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6 Facts About Filing for Personal Bankruptcy from a Philadelphia Bankruptcy Attorney

You may be facing financial difficulty that seems like you can’t escape. You’re looking for options and came across the possibility of bankruptcy. But there are several types, which makes it difficult to understand which kind, if any, might be right for you. That’s exactly why many people come to our firm and ask: What is personal bankruptcy, and is it an option for me? At Bankruptcy Done Right, we’re committed to helping people make the right choices about their financial future, which means providing the information and guidance they need. So, if you’re in a similar situation, below are six facts by a bankruptcy lawyer in Philadelphia. Fact 1: Bankruptcy eligibility is pretty broad. Are you even eligible to file for bankruptcy? While there is no standard eligibility rule to file for bankruptcy, there is probably one certain type of bankruptcy you’re eligible for (or one that makes the most sense for your situation). That’s one of the areas on which Bankruptcy Done Right can advise you. We’ll review your debts, income, goals, and more, and then we will advise you on the type of bankruptcy that will benefit you the most. There are a few requirements when you […]

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Student Loan Bankruptcy Gap: New paper aims to bust ‘the myth that student loans are not dischargeable’

Recent court rulings prove that student debt can be erased in personal bankruptcy. But most borrowers aren’t aware of that fact, and lenders routinely exploit that ignorance. “About half of all bankrupt student loan debtors would obtain relief if they took the appropriate legal steps,” Jason Iuliano, an expert on student loan debt and bankruptcy, asserted in an upcoming article in the Duke Law Journal. “Unfortunately, because nearly everyone has bought into the myth that student loans are not dischargeable, most debtors do not take those steps.” The general acceptance of that myth created the Student Loan Bankruptcy Gap, which is “an unprecedented situation in the law,” according to the paper. “Nowhere else have so many people sought legal relief while so few have obtained it.” The Student Loan Bankruptcy Gap has persisted for decades, according to Iuliano, due to creditor manipulation: Lenders preemptively settle cases that would form the basis for broader student debt cancellation through bankruptcy. Based on an analysis of student loan bankruptcy proceedings, Iuliano found that lenders actively “stack the set of cases that go to trial in their favor” to make the process more difficult for student loan borrowers seeking relief during the personal bankruptcy […]

Personal bankruptcies expected to rise in 2021 as stimulus ends

As stimulus checks and other forms of temporary relief run out, experts are projecting an increase in personal bankruptcy filings, which have so far been muted during the coronavirus pandemic. Only a new stimulus program targeting individuals or government actions forgiving or deferring student loans can keep individual filings from rising, panelists said Tuesday at an American Bankruptcy Institute conference that took place online. The $2.2 trillion Cares Act that Congress passed in March broadened jobless benefits, extended their duration and boosted the amount by $600 a week—but those extra payments have expired. Congressional Democrats and the White House continue to negotiate another economic-relief package, which could restore some of the jobless benefits that have lapsed, though prospects have dimmed for a deal before the election. “It’s clear that when it comes to bankruptcy filings by individuals, it’s all about access to liquidity,” said Ed Flynn, an editor at the American Bankruptcy Institute Journal. “With the end of the Cares Act, there will be an uptick in filings. The only question is whether it will be a sharp uptick or a gradual one.” Personal bankruptcies are projected to fall this year to 560,000, the lowest number since 1985, said Mr. Flynn, citing data […]

Bankruptcy Facts

What is bankruptcy? Bankruptcy is a legal process in the United States that allows people and companies to totally erase or reduce their debt, depending on the type of bankruptcy. There are two main types of bankruptcy for consumers: Chapter 7 bankruptcy and Chapter 13 bankruptcy. The main type of bankruptcy for businesses is Chapter 11 bankruptcy. The bankruptcy code is federal law. Each year, personal bankruptcy laws help hundreds of thousands of Americans get a fresh start.   Who usually files bankruptcy? People usually file bankruptcy when they have more debt than they’ll ever be able to pay back. Most people file bankruptcy after losing a job, a medical illness, a divorce, or a small business failure. Many people decide to file after experiencing wage garnishment, a debt collection lawsuit, a repossession, or a foreclosure. In the coming months, many people will use the safety net of bankruptcy to recover from the loss of their regular income due to COVID-19, especially if they’re dealing with high credit card interests rates.   What debt does bankruptcy erase? Chapter 7 bankruptcy can help totally erase the following common debts: Credit card debt Medical bills Utility bills Car loans Personal loans and […]