Legal Question in Bankruptcy in California
consolidation to bankruptcy
Is it possible to file for bankruptcy if you are already consolidating your debt. I have a friend that has a company consolidating her debt but she can't make the monthly payments anymore. She is thinking about filing for bankruptcy. Is she still capable of doing this? Will she have to include the law office that is doing her consolidation?
1 Answer from Attorneys
Re: consolidation to bankruptcy
Yes, she can still file and she will have to include as both a creditor, and potentially an asset, what she has paid to the law firm doing her consolidation. Many of those firms take payments, but hold them and do not actually make payments to her creditors until the debts are charged off. There may be a significant amount of money theoretically "in trust" with this attorney that may still belong to her.
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