Monthly Archives: December 2013

New Year’s Resolution: Get a Fresh Start Through Chapter 7 Bankruptcy in Pittsburgh

chapter 7 bankruptcyChapter 7 Bankruptcy Can Clear the Way for a Better New Year.

For many, New Year’s Day is a time to reflect upon the past year and consider making certain improvements.  For some those changes involve diet and exercise but, for many others, those changes relate to spending and saving habits.  Many people would like to save more money but find that they cannot.  Holiday shopping can be hard on the feet, the wallet and your credit card accounts.  Resolving to make more reasonable spending decisions is a wise and healthy goal but what kinds of spending can you eliminate?

If you have maxed out your credit lines, even making the minimum monthly payments can drain a substantial portion of your income.  Further, making the minimum payments alone results in very long repayment periods and interest payments that, over time, can eclipse the original amount that you actually charged to the cards.  Worse, as you diligently attempt to make the minimum payments, your credit score remains low because your debt to income ratio is so high.  You are an honest person and you’ve always attempted to repay your creditors but you owe it to yourself to consider whether chapter 7 bankruptcy might put you in a better position to reach your financial goals of saving, purchasing a car or a house and building retirement accounts.  Chapter 7 bankruptcy is not the end.

What to Expect From Your Chapter 7 Bankruptcy in Pittsburgh.

In a simple chapter 7 bankruptcy case, you report all of your income, assets, expenses and liabilities together with other relevant financial information to your bankruptcy lawyer.  Your bankruptcy lawyer will prepare schedules and a statement of financial affairs for your review.  You must make sure that information is complete and accurate before you file it.  The chapter 7 trustee and many of your creditors will be reviewing that information so it is important to be as complete and accurate as possible.

Before you file your bankruptcy case, you must complete a pre-bankruptcy credit counseling session with an approved credit counseling agency.  That session can be completed online, over the telephone or in person.

After you have a filed your bankruptcy case, you will be scheduled for a meeting of creditors to be presided over by a chapter 7 trustee.  The trustee is not a judge and the bankruptcy judge will not be in the room during the meeting of creditors.  While all creditors are given notice of the meeting and permitted to ask you questions during the meeting, for most consumer debtors, no creditors will appear.  Your bankruptcy attorney will appear with you at your meeting of creditors and, if you have questions or concerns, that bankruptcy lawyer will assist you through the process.

After the meeting of creditors, you will need to take one more course in personal financial management.  That course can also be conducted in person, by telephone or via the internet.  While there is other work for your bankruptcy attorney along the way, for most chapter 7 bankruptcy debtors, all that remains to be done after the personal financial management course is to await a discharge.

How a Chapter 7 Bankruptcy Discharge Can Improve Your Financial Position.

It is true that a chapter 7 bankruptcy case can be harmful to your credit.  However, for people who have already suffered a drop in their credit as a result of high credit utilization, low debt to income, late payments, credit defaults and lawsuits from creditors, that hit to your credit score might be good medicine for your long term credit.  When your debts are discharged, you no longer have any legal obligation to pay them.  This means your capacity to take on new debt is higher.  It also means that you could have the ability to save more of what you earn.  Reducing your debt and timely paying your obligations after your chapter 7 discharge can result in an impressive credit score improvement.  Many debtors are surprised by just how quickly their credit scores rebound after a chapter 7 bankruptcy discharge.

Get Your Fresh Start Through Chapter 7 Bankruptcy in Pittsburgh Now!

You owe it to yourself and your family to improve your financial position.  While chapter 7 bankruptcy is not always the most sensible strategy, it very often is.  The best way to find out whether a chapter 7 bankruptcy case could improve your financial health is to seek a free initial consultation with an experienced Pittsburgh bankruptcy lawyer today.

(412) 925-8194

Chapter 7 Bankruptcy in Pittsburgh

Pittsburgh Bankruptcy Attorneys

We are a debt relief agency.  We help people file for relief under the United States Bankruptcy Code.

Bankruptcy Attorney

bankruptcy attorneyBankruptcy Attorney Information

Know What Questions to Ask Your Bankruptcy Attorney

If you are examining your bankruptcy options online, there are a few important questions you should ask your bankruptcy attorney first.

It is difficult to overestimate the importance of a free initial consultation that is really free.  Do not be afraid to ask whether there are hidden fees associated with the consultation or whether you will be billed for it later if you choose to hire the attorney with whom you have the “free” initial consultation.  Also ask whether there are time limits to a consultation.  Some attorneys will limit their consultations to 15 or 30 minutes.  In most cases, a good rule of thumb is that an initial consultation will require approximately one hour.  Also, make sure that a “free initial consultation” does not require you to use that bankruptcy attorney’s services.  Does your bankruptcy attorney have the ability to perform workouts, negotiations, debt settlements and litigation?  If your bankruptcy attorney only has one tool in his toolbox, that is the one he is likely to use even if you might be better served with some other strategy.

There are restrictions regarding who may be a debtor under each chapter of the United States Bankruptcy Code.  A debtor under chapter 7 must undergo the “means test” to determine whether the presumption of abuse would apply to a chapter 7 bankruptcy filing.  For instance, only a debtor with a regular source of income may be a debtor under chapter 13.  Beyond that, there are restrictions on how much debt a debtor may have (both secured and unsecured debt) and still qualify for relief under chapter 13.  A debtor who exceeds the income thresholds for chapter 7 and exceeds the debt limits for chapter 13, may be required to file a case under chapter 11 (a section of the Bankruptcy Code generally reserved for business debtors).  Moreover, if you have filed previous bankruptcy cases, that could also affect your eligibility to file a case or receive a discharge under certain chapters of the United States Bankruptcy Code.

  • Does your bankruptcy attorney have experience with cases like yours?

There is no substitute for experience.  Make sure your bankruptcy attorney has represented similarly situated clients.  Do not be afraid to ask simple and complex questions regarding how a bankruptcy case works and what you should expect from the process.  Gauge how your attorney responds to those questions.  An experienced bankruptcy attorney can provide you with timely and complete answers to your questions.

The disciplinary board publishes records of attorney discipline online.  Alternatively, you can ask your bankruptcy attorney directly whether he or she has been subject to any disciplinary proceedings.  Furthermore, in Pennsylvania, your bankruptcy attorney is required to tell you whether he or she maintains professional liability insurance.

  • Does your bankruptcy attorney have experience in representing debtors in foreclosure situations?

Your bankruptcy attorney should have experience with foreclosure cases if your situation involves a foreclosure.  The deadlines and timeframes involved in the foreclosure process may require your bankruptcy attorney to file certain documents in state court before or after the filing of a bankruptcy case.  In fact, it may be the case that it is more sensible to defend the foreclosure case than to file a bankruptcy case.  Your bankruptcy attorney should also be able to explain the details of the bankruptcy court’s loss mitigation program if one is available in your jurisdiction.

Generally, a judgment acts as a lien on all real property of the judgment debtor in the county in which the judgment is entered.  If a non-consensual judgment lien exists impairs your homestead exemption, you may be able to have it judicially removed through the bankruptcy process.  This does not happen automatically.  If you have a judgment entered against you and you own real property, talk to your bankruptcy attorney about stripping that judgment lien.

  • Has your bankruptcy attorney challenged the secured status of creditors who claim to be owed more than the value of their collateral?

Certain secured creditors whose interests are undersecured (that is, creditors whose collateral is worth less than the debtor owes them on the secured indebtedness) may have their claims bifurcated into secured and unsecured components.  As with liens that impair an exemption, this process does not happen automatically.  If you believe you have an encumbered asset on which you owe more than the value of the asset, talk to your bankruptcy attorney about a determination of secured status.

You are not the first person to have faced insolvency and many experienced bankruptcy attorney have online reviews.  Those reviews can be very helpful in determining whether your bankruptcy lawyer is a good fit for you.

If you are considering your bankruptcy options, don’t wait.  Take the opportunity for a free initial consultation with an experienced bankruptcy attorney today.

Robleto Law, PLLC – (412) 925-8194

We are a debt relief agency.  We help people file for relief under the United States Bankruptcy Code.

Pittsburgh Bankruptcy Attorney

Credit Card Debt in Bankruptcy

How Credit Card Debt is Addressed in a Personal Bankruptcy Case

creditcards

How credit card debt is handled in a bankruptcy case depends upon numerous factors.  First, the kind of bankruptcy case plays a large part in determining how credit card debt will be treated in bankruptcy.  Generally, individual consumers file bankruptcy petitions under chapter 7 or chapter 13 of the United States Bankruptcy Code.  Second, whether a debtor has non-exempt assets available for distribution to creditors may also play a part in determining whether the holders of credit card claims are paid anything.  Third, the type of charges made to the card and the timing of those charges can affect whether credit card debt is dischargeable.

Credit Card Debt in a Chapter 7 Bankruptcy Case

Chapter 7 bankruptcy is a form of liquidation.  In the case of a business, liquidation would mean that the debtor’s assets would be sold and distributed to its creditors.  The same is true of consumer debtors except that consumers can apply exemptions to protect certain of their property from the reach of their creditors.  Depending on the exemption law applicable to a debtor (which varies from state to state), a debtor may be able to elect from the exemption scheme set forth in the Bankruptcy Code or to use state exemptions.  While most facets of bankruptcy law are controlled by Federal law, Congress left it to the states to determine whether debtors could choose between state and Federal exemptions.  Congress also gave states the power to compel debtors to accept either the state or Federal exemption scheme, leaving them without a choice.  In any event, all states allow debtors to exempt some of their property and, for many debtors, there is no non-exempt property available for distribution to unsecured creditors.  When this happens, credit card companies are not paid any distribution.

Credit Card Debt in a Chapter 13 Bankruptcy Case

A debtor in a chapter 13 bankruptcy case attempts to repay its creditors some or all of what they are owed over a period of 3 to 5 years.  Generally, debtors pay their mortgage and car payments and certain other obligations through a chapter 13 plan.  Debtors report their monthly expenses and pay their disposable income into their chapter 13 plans.  If a debtor’s disposable income is more than enough to pay secured and priority claims, the holders of unsecured claims, including credit card claims, may receive some distribution.  In addition to the requirement that debtors pay their disposable income into their chapter 13 plans, such debtors must also satisfy the liquidation analysis test.  Said differently, a debtor must demonstrate that, after application of exemptions and giving affect to certain costs, that creditors would fare better under its chapter 13 plan than if the debtor’s property were liquidated in a case under chapter 7.  Often, that means increased plan contributions which could result in a distribution to the holders of credit card claims.

Certain Types of Credit Card Charges Give Rise to Dischargeability Issues

Bankruptcy lawyers are prohibited from advising their clients to incur credit card debt in advance of filing a bankruptcy case.  Additionally, charges for luxury goods incurred within the 90-day period preceding the filing of the bankruptcy case are presumptively non-dischargeable if they exceed $650 to a single creditor.  Likewise, cash advances of more than $925 from any creditor within the 70-day period preceding the filing of a bankruptcy case are also presumed non-dischargeable.

To determine whether your credit card debt would be dischargeable in bankruptcy case, contact an experienced bankruptcy lawyer for a free initial consultation.

(412) 925-8194