By:Mike Cibik

Declaring for bankruptcy is never a proud moment, but is a great tactic to get you back on your feet financially.

Filing for bankruptcy can save money and offer peace of mind. There are also the downsides. Bankruptcy is very expensive, takes up a lot of your time. At the end of the day, however, it’s very much worth it.

Here are some reasons why people file for bankruptcy, according to the American Bankruptcy Board Certified attorneys of Cibik & Cataldo PC, who have provided high quality debt relief in Philadelphia for the last 35 years.

Job Loss – Sure, there’s the severance pay, but there’s no guarantee knowing when that new job will come around. Losing a job obviously depletes someone’s savings and assets.

Medical Expenses – Medical expenses make up more than 60 percent of personal bankruptcies in the United States

Credit Debt – Illnesses and disability, job loss, income reduction and emergency expenses are some reasons for credit card debt that doesn’t involve irresponsible spending.

Divorce – A divorce or separation can lead to a huge loss of income and assets for either partner or both. Those lawyer fees add up too.

Overspending – Poor budgeting and not being able to control your spending.

There are two types of bankruptcy that you can file, Chapter 7 or Chapter 13 bankruptcy. A Chapter 7 bankruptcy discharges most types of unsecured debt and the trustee will attempt to sell any nonexempt property in an effort to repay their creditors. Creditors with Chapter 13 bankruptcy, meanwhile, repay creditors through a repayment plan. No property is liquidated under Chapter 13 bankruptcy.

The time frame of  Chapter 7 bankruptcy normally takes about 3-to-4 months to finish, while Chapter 13 bankruptcy can take 3-to-5 years.

We at Cibik & Cataldo PC supply top-notch debt help in Philadelphia, PA, and surrounding areas. To learn more about bankruptcy and the services that the attorneys at Cibik & Cataldo, PA, provide, feel free to check out their website at http://philadelphiabankruptcylawyers.com or give them a call at 215-96-4794. A free consultation contact form can be filled out on the homepage of the website.


By:Mike Cibik

As some of the most trusted bankruptcy attorneys in Philadelphia County, PA, Cibik & Cataldo PC helps individuals and businesses navigate the treacherous waters of bankruptcy. The process of filing can seem extremely tedious and intimidating, but with the guidance of the right attorney, it doesn’t have to be.


There are three common forms of declaring bankruptcy: Chapter 7, Chapter 11 and Chapter 13. In this blog, we’ll be focusing on Chapter 7.


The most identifiable characteristic of Chapter 7 Bankruptcy is that it is a liquidation of assets, versus Chapter 11 or Chapter 13, which are each a reorganization of assets.


Chapter 7 is applicable to both businesses and individuals; however, they are handled differently for each.


For Businesses


For businesses that are badly in debt, a Chapter 7 bankruptcy means that the entire businesses will shut down, unless continued by the Chapter 7 trustee. The trustee is appointed very quickly, and is tasked with examining a business’ financial affairs, dealings and standing. The trustee will then liquidate assets and distribute the liquid capital to creditors. Sometimes, this means that all employees will lose their jobs, for larger businesses, however, entire sections of the company can be sold off to other employers.


In Chapter 7, a corporation does not receive a bankruptcy discharge, the entity is dissolved instead.


For Individuals


Individuals who file for Chapter 7 are allowed to keep certain exempt property. State regulations vary widely on what can and cannot be deemed exempt property (our bankruptcy attorneys in Philadelphia, PA can help determine what can be ruled exempt). Assets that are not exempt are sold by a Chapter 7 trustee and then liquid capital is used to pay creditors. Many types of debt can be discharged by Chapter 7, however, not every type is. Common exceptions to debt discharges include child support, income taxes less than 3 years old, some student loans, restitution for any crimes committed and other types of debt.


Chapter 7 bankruptcy can stay on a credit report for up to a decade, however, some who file find that to be less detrimental than the outstanding debts they had.


When considering filing bankruptcy there are a number of factors to consider. However daunting debt may seem, the attorneys at Cibik & Cataldo can help determine the best course of action to move forward from the debt that holds a business or individual back. To learn more or schedule a free consultation, visit https://www.philadelphiabankruptcylawyers.com/.


By:Mike Cibik

You may want to consider buying a car prior to filing your Chapter 13 bankruptcy case. (more…)

By:Mike Cibik

Bankruptcy can discharge income tax if certain conditions are met.  One required condition is that returns must have been filed.  Some bankruptcy courts have recently taken the position that a return filed after the statutory deadline does not qualify as a return for the purpose of bankruptcy discharge.  (more…)

By:Mike Cibik

After filing bankruptcy people are often interested in trying to rebuild their credit, and a Chapter 7 or Chapter 13 bankruptcy can be a good first step to repairing your credit. The information contained in your credit report is important and that information must be accurate. Credit reporting agencies (CRA) such as Experian, Equifax and Transunion are the gate keepers between you and potential lenders. (more…)

By:Mike Cibik

An illegal immigrant can file for bankruptcy in the United States.  There is no reference to a citizenship requirement in the Bankruptcy Law.  US Code §109 provides the requirements to be a “debtor.” (more…)

By:Mike Cibik

A chapter 13 bankruptcy is a plan to re-organize a debtor’s liabilities and get a fresh start unburdened by mounting unsecured debt (credit cards, medical bills, etc.). Such a plan requires payments to a bankruptcy trustee or administer. But how much are those payments? (more…)

By:Mike Cibik

Corporations and LLC’s don’t get a discharge in a Chapter 7 bankruptcy, so what’s the point of filing? Ensuring that business assets go to pay payroll, benefits, and taxes is a compelling reason. (more…)

By:Mike Cibik

1. STRESS: Being deep in debt, receiving harassing calls from creditors, being threatened with garnishment, repossessions and foreclosure will often cause you and your spouse to experience overwhelming stress and anxiety. Your children, even young ones, also feel the stress. It affects their school work and their emotional and physical health Uncontrolled debt often leads to marital conflict and divorce. The kids become the biggest losers. Filing for bankruptcy will usually relieve the debt burdens and the stress. This will often save a marriage and restore emotional as well as financial security for the entire family.

2. PROVIDING FOR YOUR FAMILY: When you’re paying out all of your income to try to cover your minimum debt payments, you often have difficulty paying for even life’s basic necessities. The little extras that mean so much to children, such as music lessons, dance lessons, tutoring, summer camp and regular health exams, are often neglected. After filing for bankruptcy, your family budget can afford to give your children much of the nourishment they need to grow into healthy and well adjusted adults.

3. EDUCATIONAL EXPENSES: When you are having financial difficulty, it is often difficult to properly afford your children’s educational expenses. In the 2005 changes to the bankruptcy law Congress specifically allowed parents to include in their allowable expenses some educational costs for their children under 18 years old. For older children, however, Congress felt that paying college tuition at the expense of unsecured creditors should not be allowed.

4. STUDENT LOANS: Several factors should be considered regarding student loans. First, student loans, including parent PLUS loans, are generally not dischargeable in bankruptcy without a showing of undue hardship. The burden to prove undue hardship is very great. Second, if you are in financial difficulty, you may not have a high enough credit score to get a parent loan to help your child pay for college. So if you are having debt problems when your children are still several years away from going to college, you should consider filing bankruptcy to wipe out your debts, so that you have more money available to help out your college bound kids, and your credit score can recover by the time you have to get loans to help your kids pay for college.

5. CO-OWNERSHIP AND COSIGNED LOANS: Many parents want to try to help out by setting up joint bank accounts with their minor children. If you have done this, and then file for bankruptcy, you may find that your bankruptcy trustee attempts to seize the bank account and use it to pay towards your creditors. There are ways to set up accounts to prevent this from happening. Similarly, if you cosign a loan for your child to help them out, if they ever get into financial difficulty and have to file bankruptcy, your credit score will be negatively affected and you will be hounded to pay the bill.

By:Mike Cibik

I’ll admit that most of my clients never wanted to come see me. Most of my clients are embarrassed by the fact that they even have to ask about filing bankruptcy. Struggling with debt is hard and it can literally suck the life right out of you. For most, it seems like the end of the world. (more…)