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? The bankruptcy lawyers at Bankruptcy Done Right, are 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. 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 […]
Analyzing the Impact of Bankruptcy on Custody and Child Support
Divorce and bankruptcy are two intertwined processes, and filing for bankruptcy may impact on family law matters such as child custody, child support and spousal support. When either spouse files for bankruptcy, questions come up about financial obligations including alimony and child support. For instance, does a bankruptcy declaration affect child custody rights? Does it take away my child support obligation? What are the differences between the effects of chapter 7 and 13 bankruptcies? Below is an in-depth answer to these crucial questions. Child Custody Post a Bankruptcy Declaration A child custody arrangement by a court is premised on several grounds. Such grounds include personal preferences of the child, safety, quality of life for the child, and criminal record of parents. The parent who is in a better place to nature and provide a good quality of life for the child is granted custody. Filing for chapter 7 or 13 bankruptcy does not affect that custody arrangement. The arrangement continues as it was before the bankruptcy. Modifying the arrangement needs a separate suit to the court that made the custody determination. The spouse wishing to change custody must prove that the bankruptcy interferes with your ability to provide good quality […]
Can You File Bankruptcy on Back Taxes in Pennsylvania?
It is a myth that bankruptcy is a personal failure. Rather, it is a step in the right direction. In filing for bankruptcy, you take back control of your finances. You end the harassing phone calls and collection letters, and give your family a fresh start. Many people who consider bankruptcy owe state or federal taxes. Can these tax debts be discharged through Chapter 7 bankruptcy? What tax debts can be eliminated in bankruptcy? First, let’s start with the taxes that cannot be discharged: property taxes and trust fund taxes. Under certain circumstances, you may be able to set up a payment plan, but you will always owe these debts. Under strict circumstances, you may be able to discharge federal income taxes. Federal Income Tax Debts and Bankruptcy If you owe federal back taxes, you’re not alone. At the end of 2020, 11.23 million Americans owed the IRS more than $125 billion. If you qualify for Chapter 7 bankruptcy, you may be able to discharge your federal income tax debt if you meet the following criteria: You didn’t do anything illegal or fraudulent with your taxes, like file under a fake social security number. The tax debt must be at least three years old. […]
When is the Best Time to File for Bankruptcy?
Are you drowning in debt? If so, consider that many people have received a fresh financial start by filing for bankruptcy. Once your finances are stabilized, you can begin rebuilding good credit. But when should you file for bankruptcy? Six reasons it my be a good time to file for bankruptcy Here are six reasons for when it’s a good time to file for bankruptcy as well as when it’s best to delay filing, along with how a good bankruptcy attorney can help you decide if you should file. 1. AN INABILITY TO PAY OFF YOUR BILLS One of the main reasons people file for bankruptcy is because they can’t pay off their debts. Consider how a major illness or medical procedure can lead to a considerable amount of expense. What’s more, you may run out of options for paying back your debts. Thus, when all else has failed, filing for bankruptcy can be a good solution. 2. AN UNEXPECTED CRISIS CAUSING SEVERE FINANCIAL PROBLEMS Having a sudden, unanticipated and devastating event, such as an illness, accident or death of a breadwinner can easily cause financial distress. When this happens, bankruptcy may be your only option for getting back on […]
Bankruptcy: How to Avoid Foreclosure on Second Mortgages
Bankruptcy: Second Mortgages and Liens in Bankruptcy There are several reasons why you may need to obtain a second mortgage on your house. Maybe you need to renovate it, pay college tuition fees for your kids, or simply pay for something you need. Whatever the reason, you can use the equity in your home to get a second mortgage. Having equity simply means that your home is worth more than what you owe. Second mortgages are great, as long as you can pay them on time. Defaulting payment can result in foreclosure on your property by your lender, which is a serious problem. If you, unfortunately, end up in this situation, you have the option of filing for bankruptcy. In this article, we will take you through your options when it comes to filing for bankruptcy. We will discuss the two chapters of bankruptcy (Chapter 7 and Chapter 13) in detail to help you decide which chapter would be helpful. Note that choosing to file for bankruptcy under these two chapters is highly dependent on the facts of your case, income, and assets. Can you file bankruptcy on a second mortgage? If you cannot make payments on a second mortgage, […]
How Can I Stop My Wages From Being Garnished in 2021?
Back taxes and child support account for most of the wage garnishments. Bankruptcy is the best way, and usually the only way, to stop wage garnishment. Your options are outlined below. These options are no longer a last resort, because courts and bureaucrats have given creditors more and more power in this area. So, it’s not surprising that wage garnishment has increased as much as 300 percent in some regions since 2009. A civil judge technically has the power to stop unfair or fraudulent garnishment. But a bankruptcy lawyer can stop wage garnishment regardless of the facts. Furthermore, an attorney can address the obligations which led to the wage garnishment order, either in bankruptcy or outside bankruptcy. Bankruptcy and the Automatic Stay Wage garnishment is just one of the adverse creditor actions that bankruptcy halts as soon as debtors file their voluntary petitions. Other examples include: Foreclosure, Creditor lawsuits, Repossession, Creditor lawsuits, and Eviction. In general, a bankruptcy lawyer can easily prevent these things from happening. Proper notice is usually key. If wage garnishment is an issue, both the garnishor (person or entity garnishing wages) and the garnishee (which is the payroll company in this case) must receive notice. However, […]
DIY Bankruptcy is Not a Good Idea: Here’s Why
The internet age has made many things DIY-friendly, with videos, instructions, and charts making it easier than ever before for you to learn how to change a tire or make bread from scratch. However, just because the internet makes it possible for you to do almost anything on your own, this does not necessarily mean that you should. In fact, certain things are best handled by trained, experienced professionals, such as filing for bankruptcy. The fact is that filing for bankruptcy is an extremely stressful situation to find yourself in, and you do not want to make this time more difficult for yourself by trying to go through the bankruptcy process alone. While some people may choose to forgo hiring an attorney in order to save money (this is known as filing Pro Se), this is a critical mistake, as an attorney can be invaluable in guiding you through this complex and confusing process. What many Pro Se filers do not realize is that DIY bankruptcies are risky, as you may find yourself making costly errors if you try to go through this process alone. For instance, in California’s Central district, over a quarter of bankruptcies are filed Pro Se […]
Can I Buy a Car If I File Bankruptcy?
The average automobile only lasts about eight years. Therefore, most people need to buy a car immediately before, during, or shortly after bankruptcy. All three of these things are possible, as outlined below. It is a fact of life that people with poor credit have fewer options in this area. Selection is limited. Financing is more difficult to obtain, and more expensive as well. However, if you are willing to accept these conditions, buying a car is usually not a problem, bankruptcy or not. Bankruptcy, especially Chapter 13 bankruptcy, usually improves your car-buying prospects. The monthly debt consolidation payment forces families to run tighter ships financially. The additional fiscal discipline helps them show lenders that they have turned over a new leaf. Outside bankruptcy, these borrowers are just people with bad credit. Buying a Vehicle Before Bankruptcy Generally, motor vehicles are exempt property in Pennsylvania. Some unscrupulous filers transfer non-exempt property, like cash, into exempt property, like a car, right before they file bankruptcy. Other miscreants purchase luxury items, such as fancy cars, and then claim they cannot pay their bills. These instances are quite rare. But they happen frequently enough that the trustee (person who oversees the bankruptcy for […]
If I File Bankruptcy, Can I Buy a House?
Fundamentally, bankruptcy is about economic freedom. This federal debt relief program helps people regain control of their own finances. Therefore, many people do not even need to wait until their bankruptcies are discharged to buy houses. So, even if you file bankruptcy now, you may be able to take advantage of record-low mortgage rates. Current and former bankruptcy debtors will probably not qualify for the lowest rates. Furthermore, some houses, especially some large houses, might be unavailable to them. But the door is not completely closed. Moreover, a Philadelphia bankruptcy lawyer can point you in the right direction and give you the most home purchase options. Benefits of Bankruptcy Most people have little or no official or financial protection from the storms of life. Many consumer protections in the Fair Debt Collections Practices Act have fallen by the wayside. Additionally, most Pennsylvanians have less than $1,000 in savings. Bankruptcy offers short term and long term shelter from divorce, job loss, and other financial storms. This shelter begins with the Automatic Stay. Section 362 of the Bankruptcy Code prevents creditors from taking adverse actions like: Foreclosing property, Garnishing wages, Levying bank accounts, Harassing debtors, and Repossessing property. Unless debtors have a […]
New Rules: Commercial Bankruptcy and Paycheck Protection Program Loans
Lawmakers approved the CARES coronavirus relief act in the spring of 2020. Many of them probably hoped that the worst of the pandemic would soon pass. Clearly, that was not the case. As a result, the short-term relief Congress authorized was insufficient for many individuals and micro-businesses (five employees or fewer) hardest hit by the outbreak. Part of this relief package included Paycheck Protection Program loans and a temporary addition to the Bankruptcy Code. Chapter 5 is designed specifically for small businesses impacted by coronavirus. This provision expires on March 27, 2021. That deadline is rapidly approaching. Additionally, as outlined below, a Chapter 5 bankruptcy might be your last chance to discharge unpaid PPP loans. Since lockdowns and slowdowns persisted through the fall and into the winter, many businesses have been unable to repay these loans. And, only a select number of businesses are eligible for PPP loan forgiveness. An experienced Philadelphia bankruptcy lawyer can help your family or your business through these tough economic times. But unless you act quickly, you could lose some important legal and financial rights. Bankruptcy and Immediate Relief The Chapter 5 subsection altered some parts of the Bankruptcy Code, but it did not alter […]
Essential Questions to Ask Yourself About Your Credit Score and a Bankruptcy Filing
In many states, your credit rating affects more than your ability to borrow money and the amount of interest you pay. Your credit score could also affect your insurance rates, your ability to get a job, and several other areas. People are understandably worried about how a bankruptcy filing affects their credit score. This worry often leads to bankruptcy-phobia, which is an unreasonable fear of filing bankruptcy. Access to reliable information usually dispels an unreasonable fear. Unfortunately, there is a lot of misinformation about the interplay between bankruptcy and your credit score. At Bankruptcy Done Right, we help you make evidence-based decisions in this area. So, you have additional peace of mind in what is always an uncertain time. We do more than provide information. We also take care of the complex filing paperwork and stand up for you when your legal or financial rights are threatened. How Does Filing for Bankruptcy Affect Your Credit Score? Filing bankruptcy dramatically lowers your credit score. Anyone who tries to tell you otherwise is either inexperienced in this area or telling you what you want to hear. However, the effect is much less drastic than people think. As an initial matter, a bankruptcy […]
Get Out Of Debt Right Now!
Are You Fed Up With Sinking Further and Further Into The Endless Credit Card Poverty Trap? Are you sick and tired of working day and night just to scrape by? Are you a good, honest, hardworking American who simply deserves a fair shot? If you answered yes to any of those questions then… This Will Be THE Most Important Article You Ever Read. Here’s why: I’m here to tell you that whatever troubles you are facing, there is a solution. There is light at the end of the tunnel. If you’re stressed out by creditors endlessly harassing you, then this is for you. If you’re scared your credit score is taking a beating, then this is for you. And most of all, if you want to know what you can actually DO about it, then this is for you. Now before we get to the really good stuff, it’s really important that I tell you… Some Facts about Creditors Which Can Be Dangerous To Ignore! Owing on balances you can’t afford is bad enough, so the last thing you need is a debt collector hounding you about it… And don’t […]
Common Myths about Filing Bankruptcy Exposed
There are many myths about filing bankruptcy that are spread by your creditors to keep you from choosing that option. Below are the top 16 myths about filing bankruptcy—AND the actual FACTS. Bankruptcy Myth 1: Bankruptcy Doesn’t Really Get Rid Of Debt. Sooner Or Later, You Still Have To Pay It All Back. Right? FACT: Bankruptcy lets you get rid of certain debts without paying for them…without EVER having to pay for them. When bankruptcy gets rid of debts… those debts are gone… FOREVER. Getting rid of certain debts without you having to pay them back is simply how bankruptcy works. Bankruptcy Myth 2: Everyone Will Know You Have Filed For Bankruptcy. FACT: Unless you’re famous, chances are the only people who will know about a filing are your creditors and the people you tell. While it’s true that your bankruptcy is a matter of public record, unless someone is specifically trying to track down information on you, there is almost no chance that anyone will even know you filed. Bankruptcy Myth 3: Won’t I Lose Everything I Have? FACT: Most Chapter 7 filers don’t lose anything. There are laws that allow you to keep the […]
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 […]
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 […]