chapter 13 bankruptcy


By:Mike Cibik


If You’re Thinking Bankruptcy, Chapter 13 May Be The Best Option


Our personal finances generally do not stay in the same shape for a long time. It’s majorly because the circumstances change, usually without notifying. If a financial crisis hits your business, you would prioritize to overcome it with a strategic plan. But when bankruptcy hits, you may require more attention to tackle it. There are basically two categories of bankruptcy cases filed by people when they are willing to come out of debt: Chapter 7 and Chapter 13.


  • In case, you are required to file for personal bankruptcy, make Chapter 13 your first preference whenever feasible. Chapter 7 is seemingly less complicated as it involves merely a few months in the court proceedings and a faster exit to a debt-free life. 
  • Chapter 13 seems to be more complicated as it has repayment plans that last from 3-5 years before one can claim complete liberty from debt. 
  • Usually, a majority of the people who need to file for bankruptcy prefer Chapter 7 as it is less time consuming and less expensive. However, if you dig a little deeper into the entire process of debt-relief, you may find Chapter 7 being a less attractive option due to the following reasons: 
    1. Chapter 13 offers a restructured payment plan and spread the payment terms over a 3-to-5 year period. This also allows you to continue working, and pay your debts. 
    2. The major difference between Chapter 13 and Chapter 7 is that Chapter 13 allows you to retain your assets. This is known as the ‘wage earners plan’ since you require to earn income to be eligible. Another benefit is that Chapter 13 can protect all the co-signers too if you have any, on your loans. 
    3. Chapter 13 stops the process of foreclosure against your home. This type of debt relief helps you in retaining the ownership of your house. Chapter 13 also allows you to repay your debts in portions in exchange for keeping all your assets. What a relief, isn’t it? 
    4. While Chapter 7 continues to show on your credit record for a complete decade, Chapter 13 bankruptcy will only appear on your credit record for 7 years.
    5. After filing for bankruptcy, if you incur additional debt due to job loss or illness, Chapter 13 allows you to dismiss and refile your case including the fresh debt. 
    6. One of the major advantages of Chapter 13 bankruptcy lawsuit is that you can repay your creditors basis your income and assets value. This means that your repayment option can be as low as $150/month or even less. 
    7. A chapter 13 bankruptcy case allows you to freely dismiss the case if required. You may get in touch with an experienced bankruptcy attorney and get your repayment plan modified if there is a change in your financial situations. This clearly indicates that you completely are in control of your life. 
    8. Chapter 13 bankruptcy is a better bankruptcy option in case you require lowering the interest rate on your automobile loan. This suggests that you can possibly reduce the monthly expenses on your car without giving away the vehicle. 
    9. Wipe Out Underwater Second Mortgages In Chapter 13.  If you own real estate and are upside down on your second mortgage, you may be able to eliminate it by filing for Chapter 13 bankruptcy. 
    10. If you are liable to pay tax debts to the government, you can spread your payment over 3 to 5 years without paying any extra penalties or interest. Thus, Chapter 13 saves you huge money you owe to the government. 
    11. Though your bankruptcy attorney may charge higher fees for Chapter 13 bankruptcy case, however, you may pay the fees through an agreed repayment plan. While in case of chapter 7 bankruptcy, you need to pay the entire fees in advance before the case is filed.


Bankruptcy can leave you devastated, but the best step is to come out of it by consulting an experienced bankruptcy attorney. Chapter 7 bankruptcy certainly looks attractive, if you desire immediate solutions to your financial problems.


However, if you don’t want an absolute liquidation of all the assets you possess, Chapter 13 bankruptcy is the best bankruptcy options. Consulting an experienced bankruptcy attorney who understands your case and personal bankruptcy on time will help you in the long run.

If you’re confused about which Chapter to file for, the Law Offices of Cibik & Cataldo can help you! Contact our expert bankruptcy attorneys at 215-735-1060 and get all your questions answered.

unsecured debts


By:Mike Cibik


What You Need to Know Regarding Secured Vs. Unsecured Debts


Debt; one of the most dreaded words a person has to deal with in his or her lifetime. Being cash-strapped in an economy such as ours is not uncommon.


It is important to be aware of the two kinds of debts –secured and unsecured debts. Secured debts have some collateral involved with it. It means that you have put something on the line in the promise of paying back your debt.


Whereas unsecured debts do not legally attach you to anything you own. That is, you still have to repay the money, but the lenders do not have immediate rights over your property.


They have no security. If you fail to repay your debt, the lender cannot repossess or seize anything you own. While filing for bankruptcy, it is easier to deal with unsecured debts because they are more often than not legally written off.


But it must be kept in mind that sometimes an unsecured debt can turn into a secured one. If left unpaid, an unsecured debt can be turned into a secure debt. The creditor will try various means to get you to pay your dues. He may even try to appoint a debt collector on board to try and retrieve his money. When all his efforts fail, he will eventually file a case against you and seek the court’s permission to collect what you owe him. The court can grant him permission to:

  • Seize one of your assets.
  • Put a lien on your assets making it impossible for you to borrow against it or sell it without paying your debt.
  • Garnish your wages, by seizing a portion of your salary each pay period till his debt has been covered. (Depending on your state’s laws)


If you fail to pay income taxes, the IRS can record a tax lien against your personal property, without having to sue you.  In such cases, filing for bankruptcy can stop a lawsuit from progressing. It can stop the creditors from turning an unsecured debt into a secure one.


Alternately, sometimes a secured debt can turn into an unsecured debt. Secured debts will be treated as unsecured debts once the collection of the collateral damage has been completed. After the creditor repossesses or sells off the security gained by him, any remaining debt would turn into unsecured debt.


A secured debt can also be turned into unsecured in many other ways. If the security is lost or damaged, the creditor would be left with nothing to seize or take over. In case of an alternate secured creditor takes over the security claiming prior rights, the other creditor might no longer have claims over his dues.


There are two kinds of unsecured debts namely, priority debts and general unsecured debts.


  • Priority debts are those that are given special consideration by the law. Income taxes or child support that has not been paid come under priority debts. These have priority over other unsecured debts and they are the first things that need to be paid in full in case of bankruptcy.


  • General Unsecured debts are all the other debts which do not come under the category or priority debts. Medical bills, credit card bills, personal debts, retail accounts, unpaid utilities are some of the examples of general unsecured debts. An unsecured debt that is not a priority is referred to as general unsecured debt.


If all your unsecured bills are general and not priority then you should file a Chapter 7 bankruptcy case because it writes off those debts within a span of 3 to 4 months. You might end up not having to pay anything on those debts.


On the other hand, Chapter 13 or the adjustment of debts case would have you pay some part of your general unsecured debts. This type also takes longer since the release of the remaining unpaid amount will not be allowed until the end of a 3-5 year payment plan.


It is also a lot riskier because, in case you do not successfully complete the Chapter 13 case, the remaining part of the general unsecured debt will be written off and you will still continue to owe them that amount. Chapter 13 is a favorable option if you have a priority debt that is quite large since it has better tools for dealing with such kinds of debts.


Cibik & Cataldo P.C. have provided debt-relief services for 35 years. We welcome an opportunity to hear your case and offer our legal expertise. If you’re worried about your debts, do not hesitate to contact us to get your questions answered at 215-735-1060.

credit score


By:Mike Cibik


What You Should Know About  FICO and Vantage Credit Scores


When it comes to credit scores, most borrowers think of FICO scores. But, recently another credit scoring system-VantageScore- is gaining popularity. While both FICO credit score and VantageScore are calculated basis the same five parameters- payment history, credit mix, current debts, length of credit history, and new credit- there are subtle differences between them.


Before we talk about the differences, let us explain the five scoring parameters in detail.


1. Payment history

Payment history means whether a borrower pays his creditors on time or not. For calculating FICO scores, generally, 35% of the score is allocated to the payment history of a borrower. Points are reduced for late repayments. With VantageScore, certain kinds of late payments such as mortgage, carry a more severe penalty than others.


2. Credit mix

Credit mix refers to the variety of credit accounts an individual owes. FICO allocates 10% to credit mix. Both FICO and Vantage credit score favorably view having a good mix of retail debt, credit card debt, installment loans such as auto loans, and mortgages.


3. Current Debts

This refers to the amount of money a borrower owes now. FICO allocates 30% of its score to a person’s current debts. A big outstanding debt doesn’t necessarily mean a lower credit score. For FICO and VantageScore, a ratio of money owed to the amount of credit available is what matters.

For instance, person A owes $10,000 presently, but all his lines of credit are extended, and credit cards are maxed out and person B owes $50,000, but he’s not close to the limit on any of his credit accounts. Person A will have a lower credit score than Person B.  VantageScore also rewards people for maintaining a healthy credit utilization record. For Example, keeping your credit card balances under 30% will get you a higher score.


4. Length of credit history

Length of credit history means how long has a person owed. For FICO, the longer a person’s credit history, more is his creditworthiness and his FICO score. FICO calculates 15% of its score based on a borrower’s credit history. VantageScore allows shorter credit histories and is more useful for new borrowers.


5. New credit

New credit means recently-opened credit accounts. FICO computes 10% of its score based on how many new credit accounts a borrower has opened. Typically, a person who has taken up many loans in a short period prior to applying for the loan in question will be considered a credit risk, and his score will be reduced by a few points. VantageScore also penalizes your credit score for making multiple hard inquiries in a short period of time, for availing debt.


FICO vs. VantageScore

FICO and VantageScore have similar credit scoring models (described above) and solicit credit information from the same three major credit bureaus- Equifax, TransUnion, and Experian. But there are significant differences in their computation method and rating priorities.


Different methods of gathering consumer credit data

FICO gathers credit reports from the three bureaus for millions of consumers at once, and then, analyzes them to arrive at a final score. VantageScore uses a combined set of consumer credit files for a borrower from credit bureaus.


Different scoring requirements

FICO requires at least six months of credit history and at least one account reported to the CRA in this period. VantageScore is great for new borrowers as it asks for only one month of prior credit history and one reported account within the last two years.


Different treatment of late payments

FICO penalizes all types of late payments equally. But VantageScore penalizes more points for late mortgage payments.


Different impact of new credit inquiries

FICO considers all credit inquiries made within 45 days as new inquiries (after deduplication) and penalizes borrowers for making too many of them.  VantageScore limits itself to a span of only 14 days prior to application for credit scoring.


Different influence of low-balance collections

Both FICO and VantageScore penalizes borrowers for accounts sent for collection. But FICO ignores collection accounts that are already paid off or that had an original amount of less than $100. VantageScore views all collection accounts equally.

As a borrower, it makes sense to understand these differences well and more importantly, their implication on your creditworthiness so that you can make wise borrowing decisions and avoid bankruptcy.


For 35 years, the Philadelphia, Pennsylvania debt-relief law firm of Cibik & Cataldo P.C. has provided superior legal services to thousands of individuals in the surrounding areas. Call us at 215-735-1060 to get your questions about credit score or bankruptcy answered by our team of experts.

personal loan


By:Mike Cibik


How Can a Bankruptcy Lawyer Show You Personal Loan Options?

Although Bankruptcy is a dark period in anyone that experiences its life, it can pass. It is easier said than done to try and erase bankruptcy from your life. You are marked as an offender who could not pay his dues and had to give up all his assets.


Sure, it makes you cringe and look the other way. Unfortunately, you have to build your credit score from scratch. It is certainly not going to be easy nor will you find it simple to obtain a personal loan.


Fortunately, the prospect of getting a guaranteed bankruptcy loan when you are in need has become considerably brighter today. In fact, there is not much of a waiting period and, you can have your hands on the money within 24 hours. That is definitely a godsend for most individuals aspiring to borrow a certain amount after being through personal bankruptcy proceedings. It will no doubt help you to build up your credit once again but will also come in handy during any unforeseen emergency.


You do have to have a few documents in place as well as the backing of a guarantor or some sort of security once you want to apply for a sizable amount of loan. Having your hands on the required amount will also ease your life going forward. So be sure that you have access to the following before applying for a personal loan.




It will definitely help if you still have a piece of property that you can utilize as security for your loan. Giving everything up to the lender when you declare yourself bankrupt would not be wise. It is advisable to follow the bankruptcy tips when you consult with a lawyer before filing for bankruptcy. You do have to live comfortably afterward too. No issues, if you are not in possession of the house anymore, a car or some any sort of valuables would do as well.


It would help to remember that your loan application is likely to be rejected without sufficient collateral. A few lenders might be willing to offer you unsecured loans as well especially when you do not own anything of value. Sadly, the interest rate along with the financial fees tends to go up sharply once your past bankruptcy details come into the picture.


Debt Level


It is also advisable to apply for a loan only after you have some sort of steady income. The lenders tend to be wary of individuals who have been through bankruptcy proceedings and will not be willing to lend you more money. The suspicions about your inability to pay will always stay on the surface of your lender’s mind making it essential for you to earn regularly.


There will be a light at the end of the tunnel post-bankruptcy though. Your ‘debt-to-income ratio’ is sure to look good once all your future debts are wiped off the records after you declare yourself to be bankrupt.




Having a positive credit score will work to your advantage once you decide to apply for a loan again. Your eligibility to repay the amount is directly proportional to your credit score and will help the lenders to make their decision in your favor. The criteria differ widely though with each prospective lender having a separate set of rules for approving the loans.


However, there is sure to be a minimum credit score that will make you eligible for procuring the required loan amount after being discharged of bankruptcy.


Bankruptcy Records & Loans


Sure, you will find quite a few lenders willing to provide you with loans the instant you discharge your bankruptcy. However, it pays to remain wary of such lenders as you are likely to find yourself mired in debts soon afterward due to exorbitant rates of interests.


Be sure to keep yourself informed about your credit score and remember that filing for Chapter 7 will not require you to pay anything at the time. Sadly, it remains on your report for as long as ten years thus impacting your credit score adversely. A chapter 13, bankruptcy, on the other hand, is thought to be less damaging as you will be allowed to submit a credit application while the reorganization is in force.


Want to know your options of getting a Personal Loan after filing for bankruptcy? Cibik & Cataldo can help you with all of your bankruptcy needs! Contact us at 215-735-1060 to talk to our expert attorneys.

car repossession


By:Mike Cibik



The Top 3 Most Effective Ways To Solve Your Car Repossession Issues


A car is one of the most precious possessions of an individual. We have saved enough from our hard earned money for the downpayment to make this dream come true. But if you possess a car, you’ll need to invest in its regular upkeep.


Apart from repaying the car loan that you take, a car calls for certain maintenance and repair costs at regular intervals. Now, your financial situation may not be always at its best, and a sudden crisis in your business or professional life can land you in a deep financial mess. In such a situation, when you are unable to repay the monthly installment amount that the car financing company lends you out while buying the car, your car could be possessed by the lender, also known as car repossession.


How Does Car Repossession Work?


When you buy a car by signing a loan contract, your lender automatically gets an upper hand till the time you repay the entire loan amount. Now, in case you are unable to repay the monthly payment, the lender can lawfully take your car as a replacement for the money that you owe him.


This can be done without prior warning or court orders. Once the lender has repossessed your car, he can auction the car or sell it off to get back his money.


This is a critical situation for the car owner and going by the way car repossession works; there can be worse situations like your car being repossessed even if only one installment is left to be paid. Car repossession is a legally complex process that is required to be dealt with proper financial help.


Ways of Getting Your Repossessed Car Back


In the uncalled for incidence of your car being repossessed by your lender, you can definitely hope to get it back using the following approaches:


  • Repayment of the Dues – Even if your car is repossessed, all is not lost till the car is with the lender and has not been put up for an auction. You can make financial arrangements to repay off the monthly installments that are yet to be paid. In spite of the fact that you have already missed the deadlines, you can seek immediate help from someone you trust or make alternative arrangements to settle all the remaining dues.


And once you clear the dues, there should be no reason for the lender to hold back your car. Depending on the intensity of the situation, you might, however, have to pay the repossession cost to get back the car. Do not forget to ask for the belongings of your car if it was repossessed, and your valuables or belongings were inside.


  • Negotiation for a Revised Loan Term – There’s no point in losing your calm or temper. Negotiating with the lender is yet another way of dealing with the tricky situation of car repossession. Since it is a one-to-one communication between you and your creditor, you might be able to convince him to lower the loan amount or perhaps revise the contract a bit to make it easy on your finances.


In fact, with negotiation, you can ask your lender to extend the time period so that you can get some more time to repay your loan. If your financial crisis has resulted from a really serious cause, such negotiation should ideally work in your favor.


  • File for Bankruptcy – If none of the above ways work, the best-possible option is to file for personal bankruptcy with the help of a trusted bankruptcy lawyer.


Filing for Chapter 7 bankruptcy will ensure stopping the creditor from taking further steps or demanding further payment. The court will ask the lender to change the loan conditions while also promising you the scope and the time to prepare for the repayment.


Bankruptcy is definitely the most reliable and full-proof way of dealing with car repossession and coming out successful. This is one of the easiest, feasible and lawful ways to hold onto your dream car, if all else fails.


Contact Cibik & Cataldo Today


If your car has been repossessed, you will require a seasoned personal bankruptcy lawyer by your side to get back your prized possession. Give us a call at 215-735-1060 for a free consultation for the best course of action for you.

Home Foreclosure


By:Mike Cibik


How Filing for Bankruptcy Can Protect Your Home From Foreclosure


You may not consider your home to be your most valuable asset but, it surely shelters you and keeps you comfortable regardless of your financial condition. Unfortunately, there may come a time when you may fail to pay your mortgage payments. You should always try and arrange for the required amount and avoid foreclosure. However, simply taking loans without thinking about the outcome would be foolhardy.


The best way to avoid losing your home is to file for bankruptcy with further delay when other options don’t look so promising.


How will you avoid your home from being acquired then? This is a question that is sure to trouble you as you try to save yourself from sinking deep into the abyss of debts. Your best bet is to get in touch with a qualified bankruptcy attorney to plan your next move.


A bankruptcy attorney will be able to guide you through the troubled times and help you to understand how declaring filing for bankruptcy can actually work in your favor.


Think of it as a perfect way to get out of a tricky financial situation. You are certainly not alone here. From the king of pop Michael Jackson to Francis Coppola and many other top celebs have done it to save themselves as well as some of their prized possessions.


Time is of the essence though. You should act quickly without losing even a minute trying to find alternate ways to avoid foreclosure. When you know for sure that your assets are going to be seized filing for Chapter 7 bankruptcy may give you additional time to find the required amount for paying off your debts. Else opt for a Chapter 13 bankruptcy that may actually help you keep your home.


A trifle confusing, isn’t it? Make sure your lawyer explain the facts clearly as you try to deal with this temporary setback. So, should you opt for Chapter 7 or would Chapter 13 be a better option? Here are the facts. These will help you make an informed decision.


Chapter 7: What it means


Filing for Chapter 7 would automatically enforce a stay on your property. The person who you owe money to would be unable to initiate the sale proceedings for the moment. The sale of your home would thus be postponed in accordance with the law immediately.


However, you only get a breather for a limited time usually around 2-3 months or slightly more. This may actually help you when foreclosure is not looming large on the horizon. This is an ideal way to get rid of all your debts along with your mortgage dues. You should try and pay off your mortgage at the first opportunity though and get to modify it according to your convenience in order to retain the ownership of your home.


This is a simpler and speedier way of keeping your home when:

  • You have no nonexempt equity
  • There are no pending mortgage payments
  • You have not taken a 2nd mortgage


Chapter 13: When is it preferable?


Well, you may want to stay put in the place you call home. The authorities will allow you to do so even in the face of an imminent foreclosure if you file for Chapter 13 bankruptcy. The legal procedure will allow you to set up a repayment plan for meeting your mortgage dues.


You can propose the time period yourself but be sure that it does not extend beyond 5 years. You will also have to have a steady income to take advantage of this option. Also, make sure to pay both your present mortgage dues along with the amount due as a part of your unpaid mortgage regularly and attempt to clear it all by the time proposed for repayment. The foreclosure will be withdrawn instantly, and you get to live in your home indefinitely thereafter.


You will be best protected by filing for Chapter 13 bankruptcy when you:

  • Have equity in your home
  • Have unpaid mortgage payments to clear
  • Have a 2nd or 3rd mortgage on the house


Contact Cibik & Cataldo Today


For over three decades Cibik & Cataldo have been helping people in distress keep their homes. Call us at 215-735-1060 if you would like a free consultation about your foreclosure case or with any bankruptcy questions you may have.


Bankruptcy as a Relief


By:Mike Cibik


How Bankruptcy Can Actually be a Great Relief


Filing for bankruptcy can be one of the hardest decisions of your life. But sometimes bankruptcy can be the fastest way of reordering your life and getting a fresh start. Whatever the situation, filing for bankruptcy should not be considered the easy way out of chaotic financial situations.


It’s actually a chance to reassess your income and expenses, buying and spending habits, and other financial decisions.


An experienced personal bankruptcy attorney can explain filing rules and processes and prepare you for the aftermath. You may have heard a lot about the pitfalls of bankruptcy such as it will permanently damage your credit scores, or ruin your chances of finding a good job or a decent home. These tend to be over-exaggerations, and your attorney will set your expectations right and guide you in rebuilding your credit and reputation.


Knowing When to File


Bankruptcy is not a decision to be made on a whim. Just because you’re finding it hard to pay off bills doesn’t mean you should file for bankruptcy.


But if you see collection agencies queuing up at your door, or you are cutting back on necessities like food or heating, or can see no fathomable repayment solution for mounting debts, you need to consult a personal bankruptcy attorney immediately.


Chapter 7 Liquidation or Chapter 13 Reorganization?


Two avenues available for people filing personal bankruptcy are Chapter 7 liquidation and Chapter 13 reorganization. Chapter 7 bankruptcy can be filed if you have no steady income or minimal extra income to pay off debts and you have a number of secured and unsecured debts.


Unsecured debts such as credit card bills and personal loans will be eliminated. Typically, secured debts such as auto loans and mortgages will be wiped off by foreclosure of these items.


But you may be able to hold onto your home by “reaffirming” your mortgage and continuing repayments. While losing your home is a downside, Chapter 7 bankruptcy may be your fastest route to solvency if your debt situation is clearly unmanageable.


Chapter 13 reorganization is for people having somewhat steady income and a feasible repayment plan in place. Unsecured debts are reduced, and the additional cash reserves can be used to remain current on your secured debt repayment. You may be able to avoid foreclosure or repossession of your home if you’re able to present a serious repayment plan to your creditors and bankruptcy judge.


Bankruptcy is Not a Stigma


While it’s true that your bankruptcy records are available for public perusal and your credit scoring will be adversely affected for some time, bankruptcy should not be considered a stigma. In fact, it takes great courage to declare financial distress and seek legal help.


Regarding credit scoring, there’s nothing to prevent you from rebuilding your credit history by being regular in your repayments and not picking up any new loans. Data indicates people who file personal bankruptcy are able to pick up a new mortgage within a period of three years if they plan their finances with caution.

A Clean Slate


Many misguided people consider loss of possessions, public rebuke, and financial scrutiny that follows bankruptcy proceedings, to be valid excuses for not filing. There are numerous examples of people who have successfully rebuilt their financial standing after bankruptcy by diligently discharging their obligations and restructuring their habits and decisions wisely.


Bankruptcy declaration can be a great source of relief. It will eliminate or considerably reduce your debts, assuage emotional turmoil or guilt that comes with non-payment of dues, and remove uncertainty regarding financial future.


Following your declaration, a bankruptcy judge will outline a stringent repayment plan after examining your financial records, income, and expenses. This is an opportunity to reorder your household budget on a permanent basis. By doing so, you can present evidence that you are serious about repaying your creditors.


In no time, you can start working towards rebuilding your credit. Although bankruptcy blemishes your credit report for a while, you may become eligible for high-end mortgages and prime interest rates by displaying responsibility in discharging your financial duties.


Contact Us Today!


In other words, bankruptcy can be a powerful catalyst to trigger positive growth. If you’re unsure, confused or have questions regarding life after bankruptcy make sure to give us a call at 215-735-1060. We would be happy to answer any questions that you might have.




By:Mike Cibik


Steps You Can Take In Order to Help Stop Foreclosure On Your Home

Today, there are many reasons why homeowners are facing a foreclosure, such as an illness, divorce or job loss. There are just as many reasons why people are facing bankruptcy.


The economy is vastly different than fifteen years ago. Today, it’s not uncommon to see a sheriff’s sale notice on a home. However, there are things that you can do to stop the foreclosure process.


Ways to Avoid Foreclosure

1. Work with your lender. Most people assume their lenders won’t help them and will just go ahead and foreclose on the home.

Today’s lenders realize that everyone has debts. It would be in their best interest to help you, rather than face the backlash, especially on social media. You can ask your lender to:

-Create a repayment plan to delay legal action. This is called forbearance.
-Forgive a payment.
-Spread out missed payments.

Also, your loan is not set in stone. You can ask to change the terms of the loan. You may be able to add back payments to it. You can also apply for a loan for the missed payments.


2. Short sale. A short sale is when the net proceeds fall short of the debt secured by liens against the home. The homeowner sells the home to a third party.

The lien holders (including a second mortgage lender) have to accept the price for the short sale to work. The homeowner must submit a “loss mitigation” application. It includes several documents, including recent tax returns, a financial statement, and a hardship statement.


3. Bankruptcy. When you file for bankruptcy, an automatic stay goes into effect. This stops creditors from collecting on debts (e.g., phone calls).  

It’s interesting to note that foreclosure is a method of collection. So, you are temporarily protected from the mortgage company. The idea of a bankruptcy is to give you another chance to start over.

With a Chapter 7 bankruptcy, the mortgage company can continue the foreclosure if you were behind on your payments at the time of filing. If you were current on your payments, then the bankruptcy court will most likely allow you to keep making your mortgage payments, while your other debts are wiped. This frees up money to continue making your mortgage payments.

With a Chapter 13 bankruptcy, you have agreed to a payment plan for the debts that are listed in the bankruptcy. You can make up mortgage arrears in a Chapter 13.

However, you cannot do this with a Chapter 7. An experienced bankruptcy lawyer can give you more information.


4.  Deed-in-Lieu. You are surrendering your deed to the lender. This affects your credit just as a foreclosure does. If approved, the lender will send you:

The deed that transfers ownership of the home.
-An estoppel affidavit. This document sets the terms of the agreement and will include a provision that you are doing this of your own volition.


5. Mortgage Assumption. A new person assumes your mortgage.

The property is transferred (sold), and the buyer takes over the existing loan. Some lenders will make the buyer go through an approval process.

If there is a “due on sale” provision in the loan, the mortgage is not assumable. This means that if the property is transferred, the new owner will be responsible for the full balance of the loan and repay it in a shortened time period.

However, there are exceptions to the “due on sale” provision. It cannot be enforced on a transfer from:

-A parent to child.
-A relative upon the seller’s death
-Between spouses.
-Resulting from a divorce.

If the mortgage is in default at the time of transfer, the new owner will need to “cure” the default to stop the foreclosure. The buyer will have to make a large payment to make up for the missed payments or create a repayment plan with the lender.


6. Sell the Home. You can also sell the home, and the proceeds go to paying off the mortgage.


Don’t Face Foreclosure Alone

At Cibik & Cataldo, we can provide the help your need in the form of a bankruptcy to stop the foreclosure process. Whether you are filing for a Chapter 7 or a Chapter 13, we can save your home. The thought of losing the home you have worked so hard for is stressful.

We have the experience and the track record to prove we are your best defense. We offer a free consultation to help you understand the facts on bankruptcy and how it applies to saving your home.

We will make sure that you fully understand what will happen before and after the discharge. We have helped nearly 30,000 clients start over financially, and we can help you too. Call or email us today to set up your appointment.

worry-free bankruptcy


By:Mike Cibik


Experience a Worry-Free Bankruptcy

I know what you are thinking: worry-free and bankruptcy cannot be in the same sentence. You can have a worry-free bankruptcy!

When you decide to file for bankruptcy, half the battle is over. A bankruptcy is just another way to take care of debt. It should not be entered upon lightly, for there are consequences.

The bankruptcy will stay on your credit report for ten years. You’ll be able to get a credit card after you are discharged, but it will have a high-interest rate. The same goes for financing a car. But you already know how serious a bankruptcy is.

Yet, you have the power to make your bankruptcy case go smoothly by working with your bankruptcy attorney. It may be obvious, but there are things you can to ensure this.


Ways to Make the Bankruptcy Process Go Smoothly

1. Check all correspondence: This means print and electronic. There is a lot of paperwork generated for a bankruptcy, and most of it will be mailed to you. You should review each piece so that you are truly engaged in the process.

You will need to arrange a time to appear at the first meeting of the creditors, also known as the 341 Meeting. It’s interesting to note that it’s not a meeting but a hearing. The trustee assigned to your bankruptcy case (Chapter 7 bankruptcy) conducts the hearing.

The creditors are invited, but not all show up. We want this meeting to be quick and to the point. So, it’s in your best interest to use short answers.

You aren’t there to defend your decision to file for bankruptcy. This meeting is to validate the information in the bankruptcy papers. It also provides the opportunity for you to give the trustee any information to determine exemptions and non-exemptions.


2. Review your documents: You should review all of the documents generated from your case as well as the documents you supplied. It’s a good habit to review everything that has your name on it, especially your signature. Most importantly, read over your bankruptcy petition before it’s filed.

You must be truthful and accurate (to the best of your knowledge) on these pages. There is the penalty of perjury, since the case is filed with the United States Bankruptcy Court. It is vital that you list all assets, liabilities, income, expenses, recent property transfers … etc.


3. Alerting your bankruptcy lawyer of any changes:  Tell your bankruptcy attorney of any changes to your life, such as getting a new job, laid off, sick or an inheritance. It does you no good to try and hide such big life changes as well as assets and money.


4. Ask questions: Filing for bankruptcy is a serious decision. To help put your mind at ease, you should ask as many as questions as you can.

It’s also important that you build a strong relationship with your bankruptcy lawyer, so you feel comfortable asking him or her anything related to your case. At Cibik & Cataldo, you are our number priority. We are here to help you through every step of your case.


5. Gather all of your paperwork: Your bankruptcy case is on a short timeline. What helps things to move quickly is when you have all of the documents that are required.

Delays mean trouble, so it’s imperative that you respond quickly to your bankruptcy lawyer. If you have an issue with obtaining a document, don’t hesitate to call your attorney.


6. Try to relax: Going through a bankruptcy is stressful. You are upset that you had to make this decision and then you are nervous because you don’t what to expect or what your future holds. This comes back to trust; trusting your lawyer to have your best interests at heart.

You can trust that we will stand with you from start to finish. We handle bankruptcies every day, and nothing surprises us. We provide a welcoming environment where you are treated with respect.


See What We Can Do for You

When you understand all the facts, you are in control. The same goes with bankruptcy. But where you get your information is just as important.

At Cibik & Cataldo, you have our legal team on your side. We take pride in being courteous and professional. Communication is key in a bankruptcy case, so we explain everything and respond to your calls promptly.

To help you get started, we offer a free consultation, which means you can talk to an experienced attorney for free. You’ll understand your position and get the bankruptcy help you need.

We want you to feel secure and confident in your decision to file for bankruptcy and with the law firm you choose to represent you. Call us today at (215)-735-1060 to set up your appointment.  

tax refund


By:Mike Cibik



Can You Keep a Tax Refund After Filing For Chapter 13 Bankruptcy?

When you receive money during financial troubles, it is a relief, and it doesn’t matter where it comes from. Wouldn’t it be great to get a tax refund while you have filed for chapter 13 bankruptcy? Is it even possible? As per the law, any payment that you avail during Chapter 13 Bankruptcy has to be passed on to your creditors.

To be able to protect the tax refund, let’s dig a little deeper and find out more about bankruptcy, tax refunds, and of course, the laws.


All about bankruptcy

It is a fact that not many are aware of bankruptcy basics. For a layman, the term ‘bankrupt’ means one is stripped off all his belongings and properties and that he lands on the street. Thankfully, this is not true, as a person can lead a dignified life even during the process as long as he agrees to pay off the debt. That is why there are different chapters. For individuals, there are four; which are Chapter 7, 11, 12 and 13.

Among these, Chapter 13 is the most commonly filed one. It is more about managing the debt in such a way that it can be paid off in a period of time, via installments.


Tax refund and Chapter 13

When you file for Chapter 13, your creditors cannot initiate any forceful recovery of the debt. At the same time, you will be granted a certain amount of time to pay off the debt according to a plan. A court-appointed trustee will oversee your payment plan.

Chapter 13 requires you to part with all of your disposable money which then becomes the repayment amount in the plan. Disposable income is the amount that you are left with after paying off your necessary expenses.

The tax refund is regarded as disposable income by the court. There are ways in which you can apply provisions in Chapter 13 so as to be able to keep some or the entire amount that you receive as a tax refund. Talk to a bankruptcy attorney and discuss what your possibilities are.

Every bankruptcy filing is different, and your attorney can advise you of various ways in which you could retain your tax refund.


The first is to change your repayment plan. For this, you need to approach the court and apply for a modification to your plan.  This application has to be submitted every year whenever you receive tax refunds you wish to divert. Your application should state the tax refund details, the amount and also the reason you need the money.

It is important to give a valid reason because the court won’t allow the money to be used for any of your daily expenses. This is because when you agreed on accepting Chapter 13 plan, you have also agreed that you are in a position to foot your daily expenses. If not, then you will no longer be considered to be eligible for the plan.

The grounds on which you can request to excuse the tax refund are repairs for any of your appliance or your car or any sudden medical expenses for your family or self. You can also cite your down payment for a new vehicle but only as a replacement for your old one. At the same time, you need to prove that your old car is beyond repair. If it can be repaired, then you can use your tax refund for the purpose. Funeral expenses are also accepted as a valid reason to retain your tax refund.


The second method is to incorporate that you will not be in a position to include your tax refunds in the plan from the start. Even in this case, you will need a strong reason. You can include the amount as a part of income and expenses. But again, this may not be accepted as a valid reason because the court may not accept your tax refunds as your income.

There are also those who agree to pay the entire debt without considering the tax refund. In that case, the court does not lay strict provisions and allows you to keep the refund.

Another way is to let the refund you have received to be accepted as the tax for the next year. This can be done, and you can continue to do so till you pay off the debt and are out of bankruptcy.


Contact Cibik & Cataldo at 215-735-1060 to speak with one of our experienced attorneys and to find out how you can keep your tax refund dollars to yourself.