many different people standing together


By:Mike Cibik


What Kind of People Get Rid of Debts When They File for Bankruptcy?

My office focuses on consumer bankruptcy. As an attorney in an urban community, I am often asked about my clients and how folks can just walk away from debts. I am asked how I can sleep at night, knowing I have assisted folks with getting rid of creditors. My answer is:  “I sleep quite well, thank you!” and “the kinds of people you work for, work with, go to church with, marry, all kinds of people file bankruptcy.”


There are many articles about celebrities who have filed for bankruptcy, and many articles on this site about famous folks who have filed for bankruptcy protection. But, for every celebrity, there are many other folks who live quiet lives of desperation, who worry about what will happen when the bankruptcy petition is filed, whether they should file a Chapter 13 or a Chapter 7, or the bigger question: How they will pay for the process. Who are they?


Recently, I met with a couple who cleared six figures – but their child had been life-flighted to a major urban area twice for specialized care at a children’s hospital. Their insurance wouldn’t cover an $80,000 life-flight bill. And they had no hope of paying for it, as one parent had to now stay home to care for the child, and there would be continued weekly trips back to the urban center for treatment.


Also recently, I met with an 80-year old woman whose social security was being administratively garnished by a government agency and who was left with approximately $890 to pay her rent, food, utilities, and medications not covered by Medicare. Not surprisingly, she lost her apartment. Did the garnishing government agency care?  Nope.


I see folks from all walks of life – the line worker to the president of the company to the manager. None of them are happy to see me or want to be in my office.


The team at Cibik & Cataldo P.C., are here for you in your time of need. If you or someone you know is having financial problems, stop worrying and call Mike Cibik at (215) 735-1060 for a free consultation.

close up view of the front of a chip credit card


By:Mike Cibik


Having a credit card is a matter of convenience. It enables and empowers you to make investments and buy things for which you are not required to pay up front. However, a credit card is a powerful financial tool, which needs to be used with care to prevent financial damages.


So, when you consider the option of opening a new credit card account, there are several factors that must be taken into account. Again, if you have ever filed bankruptcy, getting a credit card after such an episode, would require considerations of a different level altogether.


So, before understanding bankruptcy related after effects on procuring a credit card, let us look into some general considerations before choosing a credit card:


To begin with, your spending habit is the foremost thing to consider. Choose your credit card based on whether you are going to pay the entire bill every month, carry a balance or use it as a go-to-card for most of your buying needs.


Every credit card comes with an interest rate or what is called an annual percentage rate(APR). Now, even when you choose a credit card with a fixed rate of interest instead of a variable one, be aware that this rate can change in the long run. Also, the interest rates increase every time you spend over your credit limit or make late payments.


There is simply no dearth of fees and penalties when it comes to owning a credit card. Apart from the fees for transactions, there are charges on balance transfers, cash advances and so on. Issuers often keep asking you to increase your credit limit and make a payment by phone.


Balance computation is another trick you should be aware of. If you are going to carry forward a balance, take note of how this charge is calculated. The most common method involves adding together the daily balances and then dividing the sum by the number of days in the billing cycle. In this regard, avoid cards that compute the balance using two billing cycles.


Credit cards come with incentives and reward programs, which are beneficial. However, look for restrictions or expiry date of the programs so that you don’t end up losing your hard earned points. There can be certain limits on how many points you can earn, which should be considered carefully as well.


Getting a Credit Card after Bankruptcy


Applying for a credit card after filing bankruptcy should be discussed with your Philadelphia bankruptcy attorney. Filing a chapter 7 lowers your credit score to a certain extent, which remains the same for ten years from the date of filing the bankruptcy. However, in such a situation, it is not impossible or undesirable to open a new credit card account, only if you consider the following aspects:


Make sure that you have corrected your spending habits and can now, do justice to the financial power that a credit card offers you. If you consult your bankruptcy attorney, he/she might still be against the idea but it is you who have to ensure that there will be no further debt.


Adjust your expectations and know that the credit card facilities you earlier had will not be available now. The cards with higher credit limits and lower interest rates are reserved for customers with good credit score. In fact, your attorney might ask you to avoid applying for cards that you included in your bankruptcy. The simple reason is that these companies might deny your credit card application concerning your financial history.


You can consider applying for a secured credit card, which requires you to deposit the credit limit. After bankruptcy, it is more likely for you to get approved for these cards. These cards are considered less risky by the credit card issuing company or bank. Also, these can help you keep track of your expenses and check your spending habits at the same time.


Above all, if you are applying for a credit card after bankruptcy, make sure seeking the approval and guidance of your bankruptcy lawyer to avoid uncalled for situations from arising in future. If you would like to discuss filing for bankruptcy, the pro’s and con’s do give us a call at 215-735-1060.

man holding open an empty wallet over his laptop


By:Mike Cibik


Dealing with debt can be one of the hardest things one has to face. While you save up every last cent to pay off your bills, you might find that your wages in your bank account are suddenly being garnished.


What do you mean by wage garnishment?


Sometimes a creditor can get access to your wages or bank account to get a debt paid. This access is granted only after he files a lawsuit against you and obtains a judgment. Once the court enters a judgment against you, you will have a fixed period of time to appeal the judgment order.


After the time period lapses, the creditor can request the court to issue a turnover order to any entity that has control over any money owed to you, mainly an employer or a bank.


There are a few creditors who gets an exception from having to attain a court order. These include government agencies such as student loans, taxes, child support. It is mandatory that they notify you of their intent before they begin the garnishment.


There is, of course, a limit to how much a creditor is allowed to garnish from your wages which is mostly up to 25% of the employee’s disposable earnings. But in cases where your income and bills are around the same amount, the slightest deficit can make a huge difference. You will be left with not enough money to pay off other debts like your mortgage, auto payments, utility bills while risking repossession.


Garnishment usually continues until the debt is paid in full with interest. Sometimes, the garnishment gets blocked because the depositor will try and prevent access by closing the account and opening a new one unknown to the creditor. Garnishment also varies by state, so it is important to have the help of a professional to figure out how much would be taken away from you.


A good Philadelphia bankruptcy attorney will be able to tell you that the best way to tackle wage garnishment is to file for bankruptcy. Understanding bankruptcy and its repercussions is an important first step.


Bankruptcy and wage garnishment


Bankruptcy is a legal proceeding involving a person or business that is unable to repay outstanding debts. Filing for bankruptcy is one of the best ways to put an end to wage garnishment. When you file for bankruptcy, an automatic stay goes into effect as soon as the court receives your petition. Automatic in the sense it does not require you to get a court hearing or order but merely filing the petition will initiate the stay.


This will prevent creditors from collecting money from your bank account. They will not be allowed to call or contact you in any way. They cannot sue you. In case they had already filed a lawsuit against you, they cannot use that judgement. Bankruptcy renders the creditors zero power over your wages.


If you had received any sort of notification that the creditor plans to garnish your wages, immediately filing for bankruptcy can stop your money from being taken away. It is crucial that you inform your creditor and employer about the bankruptcy petition. With the automatic stay in order, the creditors will have to stay put till the bankruptcy case is over.


There are some rare cases where the automatic stay gets nullified before its validity period over only there is a very valid reason. And if the debt is so large that it is still existent even after the bankruptcy period, then the automatic stay expires, and the garnishment restarts again. However, any sort of wage garnishments will stop at least temporarily by a bankruptcy filing.


Once the automatic stay goes into effect, the employer should cease taking garnished funds from your account. If he fails to do so, consult a good bankruptcy attorney about filing (or threatening to file) a motion in bankruptcy court so as to make the creditor pay for his illegal behavior. In such cases, the employer or the bank could be liable to you for damages.


The period of your automatic stay can vary. If you have filed for bankruptcy previously, then the stay will be quite short. If you had filed for bankruptcy less than a year ago, then the bankruptcy period will only be 30 days. If you had filed for bankruptcy multiple times in the previous year, then you will not receive a judgment for an automatic stay.


Domestic obligation rules such as child support or alimony payments are the only exceptions to this rule. Filing for bankruptcy will not affect the garnishment of these obligations.


At the law offices of Cibik & Cataldo P.C, we are ready to help protect you from wage garnishment, and give you the legal representation that you need.If you are concerned about your wages being garnished, talk to one of our bankruptcy lawyers at 215-735-1060.

eviction notice on door to old house


By:Mike Cibik


If I File for Bankruptcy, Will it Stop My Eviction? Here are the Facts:


There are many times when an individual is faced with serious financial troubles and ends up with a pile of debt. In such situations, if you have been unable to pay your house rent for a considerable period, the worst that can happen is getting an eviction notice from your landlord. Now, the prospect of becoming homeless is threatening enough to put you under extreme anxiety.


Going the legal way is the only possible means of trying to come out of the situation and it is here that you could consider filing for a bankruptcy without delay.


Bankruptcy is a process of relieving you from your debts by preventing creditors from pursuing you further for debt repayment. It involves liquidation of your assets and giving you a scope for a fresh start. With regards to eviction also, bankruptcy can help. If you file for bankruptcy, let’s see as to how and to what extent it can stop an eviction.


How Can Bankruptcy Help in Delaying an Eviction?


At the very initial stage, let us say that a bankruptcy can delay the process of eviction if not stop it entirely. Just as a bankruptcy is filed with the help of a qualified bankruptcy lawyer, the court issues an automatic stay order.


This automatic stay order immediately stops the bill collectors from either contacting you or collecting payments from you. The automatic stay order also puts a hold on the pending lawsuits against you. As such, you might be having active eviction proceeding against you at that point of time but the automatic stay order will pause your eviction case as well. This stay order remains active for as long as the bankruptcy proceedings are going on.


What If There is a Motion for Relief?


While you can file for bankruptcy and stop the eviction case with an automatic stay order, your landlord too can choose to fight back. As a creditor, he can file a motion granting relief from the automatic stay. A relief would no longer prevent him from collecting payments from you.


Once this motion for relief is filed, you are required to respond and explain your side of the story. Court proceedings follow and if the verdict is in the favor of your landlord, then you have no other way but to continue with the eviction case.


How Important is Timeline in Bankruptcy & Eviction?


The extent to which you can stop an eviction process by filing for a bankruptcy largely depends on when you file it. Now, if the landlord has already been awarded a judgment of possession against you after filing the eviction case in court, there is not much that your bankruptcy filing can do.


This is because, with the judgment of possession, your landlord becomes entitled to ignore the automatic stay and go ahead with the collections. It is for this very reason that bankruptcy lawyers always suggest filing bankruptcy as early as possible for it to be effective in your case.


Does Filing for Bankruptcy Discharge Unpaid Rent?


Discharge of unpaid rent can be possible depending on which chapter of bankruptcy you file. In a bankruptcy, chapter 13 specifically, the unpaid rent is usually added to your repayment plan. For instance, your payment amount is reduced or your time period is stretched over a longer one, making it easier for you to afford the payment.


In chapter 7 bankruptcy, on the other hand, it is likely that your unpaid rent is completely discharged, leading to this debt getting entirely erased. This is possible because chapter 7 involves a discharge of all your debts by selling off your assets to pay the secured debts that cannot be forgiven.


Why Is It Necessary to Consult a Bankruptcy Attorney?


Filing for bankruptcy is a complex legal procedure that considers several aspects of a situation. So, when you think of filing for bankruptcy, you should waste no time in seeking the advice of a bankruptcy attorney.


An attorney can analyze your financial situation, go through the nuances of your case and come up with the best- possible way of dealing with the crisis. He/she can prepare and put forward the case in a way that maximizes its chances of success. The Philadelphia bankruptcy attorneys understand your dire situation and are ever willing to help you overcome the financial crisis.


For a free consultation with our bankruptcy lawyers give us a call at 215-735-1060.

phone showing a good credit score of 811


By:Mike Cibik


Ways to Quickly Improve Your Credit Score, From a Bankruptcy Lawyer


Your credit score indicates the difference between being approved or denied for a credit card or a loan on a high or low rate of interest. A good credit score plays an important role in securing a mortgage or property for you, getting your loan for the car or any other asset or to get a job.


The credit scoring model considers certain factors more closely, such as a debt owed and payment history. If you are struggling with debt and trying to manage your finances right, the following ways can help you improve your credit score quickly.


Analyze the Errors on Your Credit Report


You must get a copy of your credit report every year with a request which does not affect your score. Once you get the report, check it for errors as errors on the report are common which may seriously lower the score on your credit.


You must particularly check and ensure that no late payments are incorrectly reflecting on any of your accounts. Also, the owed amounts on any of your open accounts are accurate. If you detect any error in the report, you must dispute it with credit bureaus. They will then, work with you on the disputes and rectify the errors if any.


File for Bankruptcy


If you are under pressure to pay your outstanding loans or utility and credit card bills, you may consider filing for bankruptcy. While bankruptcy gives an option to start afresh financially, not everyone qualifies for it.


Understanding bankruptcy clearly is also important, as this will get recorded on your credit history. If you are stuck and willing to improve your credit score, seek advice from an experienced bankruptcy attorney and make life easier.


What Affects Credit Score?


Missed payments, regular late payments, and huge debt balances contribute heavily towards plummeting your credit score. Usually, a lot of consumers who carry huge balances already have low credit scores. If they are still unable to pay the debt, for whatever reason, the chances to improve credit score becomes all the more difficult.


Payment Reminders


Timely credit payments can help you largely in improving your credit scores. You may ask your bank to send you payment reminders through text message or an email whenever the payment is due. It is also advisable that you enroll yourself in automatic payments via your credit card.


This will also facilitate your loan payments being automatically debited from the bank account. However, you must ensure that your bank has sufficient money for such automatic payments.


Diminish your Debt Amount


This may sound little unachievable, however, diminishing the outstanding debt amount can greatly help in improving your credit score. You must immediately stop using your credit cards too often.  Make a list of all your accounts using your credit report and check your recent statements to know how much you need to pay on each account.


Make a payment plan allowing a major part of your existing budget for payments towards all primary interest cards, and maintain an assured payment on other accounts.


Do You Know The 30 Percent Rule?


The 30% rule stated by the credit companies expects you to stay under 30% of the credit limit assigned. If you go beyond 30%, your credit score may diminish. This would happen even if you make payments every month. If it is not feasible for you to stay under 30%, you must consider making a series of payments during the month for lowering the amount you’ve spent.


Increasing Credit Limit


If paying down your balances seems difficult, you may consider increasing your credit limit.  This will improve your credit utilization rate, provided you don’t start spending immediately. This is a better option than applying for new credit cards. You must also be mindful not to close any credit card accounts, despite their non-usability as these can help recover your credit score without costing you anything.


It’s important to know that mending bad credit takes time and there is no shortcut to repair a credit score. In fact, quick-fix attempts may do more harm than good. Thus, beware of any suggestion that claims to recover your credit score instantly. There is no alternative to managing your credit responsibly over time. If you are still confused, and looking to improve your credit scores, you should talk to a Philadelphia bankruptcy attorney at 215-735-1060.

stressed out man hunched over a computer


By:Mike Cibik

How to Make Understanding the Bankruptcy Process Less Painful


Many think that bankruptcy process is one of the most complicated processes if one has to ever deal with it. It’s true that a lot of people make critical errors and mismanage their finances due to lack of knowledge of the bankruptcy process. While bankruptcy is a wonderful solution to liberate you from all the debts, the entire procedure of declaring bankruptcy may be quite challenging for the uninitiated. Proper planning, research, and preparation are important for filing bankruptcy successfully. Here are some steps for making the bankruptcy process less painful.


Assess your Situation


First of all, you must be able to analyze the amount of debt you have and the number of bills you can’t pay, which is piling up on your already outstanding debt. If you find yourself in a situation where you receive repeated phone calls to pay off your bills, consider filing for bankruptcy. Understanding bankruptcy is very crucial in order to file for a suitable chapter of bankruptcy. You must consult an experienced Philadelphia bankruptcy lawyer who can give you the best guidance.


Find an Experienced Bankruptcy Attorney


Finding a good bankruptcy lawyer is one of the most challenging tasks as an experienced lawyer can give you the best advice. In order to ensure a successful result, you must consider hiring a board-certified bankruptcy attorney as they have knowledge and expertise to handle bankruptcy cases.


Hiring a bankruptcy lawyer who promises you that he will be cheap may cost you more in the future. A certified Philadelphia Bankruptcy lawyer would not only strengthen your case in court but would also give you useful suggestions keeping your best interests in mind.


Preliminary Consultation


At the initial stage of the consultation, your bankruptcy lawyer would collect all the information that they require from you. You can also get your queries answered so that you understand bankruptcy nuances better. You must also submit your credit report and the list of your creditors, last 2 years taxes, 6 months of salary slips, and an accomplished education certificate while filing for bankruptcy. This information would help your bankruptcy attorney to ascertain whether bankruptcy will help in your case or not.


341 Meeting Notice


After the bankruptcy case is filed, you will have to wait until you get a notice on 341 meeting. Usually, at the meeting, the bankruptcy trustee will consider all the paperwork and ascertain that the papers are accurate. The trustee may also ask you questions about your current financial position, your life and assets accumulated. These are the bankruptcy formalities which need to be fulfilled before the next step can be taken.


Other Crucial Steps to Make the Procedure Less Complicated


Keep Paying the Mortgage or Other Loan Installments.


It is also important for you to understand whether you should file for Chapter 13 or Chapter 7 bankruptcy for proper remediation of your situation. If you wish to keep your car or home you must continue paying on the secured loans. You don’t want to give your creditors any grounds to foreclose or repossess. You would also be able to pay off the past payments if you file bankruptcy under Chapter 13 plan.


File Taxes


It is always advisable that you should file the taxes before you file for bankruptcy. In case you file the tax returns on time, your bankruptcy may be discharged.




Bankruptcy law would require you to disclose all your assets and debts with utmost honesty. You must organize all your finance related documents before you visit a Philadelphia bankruptcy lawyer. Keeping all the paperwork organized would save you money and time as well as help your bankruptcy attorney to prepare a strong case.


Many people try to hide their assets which result in discharging of their case or the imposition of a penalty and imprisonment in worst cases. Thus, you should declare all your debts and assets and hide nothing from your attorney.


Bankruptcy is the process that helps people and businesses prevail over an extreme financial condition where it gets impossible to pay their bills and debts. The core purpose of bankruptcy is to help taxpayers and law-abiding citizens get a hassle-free exit from their financial chaos and get a fresh start. Consult one of our experienced bankruptcy attorneys at Cibik & Cataldo P.C. immediately at 215-735-1060 to get yourself out of the financial mess and start afresh.

debt relief written on a keyboard


By:Mike Cibik


Philadelphia Bankruptcy Attorney: Do I Need Debt Relief or Bankruptcy?

The financial situation of an individual or an organization does not remain the same way for years. Sometimes, it gets better, and at other times, there could be a downturn leading to subsequent debt. The reasons behind debt can be many like unemployment, a sudden change in market trends, overspending and so on.


However, once you are in debt, the best way is to get out of the situation before it goes out of your hands. And in doing so, understanding bankruptcy and debt relief programs are of paramount significance.


The Difference between Debt Relief and Bankruptcy


Both debt relief and bankruptcy are intended to relieve you of your debts and prevent your financial situation from worsening. However, they work in different ways. Debt relief is about the reorganization of your debts in any shape or form that ultimately provides you with full or partial measure of relief. Bankruptcy, on the other hand, is a measure taken to stop the creditors from further pursuing you for the repayment of debts.


While chapter 7 bankruptcy involves liquidation of assets to pay back the creditors, chapter 13 bankruptcy is filed by those who can still repay a part of their debts through a repayment plan.


Both debt relief programs and bankruptcy have their share of advantages and disadvantages. To understand which process suits your situation the best, it is important to have a detailed look at the pros and cons of each.


Debt Relief: Positive and Negative Sides


A debt relief program is basically a plan that aims to reorganize your debts. It can take several forms, for example reducing the outstanding principal amount, lowering the interest rate on loans and so on. Debt relief has the following advantages:


  • With a debt relief program, you can negotiate the amounts you owe and eventually lower the amount to only how much you can pay at that moment

  • There impact on your credit score is minimal

  • You are not required to avoid the creditors but instead, keep collaborating with them and arrive at a mutually beneficial term


That being said, debt relief programs can make you suffer the following negative consequences as well:


  • Your creditors may not be ready to accept a lower amount and can decide to stop working with you until the entire debt is paid

  • A wrong choice of the debt relief program can actually make you end up in higher debts because of company fees etc.


Bankruptcy: Positive and Negative Sides


Bankruptcy is certainly a full-proof way of managing your debts in spite of it involving complex legal procedures, best handled by the Philadelphia bankruptcy lawyers. So, here are some of the advantages of bankruptcy for you:


  • A bankruptcy works as soon as it is filed and the chapter 7 bankruptcy, can actually help you get rid of your debts in as few as 4 months

  • Filing a bankruptcy means stopping creditors from asking repayments and therefore, it ensures that you are not required to take harassment calls or threats from your creditors

  • Bankruptcy gives individuals and organizations a fresh financial start whereby, the earlier mistakes can be avoided and steps can be taken for a sound financial future


While bankruptcy helps you in more than one ways, it does have consequences like:


  • When you file for a bankruptcy, it is bound to affect your credit score. A lower credit score can create problems for you when applying for a loan


  • Bankruptcy involves the liquidation of assets to pay the creditors and wipe you out off your debts. Now, this also means loss of some of your valued possessions like car, property, etc


  • Lastly, it is not always easy to qualify for a bankruptcy and as in many cases; your application can be rejected by the court


However, it is with respect to finding out whether you qualify, and what’s the best course of action, that you should always seek the guidance of a bankruptcy attorney in Philadelphia.


As you can tell, bankruptcy laws are complicated. Your case will depend on the state laws, your income, what kind of loans you have and so forth. So if you’re looking to consult a bankruptcy attorney in Philadelphia, give us a call at 215-735-1060 or fill out our online contact form to book your free consultation today.

bankruptcy lawyers having team meeting in law firm


By:Mike Cibik


What Characteristics Should I Look for in a Bankruptcy Attorney?


It is estimated that in the US, each year, at least hundreds of thousands of people file for bankruptcy, in 2016 the number was 800,000. Being a specialized area, it is a field that requires specialist knowledge. Hence proper legal advice matters if you are deciding to file for bankruptcy.


The decision to file for bankruptcy is a serious issue requiring expert guidance to resolve the matter in the best possible manner. An experienced bankruptcy attorney can help you through the complex process. At the same time, just because you are desperate and helpless, try not to hire the first lawyer you talk to.


We’ve put together the 7 factors that you should be looking for when you are choosing a lawyer to help with your bankruptcy case.


Expertise: An in-depth knowledge of bankruptcy law is one of the primary requisites for a bankruptcy lawyer. They should also be updated on all new amendments in their field of expertise. For example, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, was a major reform for the industry.  It is not as if your case may be affected by the legislation. But your lawyer should be knowledgeable about all the aspects of bankruptcy law to be able to help you.


Experience: Merely choosing a lawyer with two decades of experience or more might not help in bankruptcy cases. Your lawyer should have specific experience in bankruptcy. You should find out how many years they have worked in the industry and also the number of bankruptcy cases they have handled.


You should also, ask about the different Chapter 7 and Chapter 13 cases they have worked on. You need an attorney who is experienced in handling both types, because you may either need one or even both.


Fees: Generally, the cost varies between $1,000 and $3,000. But again, the lawyer fee depends on various factors. Different cases have different requirements and each case is handled in a specific manner. If the attorney you have got in touch with, gives you a flat figure over the phone, then not calling that lawyer again is probably a good idea.


A good lawyer will hear you out, understand your case, give you a detailed view on how to go about and then give you an estimate. Also, if a lawyer quotes a fee much lower than the general going rate, then it could mean he or his firm is just starting out and that they want a case to work on. Their motivation might not be in your best interest.


Reputation: A reputed lawyer will ensure your reputation in case you file for bankruptcy. There are many ways to find such a lawyer. Of course, referrals would be good.


Look for attorneys who are active on social media because it would mean, they are enthusiastic about their job and want to stay connected with clients. You could also check with Better Business Bureau to ensure there aren’t any complaints against your lawyer for being dubious or incompetent.


Also, note that some clients may badmouth their lawyers if the outcome was not in their favor. Thus, investigate sensibly.


Practical: A good lawyer is one who looks out for his client’s best interest. Your lawyer should be able to give you practical solutions rather than follow the same route.


For example, just suggesting that you go for Chapter 7 bankruptcy so that your debts will be discharged completely may not be the right solution for your case.  Your lawyer should study your case and give you alternate provisions so that you can choose one that will also prove to be a solution for your encompassing financial issues.


Passion: As in any other profession, this is a field that requires passion at every step. Bankruptcy lawyers have to be passionate about their work because that is how they can remain ahead of their game. If your lawyer seems lazy or too impatient to answer your queries or has no time to meet with you when required, that is a definite red flag.


Easy relationship: Finally, you can work with someone only if you share an easy camaraderie with the person. You should be able to communicate comfortably with your lawyer who in turn needs to have a patient ear as well as a kind outlook.


When you’re looking for the best Philadelphia bankruptcy lawyer, make sure they tick on the maximum number of the listed factors. Cibik & Cataldo can help you with your bankruptcy case. If you’re looking for a free consultation, give our offices a call at 215-735-1060 to talk to one of our bankruptcy lawyers.

letters spelling out student loan


By:Mike Cibik


Understanding Bankruptcy and What it Does for Student Loan Debt


Are you struggling with student loans? A lot of people do, there’s nothing to be ashamed of. Filing for bankruptcy could help.


It might not get you total relief but enough to get you out of the rut in most cases. But you’ll need to get a clear understanding of student loan clauses in bankruptcy before you decide.


If you can prove that you are not in a position to pay the loan, then you may be able to get the loan discharged. That is why understanding bankruptcy is crucial to you as a student. A bankruptcy attorney can help you not only to get the facts right but also to show you what can be done that’s in your best interest.


The eligibility criteria of banks


There are different ways in which a bank decides if you are eligible for an exception. You will have to prove that you are unable to pay because of undue hardship.


The factors differ from case to case. In some cases, the court may discharge the complete loan or a part of it. It is also possible that the court may disregard your request.


There is the Brunner Test in which you will have to prove that you are in a financially weak position and that if you continue to pay your loan, then you will not be able to maintain a minimal standard of living.


Second, you should tell the court that there is no chance of your financial situation improving in the immediate future. Third, you will have to convince the court that until the time, you have made honest efforts to pay the student loan.


There is also the Totality of the Circumstances Test, wherein the court will come to a conclusion after investigating your past, present and future financial situation and the living expenses required to maintain a basic lifestyle.


There are also various other tests which a bankruptcy lawyer can help you understand. You should go ahead only if you understand all the factors and clauses. Discuss with your attorney the different aspects and look at all your options.


Even if you get a chance on repayment, it could be a huge relief to you. Facing action from loan providers is not only traumatizing but could also get you negative credit ratings in the future.


Discharging student loan under Chapter 13


There is also the option of Chapter 7 bankruptcy, but it could result in your asset liquidation. Also, you do not get any repayment plan. Either your loan may be completely discharged or you will have to pay the entire loan amount.


Thus, Chapter 13 seems to be the better option. Be it a federal government student loan or a bank loan; if you face issues in repaying, then you can file for bankruptcy. To get a discharge, you will have to prove your case.


Both types of loans are considered under bankruptcy.


Please note that you should file for bankruptcy only if you have no other option. If you have availed federal loan, then in case of financial issues, you get help in the form of different government schemes.


Under student loan bankruptcy in Chapter 13, you will get a chance to get a repayment plan so that you get a favorable time period to pay your loans. You also get a stay, in any proceedings the loan provider may be taken against you. The stay remains till the case gets over.


Chapter 13 bankruptcy refers to student loan as nonpriority unsecured debt which means you need to pay only a part of the loan if the court grants you the repayment plan. As your monthly payments will also be reduced, you will get a respite on that front. Also, you get around three to five years period to pay off the loan.


By the end of the case, you will get to accrue some disposable income which can come handy to pay off the balance loan amount.


Contact Us Today


No matter what your loan amount is, if conditions force you to file bankruptcy, you should first consult with Philadelphia bankruptcy lawyers. If you have to appeal against the issue or take any further action, then a lawyer can represent you.

Having a lawyer to assist will help you make informed decisions. If you’re having trouble repaying your student loan, Cibik & Cataldo can help you! Give us a call at 215-735-1060 for a free consultation.

man holding wallet while money flies out


By:Mike Cibik


Beware of These Common Mistakes Should You File For Bankruptcy

You will indeed be amazed to find out that more than 1.5 million Americans file for bankruptcy every year. Recent statistics corroborate these facts that make almost 13% of the population declaring themselves to be broke and in dire need of financial assistance.


The instances are not limited to the poor working man on the street. The celebrities have it equally tough and file for bankruptcy on the regular.


While understanding why people file bankruptcy is imperative before taking the same road, it also helps to remain aware of the problems that may crop up. Do not make haste, therefore.


Wait a while and assess your situation carefully before you initiate the process. It would certainly help to contact a legal professional for understanding bankruptcy and the related nuances instead of inviting trouble.


Remember that the courts will go through your records with a fine-toothed comb in order to ensure that you are a candidate who happens to fit the bill. The financial records going back to a year are usually assessed while giving the go-ahead for bankruptcy. Yet the professional is within his rights to look at specific records that go further back in time if he feels the need to do so.


Here are some pointers to help you. Make sure to read through them and beware of committing the mistakes


  • Credit Cards– They are a luxury. Sometimes, using your credit card can help you make a purchase that you probably don’t have the money to pay for upfront. It’s  best to avoid using the card for buying luxury items once you decide to file for chapter 7 bankruptcy.

    Remember that anything that you buy for more than $650 within 3 months of filing for bankruptcy will be marked as non-dischargeable and would be added to your dues. Taking a cash advance in excess of $850 within 70 days of bankruptcy filing will be treated in a similar fashion. So do lock up your credit card if you want to start anew.


  • Property Transfer– It makes sense to forget about any transfer of your property prior to filing for bankruptcy. You could be penalized for hindering the law or for committing a fraud especially if your property was transferred to a family member or an insider.

    You would be well advised against making any major changes to your property too. Chapter 13 bankruptcy can protect your personal property completely, and you do not have to lose your home or vehicle in the process.


  • Retirement Account– It would be best to inquire about the exemptions before you decide to go ahead with the filing. A lawyer could advise you on the best way to keeping your retirement & 401(k) accounts intact. There are ways by which you do not have to liquidate them to pay your creditors before you declare yourself to be bankrupt.


  • Bank Account – The court is certain to be suspicious of fraudulent activities if there is a regular movement of funds from your bank account during ‘look back’ period. Remember that whatever you retain in your personal account is believed to be yours.

    So do not even try to transfer a large amount out of your fund to repay a friend or family member who may have lent you the money without drawing up an agreement. It is best to have only your money in your account and spend it on the necessities before you file for a specific chapter of bankruptcy.


  • Court Appearance – Well, your bankruptcy attorney may take care of the details on your behalf. However, failing to appear in court when a pending case for collection of dues comes up for hearing is not going to show you in the proper light.


The collection case is likely to proceed at its own pace until and unless you file for bankruptcy successfully.


Timing is all important once you decide to declare yourself bankrupt. Make sure to stop all kinds of financial activities for weeks or months as applicable in accordance with the bankruptcy regulations, however.


Get the Help You Need Today

Your attorney will definitely be able to guide you properly at every stage, but you must be completely truthful and lay down all your cards in front of the bankruptcy attorney in order to get the best advice. Cibik & Cataldo P.C. has provided debt-relief services for 35 years to clients throughout Pennsylvania.


Our team specializes in chapter 7 and chapter 13 bankruptcy and will  carefully examine your financial situation, provide you with the facts,and advise you on how to proceed. Please contact us at 215-735-1060 for a free consultation.