Bankruptcy's automatic stay stops most lawsuits once the bankruptcy is filed. Typically, you will not be able to file a lawsuit if it relates to certain debts which include: personal loans, credit card balances, medical bills, utility bills, unpaid rent, unpaid car payments, home foreclosures or accidental personal injury cases. There are some instances where the lawsuit can continue despite a bankruptcy being filed. For example, filing bankruptcy will not stop a criminal case. Divorce and custody cases are not directly affected by the filing of a bankruptcy. If the person filing for bankruptcy caused a death or injury while intoxicated, the lawsuit against them can usually continue. Also, lawsuits where debts arise after the filing of bankruptcy can continue. Meaning if the debtor causes an accident one month after filing bankruptcy and damages your car, you can file a lawsuit against them. For matters arising before the bankruptcy was filed, you may be able to petition the bankruptcy court for relief from the automatic stay so that your lawsuit may continue. Whether the court would grant your request depends on the circumstances.   About Michael A. Cibik, Esq. Michael A. Cibik is a partner at the Philadelphia law firm of Cibik Law, P.C. He is one of the few attorneys in the Philadelphia area certified by the American Bankruptcy Board.

Every year, thousands of Americans file for bankruptcy to achieve a fresh start with their finances. If you have little income and significant debt, you could be eligible for a Chapter 7 bankruptcy. At the end of a Chapter 7 bankruptcy, the bankruptcy court will effectively eliminate most of your unsecured debts. Not everyone qualifies for a Chapter 7 bankruptcy, however. Those who do not qualify for a Chapter 7 bankruptcy can apply for a Chapter 13 bankruptcy.  When we meet with clients, they often ask us if the bankruptcy court will deny their bankruptcy. It depends on whether the applicants meet the eligibility requirements for the particular type of bankruptcy they are filing. If you do meet the eligibility requirements, there are various other reasons why the bankruptcy court could deny your bankruptcy application, including the following:   Attempting to Defraud a Creditor Engaging in any type of fraud can cause a denial of your bankruptcy application. If you defraud, hinder, or delay one of your creditors, the bankruptcy court will deny your application. Defrauding a creditor can include removing, destroying, or transferring property within a year before filing your bankruptcy application. If you engage in fraud at any time after you file your application, your application can be denied. Bankruptcy courts want to prohibit applicants from giving away their assets to protect their assets from bankruptcy. Suppose someone is worried about giving up their sports car, so they give their sports car away to their adult child before they file for bankruptcy. This type of action could be considered defrauding a creditor.  When you apply for bankruptcy, you must disclose all of your debts to your attorney immediately. You should also tell your attorney about any potential fraudulent behavior, so your attorney can prepare for questions about the matter from the trustee. It is possible that you can explain your loss of asset to the trustee, and the trustee may understand. It is also possible the trustee will deny your bankruptcy.   Making False Statements  Similarly, if you can steal important information regarding your financial condition, the bankruptcy court could deny your Chapter 7 or Chapter 13 bankruptcy. Likewise, if you make false statements in connection with your bankruptcy, your bankruptcy may be denied. Remember that you are stating under oath that everything in your application is true when you submit your bankruptcy application. If the court finds out that you lied or left information out, one of your creditors can challenge your bankruptcy discharge.   Violating a Court Order Violating a court order is a quick way to have your bankruptcy denied. The bankruptcy court may order you to submit more information about your bank accounts or assets. You must comply with these court orders, even if you do not think they are fair or necessary. Failure to comply with court orders will almost certainly result in the courts not discharging your debt through bankruptcy.   Failure to Disclose a Prior Bankruptcy Case Sometimes applicants for bankruptcy assume that they will be denied if they tell the court that they have already had a bankruptcy in the past. As a result, they hide their previous bankruptcy and don't disclose it to the court on their application. Failure to disclose your prior bankruptcy case well typically results in a denial of your application. It is essential that you are truthful and upfront about any other bankruptcy cases in your past.   Failure to Complete Your Required Financial Courses Bankruptcy law requires that all applicants complete a credit counseling course. Applicants must complete this course before they file their application. They must also complete a debt management course before the court finalizes the discharge of their debt. After you pay for and finish each course, you will receive a certificate of completion. Your attorney can help you file the certificate with the court. If you do not take the class or fail to file your certificate on time, the bankruptcy court will dismiss your case.   Paying Your Court Filing Fees In addition to completing the mandatory classes, you will need to pay all of your filing fees. If you have little to no income in your filing for a Chapter 7 bankruptcy, you can apply for a waiver of all of your court fees. The court will consider your expenses and your current income when deciding whether to grant or deny the waiver of fees. However, if you do not obtain a waiver and do not pay your fees, the court will dismiss your case.   Not Attending Required Meetings Bankruptcy applicants must attend a mandatory hearing known as the meeting of creditors. During this hearing, the bankruptcy trustee in charge of your case will ask you questions while you are under oath. They will ask about your financial affairs and bankruptcy papers. You also need to present them with proof of your identity. Typically, the meeting of creditors only lasts for 15 to 30 minutes. Creditors rarely show up. Nonetheless, if you do not attend your meeting of creditors, the trustee will typically ask the court to dismiss your case.   Not Submitting Required Documents or Making Payments When you file for bankruptcy, you must disclose all of your financial affairs to the court. You will need to fill out a set of bankruptcy forms, including schedules, bankruptcy petitions, and other required forms. You will also be required to submit supporting documents like your pay stubs, tax returns, and other documents that verify the information you have written down in your application. Failure to provide all the required documentation will result in a denial of your bankruptcy.

Do you receive late notices and collection letters in the mail? You probably opened them at first, but now do you just throw them in an unopened pile, hoping to deal with them later - and later never comes? Are you tired of explaining why you have not paid a bill, embarrassed telling complete strangers your personal tragedies? Millions of people who are behind in their bills do not look forward to opening the mail, answering a phone or speaking to bill collectors. At the first moment you file bankruptcy you automatically obtain relief that modifies the way your creditors treat you. With few exceptions, all collection activity must stop, all mail and phone calls must stop and creditors must change the way they try to get money from you. Debt collectors are no longer permitted to contact you by telephone while you are represented in a bankruptcy case. Peace of mind and calm are restored to your life. Student loans, mortgage companies, car title lenders, medical bills, taxes, and credit cards debts are all included and are all covered by the automatic stay when you file bankruptcy. Bankruptcy requires creditors present their debt to the court for payment and only debt you can afford to pay gets paid during your case. Many other debts are discharged. Some exceptional debt survives bankruptcy and may be collected from you in the future.

In a Chapter 13 bankruptcy, a person must pay all of their disposable income into their Chapter 13 repayment plan. Disposable income is any income that is not used for reasonable and necessary expenses such as shelter and food. When you receive a tax refund during a Chapter 13 bankruptcy, the trustee may consider those funds as disposable income if they weren't included in the income and expense calculations used to pay your Chapter 13 plan. The tax refund can be considered a surplus by the trustee and therefore you may be required to put that money towards your repayment plan. If you are able to show that the trustee is incorrect, then the court may let you keep the money.

Filing for bankruptcy is a tedious process, so we’ll walk you through the basics. We offer a free consultation for anyone considering bankruptcy where we will discuss your finances, debts, and goals. For some, bankruptcy may not be the best option. For others, you may need assistance learning which type of bankruptcy between Chapter 7, Chapter 11 and Chapter 13 makes the most sense for your financial situation. To file for bankruptcy, first you need to compile all of your financial information. This includes a list of all creditors and what debts you owe to each, your income information, and a list of any assets that you own. If you work with the bankruptcy attorneys at Cibik Law, we will also run a credit report and help you pull together a list of all creditors, debts, assets, and outstanding liabilities. U.S. Bankruptcy Code requires that you complete credit counseling to file for bankruptcy in Philadelphia, PA. Credit counseling is a common requirement, and it can typically be done over the phone or online in about an hour. Your counselor will help review your financial situation and offer solutions, likely leading to a recommendation of bankruptcy. We will assist you with this. Next, determine if you need to file for Chapter 7, Chapter 11 or Chapter 13 bankruptcy. If you are unsure what these terms mean, visit our dedicated pages to each type of bankruptcy on this website, or come in for a consultation. The bankruptcy experts at Cibik Law can help guide you through the different types of bankruptcy to learn which is the best option for your unique situation. Once you have taken these steps, it is time to complete a bankruptcy petition. This involves a lot of paperwork, which is why it is better to work with an experienced bankruptcy attorney to guide you through the process. There are over 20 forms to fill out, totaling over 60 pages of information needed to complete your bankruptcy petition. There are various “schedules” or series of documents that you must complete. The main schedules include the following and must list certain pieces of information: Schedule A/B: Your assets, including real estate Schedule C: Your exemptions Schedule D: Your secured debts Schedule E: Your priority debts Schedule F: Your general, unsecured debts Schedule G: Your pending contracts (for example, existing leases) Schedule H: Your co-debtors or co-signers on debts Schedule I: Your monthly income Schedule J: Your monthly expenses Complete these documents to the best of your knowledge, or with the help of our bankruptcy lawyers. You must also complete a Statement of Financial Affairs to answer any remaining questions about your finances, assets, liabilities, and any business information. Finally, complete a summary of your assets and liabilities for the full picture of your assets and debts. You may need to also submit a repayment plan or Statement of Intention depending on your debts and the type of bankruptcy you are filing under. If you file under chapter 13 bankruptcy, you will need to create a repayment plan for your debts. The process continues, as you must file a Statement of Current Monthly Income and Expenses to show what income you have to repay debts each month. After filing, a trustee must be assigned to your case to manage your repayments and debts. This trustee is court-appointed, or you can choose a trusted friend or relative. They will review your case and help manage repayments. You will also undergo a meeting of creditors to discuss your ability and timeline for repayment. After this step under Chapter 7, there are no repayments and your trustee will recommend a discharge of debts, unless more information is needed. Under Chapter 13, your trustee will confirm your repayment plan and submit it, pending court approval. In a Chapter 11 your trustee will review your business financial statements to decide whether they will recommend confirmation of your Chapter 11 bankruptcy plan of reorganization.

As the coronavirus pandemic continues, many Americans have been struggling to pay their mortgages and other bills. When a property has unpaid debts associated with it, the city of Philadelphia can sell the property in a Sheriff's sale, which is a type of auction. The money that comes from the sale goes to pay for the unpaid debt, such as delinquent property taxes for other municipal liens. The goal of a Sheriff's sale in Philadelphia is to recover enough money to clear the debt and liens on the property, so the new owner owns the title free and clear. What happens when a home does not sell after a sheriff's auction? What Triggers a Sheriff’s Sale? The following types of debts can trigger a sheriff’s auction in Philadelphia — unpaid tax bills, an unpaid mortgage, or any other lien on the property. Sheriff sales occur when the debt or lien is at least three years delinquent. However, the sheriff's department does not automatically sell properties with delinquencies. They look at multiple factors to decide when to sell a property through a Sheriff’s sale. These factors include the length of the delinquency, the amount of debt, and whether the owner has tried to enter into a repayment plan. They also consider the value of the property and whether a Sheriff’s sale is worth it. The city of Philadelphia isn't the only agency that determines which properties will be sold in a Sheriff's sale. Philadelphia also works with its collection agencies, including GRB and Linebarger, along with the court system to decide which properties to sell. Individuals can request that tax-delinquent properties go to a Sheriff’s sale by contacting the entity that owns the tax liens.   The Sheriff’s Auction Process in Philadelphia  The Philadelphia Sheriff Department holds a Judicial Foreclosure Sale on the first Tuesday of every month. Philadelphia also holds four different tax sales each month and one sale every quarter. The court will assign every property and identification number. These sales are open to the public, and anyone who is qualified can bid for the property. In most cases, people who put in bids for the property at Sheriff's sale are bidding against some type of bank representation.  The foreclosing entity, such as the tax authority, HOA, or lender, can regain title to the home through a Sheriff's sale. In many cases, the bank will send an attorney to bid on the home. Sometimes the bank will win the auction, make repairs on the home, and then list it for sale again. Under Pennsylvania law, the bidder must be able to put down at least 10% of the property’s purchase price immediately on the day of the auction. The buyer only needs to have a check and a driver's license. They must pay the additional 90% within 20 days of the auction, giving them time to get their funds in order and transfer the money.   When a Home Does Not Sell, it Becomes an ERO Property In some cases, the home will not sell during the sheriff's auction. When a home does not sell in a Sheriff’s sale, it will become real-estate owned (REO property). The bank or other lender will take possession of the home until they can sell it or auction off the property themselves.    Why You Need a Philadelphia Mortgage Foreclosure Lawyer  Are you concerned about your property being sold at a Sheriff's auction? If so, you need to consult with an experienced Philadelphia foreclosure lawyer. The best time to speak to a lawyer is before the foreclosure process begins. Lenders can begin the foreclosure process when you are over 60 days behind on your mortgage payments. You have the opportunity to reinstate your ownership by paying all the missed payments. However, unless you can pay all of the back payments in one lump sum, your lender may continue with the foreclosure process. The next step of the foreclosure process involves filing a Complaint in Mortgage Foreclosure against you. Many of our clients believe that there is nothing they can do at this point to be evicted from their home after the foreclosure. However, our attorneys can use several different legal strategies to defend our clients who are facing foreclosure.   Owner’s Rights of Redemption After a Tax Delinquent Sale If someone has purchased your property after a tax delinquent sale, you still have some rights. If you are the owner of the record, you can go to court and seek permission to recover your property. You will need to pay back all of the taxes you owe and pay back the winning bidder’s money. This process is called the Right of Redemption. Only certain property owners can use the Right of Redemption. To use the Right of Redemption, you must show that the owner occupied the property 90 days before the Sheriff’s sale. When the property has been abandoned or unoccupied, there is no Right of Redemption.    Contact a Philadelphia Foreclosure Lawyer Today When you work with the experienced lawyers at the Law Offices of Cibik Law, you can rest assured that we will thoroughly investigate your case. We will develop an effective strategy that could involve finding irregularities or errors in the mortgage documents, the bank disclosures, or the notes. We may be able to delay the foreclosure process by making the lenders prove their case.  We may be able to help you obtain a loan modification, a deed-in-lieu, a short sale, or help you with a Chapter 13 Bankruptcy to stop the foreclosure process. Contact Law Offices of Cibik Law today to schedule your initial consultation. We will review your case and provide you with an overview of your legal options.