -- pulled all of its products over a dispute around pricing. 

Even with insurance, medical debt can cause Chapter 7 bankruptcy

Maintaining health insurance coverage is important for covering the high costs associated with seeking medical treatment. Unfortunately, insurance does not cover everything, and in many instances it may cover even less than what most people in California expect. This is why even those who have health insurance sometimes still turn to Chapter 7 bankruptcy to handle overwhelming medical debts. 

A survey by Consumer Reports found that over 25 percent of U.S. patients who have health insurance have been hit with surprise medical bills. The costs are often staggeringly high, too. In 2016, a 59-year-old man spent 10 days in the hospital to receive care for his heart condition. His medical bills topped out at around $130,000, and his insurance only paid about $54,000. He was ultimately turned over to collections after being unable to come up with the other $76,000. 

Motor vehicle accidents: Toddler survives fatal wreck

Two adults were killed and a young child was seriously injured in a fatal, head-on collision. Police are still investigating the accident, and it is possible that the driver believed responsible might have been under the influence of alcohol, drugs or both at the time of the wreck. Aside from the child, the allegedly negligent driver was the only other person who survived the collision. Unfortunately, this is not necessarily uncommon for these types of motor vehicle accidents.

At the time of the wreck, a man and woman in an SUV were traveling in the eastbound lane of a California road. A 1-year-old toddler was secured in a safety seat in the same vehicle, although the adult passengers may not have been wearing their seatbelts. At some point, another driver veered out of his lane and into oncoming traffic, directly into the path of the SUV. 

Will millennials need to turn to Chapter 7 bankruptcy?

Unlike in decades past, young adults now typically carry significant amounts of debt. Millennials in particular seem to be struggling under these massive debt loads. Although California millennials may actually fare slightly better than elsewhere in the nation, some may still benefit from debt relief through Chapter 7 bankruptcy. 

The average debt for a millennial living in one of the U.S.'s 50 largest cities comes out to an estimated $23,064. Although this accounts for all different kinds of debt, student loans, vehicle loans and credit card balances accounted for most of the accumulated debt. Student loans make up the largest chunk, though, accounting for 40 percent of millennial loan and credit balances. Nationwide, 44 million people owe $1.5 trillion for their student loans. 

Rebuilding credit after a bankruptcy filing

Too many misconceptions exist regarding life during and after a bankruptcy filing. Deciding to file for Chapter 7 or Chapter 13 bankruptcy is not the end of your financial health and wellness. On the contrary, bankruptcy and debt reorganization can be the most productive financial decision for many struggling with repayment of past debts.

One key concern many hold about filing for bankruptcy is that is does permanent damage to a credit score. If a person fears they can never recover from a past financial challenge, it makes it unlikely that they will consider all their options for getting out from under an intense debt accrual.


Farhat Law Firm, APC
232 E. Grand Boulevard
Suite 202
Corona, CA 92879

Toll Free: 800-391-9168
Fax: 951-900-6008
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