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Can You Cancel or Annul Your Bankruptcy Filing?

The short answer to this question is “no,” you cannot cancel your bankruptcy filing and somehow undo the process. You may be able to dismiss your case, or your case may be dismissed by the court, but a dismissal is not the same thing as undoing the process. In other words, you cannot annul your bankruptcy filing like you might annul a marriage. When you file your bankruptcy petition, a public record is created about your filing. At a minimum, your name and the last 4 digits of your Social Security number will be associated with a bankruptcy case number. This bankruptcy case filing will be picked up by one or more of the credit bureaus and under federal law, your bankruptcy case number will remain on your credit profile for up to 10 years. If you file bankruptcy and change your mind, it may be possible to dismiss your case or allow your case to be dismissed, but, again, a dismissal does not remove the evidence of your filing from the public record or from your credit report. Your ability to voluntarily dismiss your bankruptcy case will depend on whether you filed a Chapter 7 or 13. As a general rule, the Bankruptcy Code allows you to voluntarily dismiss your Chapter 13, although you should never do so without the benefit of counsel. You cannot voluntarily dismiss Chapter 7 without specific approval of the judge in your case and if you schedule non-exempt assets (or if the trustee suspects you have non-exempt assets), you may be forced to remain in your bankruptcy case even if you want out.

08 December, 2025

Does it Make a Difference if I File Bankruptcy Before the End of the Month?

If your income is above the median income for your household size, you must complete a “means test” when you file your bankruptcy petition. To determine whether you are above or below the median income, your gross income for the six month period prior to the month you file bankruptcy is considered. So if you file October 31, the six month period under examination is April through September. If you file, November 1, the six month period excludes April but adds October. If you get the exact same paycheck each payday, this won’t make a difference. But what if you got a lump sum bonus or a retroactive pay raise in one of your October paychecks? In that case, you could be under the median today, but well over it November 1. Some income may not need to be included in determining median income. Social Security income, for example, is excluded. Just because you are over the median income and have to complete the means test, it doesn’t necessarily mean that you can’t file a Chapter 7. Be sure to work with an experienced bankruptcy lawyer to see what your best options are.

08 December, 2025

Should I Be Worried About Going To My Meeting of Creditors?

After you file a bankruptcy case, you are required to attend a meeting of creditors. This is scheduled for about a month after your petition is filed, and is usually the only appearance you will need to make during the bankruptcy process. Your attorney should prepare your bankruptcy petition and schedules with plenty of attention to detail and accuracy. Before you sign your petition, you should carefully review it and correct any items that are incorrect or incomplete. At the meeting of creditors, the bankruptcy trustee will ask you some questions which you will answer under oath. Tell the truth. Listen to the question. Let the trustee finish before you start speaking. Answer in as few words as possible. The trustee will already know much about your financial affairs. Before your scheduled meeting, your attorney sends the trustee several documents. Prior to the meeting the trustee has reviewed your deed, mortgage, vehicle titles, and your most recent tax returns, in addition to your bankruptcy petition and schedules. So when you meet with the trustee, s/he may not have many question for you other than “When you signed your bankruptcy petition and schedules did you review them? And were they true and accurate? Were there any errors or omissions?” You may be asked if you had sold any property in the last few years, or how much of a tax refund you expect to get. The trustee could ask if you have suffered any injuries that you could sue someone for, or if you expect to receive an inheritance. The trustee will also discuss with you what will happen to any property you own that is not protected by an exemption. The meeting of creditors often takes less than ½ hour.

08 December, 2025

Bankruptcy Won’t Stop the Calls?

This is NOT true. In fact, nothing could be further from the truth. The minute you file bankruptcy, the Bankruptcy Court issues an order telling all of your creditors to leave you alone. No more phone calls. No more collection letters. No more lawsuits. No garnishments. No repossessions. No foreclosures. Nothing. No actions whatsoever against you or your assets. This order has a name. It is called the “Automatic Stay,” and it is issued pursuant to Title 11 of the United States Code, Section 362. The Automatic Stay prohibits your creditors from taking any action that could be considered an attempt to collect a debt form you or your assets. Once you file bankruptcy, the creditor is not even allowed to call you or send you letters. In addition, the creditor must stop any collection attempts already started. The Automatic Stay is very powerful, and puts the full weight of the United States Courts to work for you, to make sure your creditors leave you and your assets alone. If a creditor violates the Automatic Stay, you have the right to bring the creditor before the Court for Contempt of Court, and to be compensated accordingly. This is not a hollow right. Bankruptcy Court Judges do not take kindly to creditors who ignore their Order-the Automatic Stay-and these Judges have been known to punish creditors severely. Very simply, once you file for bankruptcy, creditors must leave you alone or suffer the consequences.

08 December, 2025

What is the Wild Card Exemption?

There exists something referred to as the “wild card” exemption. This is a very useful exemption and what allows most bankruptcy debtors to keep all their property. Section 522(d) of the Bankruptcy Code states, in relevant part: The following property may be exempted […] (1) The debtor’s aggregate interest, not to exceed $22,975 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor. [….] (5) The debtor’s aggregate interest in any property, not to exceed in value $1,225 plus up to $11,500 of any unused amount of the exemption provided under paragraph (1) of this subsection. Subsection (5) is the wild card exemption. These two subsections work together to allow the debtor who doesn’t use the so-called federal homestead to exempt almost $13,000 in “any property”. This, coupled with the other asset-specific exemptions found elsewhere in Section 522, usually allows a debtor to exempt all his property in bankruptcy.

08 December, 2025

Are There Any Federal Bankruptcy Insurance Exemptions?

There are two main federal bankruptcy exemptions for “unmatured” insurance contracts; 11 U.S.C. § 522(d)(7) and (d)(8): (7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract. (8) The debtor’s aggregate interest, not to exceed in value $11,525 less any amount of property of the estate transferred in the manner specified in section 542(d) of this title, in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent. So, what’s the bottom line of these exemptions? First, an unmatured life insurance contract is one in which the insured person hasn’t died yet. These insurance exemptions have at times provoked controversy, but the gist is that subsection 7 protects the basic insurance contract, i.e. the right to receive proceeds on the death of the insured. Consequently, it is a good idea to claim an exemption in any term life policy under this subsection so that if the insured dies within a period which would give the bankruptcy estate an interest in the proceeds-for example, in the 180 days after the filing of the petition-these proceeds would be exempted without need to resort to the alternative exemption for life insurance proceeds under subsection 11 of Section 522 (which includes a reasonableness cap). Similarly, the basic insurance contract of a whole life situation should also be exempted with subsection 7, but since a whole life policy has an additional facet to them, a savings or cash surrender value, this additional value is addressed in subsection 8. Subsection 8 provides an exemption for this cash value but a monetary cap of the amount that can be exempted in bankruptcy. It is important to note that, depending on the other property of the debtor, it may be possible to exempt additional value under the “wildcard” exemption, but the current $12,250 is the only insurance-specific exemption for whole life cash value.

08 December, 2025

Can A Bankruptcy Continue After Death Of Debtor?

One of Benjamin Franklin’s most famous quotes is: “Certainty? In this world nothing is certain but death and taxes.” However, the death of a Debtor does not automatically meant the death of his or her case. The Bankruptcy Code permits the continuation of both Chapter 7 and Chapter 13 cases after a death. Federal Rule of Bankruptcy Procedure 1016 deals with the issue of the death or incompetency of a Debtor. Rule 1016 permits the continued administration of a Chapter 7 case “…in the same manner, so far as possible, as though the death or incompetency had not occurred.” Likewise, in a Chapter 13 reorganization, the case can continue to be administered if it is in the best interest of the parties. The ability to get a discharge of debts in a Chapter 7 can be a tremendous benefit to the deceased heirs of an estate, since they would be able to assume the assets of the deceased person without having to assume the debts. In Chapter 13, the ability to continue with the case can be more difficult because of the fact that the payment of debts through the Plan will almost always have been based on the Debtor’s own income which will no longer be available. However, sometimes a family member or members may wish to come forward to fund the Plan. This is particularly true where the bankruptcy may have been filed to address an arrearage on real estate or to stop a foreclosure. By continuing with the 13, the family member(s) may be able to pay out the arrearage to keep the house, or obtain refinancing to pay off the home loan.

08 December, 2025

What Are The Risks of Co-Signing A Loan?

Co-signing a loan is a dangerous thing. Too many people end up in bankruptcy due to debts they just co-signed for, so here are a few points worth considering before co-signing for a friend or family member. There is a reason they need a co-signor. A professional lender does not think they will pay the money back. An objective professional (or underwriting standards) arrived at this judgment. Why do you think you know differently? If they do not pay or miss payments, it will affect your credit. The fact that the debt exists and you are liable for it, in itself, will affect your credit and will limit the amount of other debt you can contract due to your debt/income ratio. The lender can pursue the co-signor in court, getting a judgment and attaching the co-signor’s property. This is a real shocker for most people, and I’ve had many, many conversations with people in some stage of disbelief that they, and not the person who they co-signed for, is getting chased for the debt. However, the truth is that the co-signor is usually better off financially than the primary obligor and, consequently, is a more attractive target for a creditor. Unless you agree otherwise with the lender, you may not even know if the primary obligor misses payments. They may be afraid to tell you while you are accruing mounting interest and late fees. Co-signing a loan is serious business, and you should think about it as taking on the debt itself, rather than just helping someone out because a creditor is being unreasonable. Once you co-sign a loan it is your debt, and you should ask whether can afford it and really want to take on the responsibility.

08 December, 2025

Mortgage Foreclosures in Pennsylvania Are On the Rise

The current economic situation has put a strain on many people. This is resulting in an increase in mortgage foreclosures. The best way to stop mortgage foreclosures is to work proactively with your bank. So, what is going on with mortgage foreclosures? Mortgage Foreclosures in PA Are On the Rise Foreclosure filings are on the rise across the country. Rates in Philadelphia are only getting worse. In the first half of 2022, foreclosure rates were 134% over the first half of 2021. Pennsylvania ranks 20th in the nation with one in every 1,038 homes being in foreclosure. Part of the rise was caused by banks being more forgiving during the COVID-19 pandemic, and now returning to pre-pandemic expectations. Also potentially contributing are soaring home prices, which may have caused some people to spend over their budget and then find themselves unable to keep up. Pennsylvania sheriff sales are likely to follow as foreclosed homes go on the market. Steps to Take Before a Mortgage Foreclosure So, how can you avoid becoming part of these statistics? Here are some steps you can take: Don’t ignore it. The problem will not go away. As soon as you realize you may have issues paying your mortgage, proactively contact your lender. The last thing a bank wants to do is foreclose. It’s a pain for them to offload the house. They would rather work with you on a payment plan you can keep up with. Make sure to open and respond to all mail from your lender. Again, they don’t want to foreclose, so often initial notices contain resources that might help, and later ones might talk about legal action. Know your rights. Re-read your loan documents so you understand what might happen if you are foreclosed on. Contact a trained lawyer or a housing counselor. Do not contact paid foreclosure prevention companies or companies that claim they can stop mortgage foreclosures instantly; these are typically scams at worst, overly expensive at best. Rework your budget. See what expenses you can cut out without causing hardship, and also look for assets you can sell for cash and opportunities for an extra job or side hustle. These can make a difference and also show your lender that you are serious and willing to make sacrifices. If you have a lot of other debt as well, bankruptcy may be your best option. Typically, your primary home is protected during bankruptcy proceedings and you can lower the costs of your other loans so that you can keep paying your mortgage. Short selling is an option if you are willing to move. Consider your other housing options before selling, however. You can also get a deed-in-lieu of foreclosure, which does not show up on your credit score as badly as an actual foreclosure and helps you avoid further debt. Note that this will not work if you have any other financial obligations attached to the property, and this includes HOA liens. That is, you often cannot do this if your neighborhood has a HOA. Save Your Home Today With Cibik Law Cibik Law can help you avoid foreclosure and stay in your home. We are trusted bankruptcy lawyers who can help you properly assess all of your options, including bankruptcy, and help you stay in your home and move on. We can also help you with your various legal options through the foreclosure process, including assistance with short sales, setting up payment and loan modification plans, etc. We can also help you decide whether Chapter 7 or Chapter 13 bankruptcy is your best option. Cibik Law can help you get out from under debt, stay in your home, and get a financial fresh start.

08 December, 2025

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