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How will filing bankruptcy affect my moral character application and being sworn to CA Bar?

Brooksville, FL |

I am an on line law student residing in FL but will sit for the CA Bar in Feb 2015 . My former residence is in foreclosure proceedings and is upside down for approximately 70K to 90K , as we owe $ 120k and the home's value is $ 56k . In addition , I lost my 16 yrs employment back in 2010 , cashed out my 401k to settle as much credit card debt as I could . I managed to settle with all creditors but one , who was not willing to work with me and who placed a judgment against me for 18k . I attempted to find employment but it took me a year and a half . I finally settled for a job making less than half the hourly rate as my prior employment . Should I drop out of law school now ? Should I file bankruptcy or deal with the foreclosure and most likely a deficiency judgment thereafter ?

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Attorney answers 3


I typically advise people to pass the bar and be admitted before filing bankruptcy because then you are not required to disclose the bankruptcy to the bar. However, if you have no choice, while you must disclose the bankruptcy to the bar, it is unlikely that this will stop you from being admitted. To help you to see your situation more clearly, I would recommend participating in pre-bankruptcy credit counseling to give you an objective look at your financial situation. Hope this perspective helps!


While it won't help you, it may help others reading this - cashing out a 401(k) is the worst thing to do before bankruptcy. It is 100% exempt (up to one million plus), and certainly would make a fresh start better. Your bankruptcy should not be a barrier to bar admittance, unless you ran up your debt just before filing.


You wrote, "How will filing bankruptcy affect my moral character application ... [I] will sit for the CA Bar in Feb 2015 ."

I cannot perceive how the lawful exercise of your rights under Federal law would taint your moral character for a State license.

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