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Reasons Why People File for Bankruptcy

Apr 18, 2017 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.


Chapter 7 Bankruptcy: What is it?

Oct 11, 2016 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/.


Should You Buy a Car Prior to Filing Bankruptcy?

Jul 21, 2015 By: Mike Cibik

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


Can I Discharge Tax on Late Filed Returns?

Jul 21, 2015 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…)


Credit Report Errors Cause Higher Interest Rates

Jul 21, 2015 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…)


Can An Illegal Immigrant File For Bankruptcy?

Jul 21, 2015 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…)



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