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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.

One of the questions new clients frequently ask us is whether they can be denied a Chapter 13 bankruptcy. There are two main ways that you can be denied a Chapter 13 bankruptcy in Philadelphia. First, you may not meet the eligibility requirements to file for Chapter 13 bankruptcy. If your secured and unsecured debt exceeds certain amounts, the bankruptcy court will not take your case. Second, you could be denied during the bankruptcy proceedings due to fraud or other issues that arise. Are You Ineligible for a Chapter 13 Bankruptcy? Many of our clients want to file for Chapter 13 bankruptcy because they will not have to sell their assets to pay for their debts, as they would in a Chapter 7 bankruptcy. In a Chapter 13 Bankruptcy, you can typically keep your home and vehicle. The court will determine how much you owe on all of your debts and devise a repayment plan. At the end of the repayment plan, which typically lasts three to five years, you will be able to keep your assets.   Not everybody is eligible for Chapter 13 bankruptcy, however. If your total amount of unsecured and secured debt exceeds the amount set forth in federal law, you will not qualify to file for Chapter 13 bankruptcy. As of this writing, an individual is eligible for Chapter 13 bankruptcy as long as his or her unsecured debts are less than $394,725  and his or her secured debts are less than $1,184,200. If your debts exceed this amount, you will need to file for Chapter 11 bankruptcy instead.    Only individuals can file for Chapter 13 bankruptcy. There is one exception, however. If you are a sole proprietor, your business cannot file for Chapter 13 bankruptcy, but when you are a sole proprietor, your business and personal debts are both your responsibility, and you can include them when you file as an individual. Since you are personally liable for your business debts, you will be able to include them in the Chapter 13 bankruptcy process.   Attempting to Defraud the Bankruptcy Court There are several reasons why a bankruptcy court will deny your Chapter 13 bankruptcy. Even if your application for bankruptcy has been granted and you start the process, the court can still dismiss your case anytime before finalizing your bankruptcy. A bankruptcy court will deny the discharge of your debt if you hinder, delay, or defraud a creditor.   Attempting to defraud a creditor can involve mutilating, destroying, transferring, removing, or concealing property within one year of filing for bankruptcy or after the date you filed for bankruptcy. Essentially, debtors cannot give away their assets before filing for bankruptcy in an attempt to conceal them from the bankruptcy court.    If you are filing for bankruptcy, we recommend that you give full disclosure of your financial situation to your bankruptcy attorney about any changes and property or transfers you made before filing for bankruptcy. If you are not completely honest, the courts might deny your debt discharge.   Concealing or Destroying Information   Courts will deny the discharge of debt when the applicant destroys, falsifies, mutilates, or conceals information regarding his or her financial situation. This could include destroying financial documents or simply making false claims about your finances for your own benefit. For example, when someone makes assertions about his or her finances in the bankruptcy schedules but cannot prove them with evidence, the court may dismiss the bankruptcy case.   Lying When applicants for Chapter 13 bankruptcy lie or make false statements, whether intentionally or unintentionally, the court may deny their bankruptcy filing. When you file for Chapter 13 bankruptcy, you are under penalty of perjury, and you agree that everything you submit in your application is accurate and true. If it comes to light that you made omissions in your application, a creditor or trustee can challenge your bankruptcy. It is essential to be completely truthful with the bankruptcy court and your attorney.   Asset Loss Sometimes people who are filing for bankruptcy try to give away assets or hide them to keep them from being subject to the bankruptcy process. When a Chapter 13 bankruptcy applicant cannot explain a deficiency in assets or the loss of assets, the court may dismiss the case.   Refusal to Comply With a Court Order Debtors must comply with all orders issued by the bankruptcy court. If a debtor refuses to obey a court’s lawful order, the court may deny the bankruptcy case. If you have questions about following an order from the bankruptcy court, we recommend speaking to your attorney. Simply not complying or ignoring the order will likely result in your case being dismissed.   Failure to Take the Instructional Course  Part of successfully filing for bankruptcy in the United States involves taking a course about personal financial management. If you fail to take one of the approved instructional courses, the court will probably dismiss your case. The first course you need to take is a credit counseling course that you will need to fulfill before you can even begin processing your bankruptcy. The second course is a financial management course that you need to finish before your debts can be discharged. These courses cost anywhere from $20 to $100, depending on your location. Yet, completing them is much cheaper than having your bankruptcy case denied and needing to refile it.   Consult With a Chapter 13 Bankruptcy Lawyer Today Are you interested in filing for Chapter 13 bankruptcy? Do you have questions about whether you could be denied a Chapter 13 bankruptcy in Philadelphia? If so, the experienced bankruptcy lawyers at the Law Offices of Cibik Law are here to help. Contact us today to schedule your initial consultation. 

ANSWER:   1.  You can’t be sued to collect on a debt. Sure, that Sheriff or Process Server that comes to your door at 5:00 a.m. is a really nice guy, and you’ll miss those early morning visits, but the fun has to end sometime. More than ever, Creditors and Debt Collectors are suing people to collect on debts.  In fact these days, I see more and more clients that have been sued over debts of $1,000.00 or less. When you file a bankruptcy it stops all collection actions.  This includes lawsuits. And once the debts are discharged the creditors are forever barred from trying to collect on the debt. 2.  You won’t have your wages garnished. As disappointed as I know you are about this fact, you will be able to keep all of your hard earned money. When you file a bankruptcy,  a debt collector can’t keep taking money out of your pay, and the discharge that you receive prevents them from starting up a garnishment  once the bankruptcy is over. 3.  You may have disposable income. That’s right.  Money to pay for such frivolous things as food, clothing and medicines. You’ll be Livin’ La Vita Loca! 4.  You can keep both of your kidneys. Seriously, selling body parts to pay your creditors is way too over rated, and you never know when a friend or love one may need a donor. 5.   You will probably get more sleep. You will spend less time staying awake at night watching various fly by night companies telling you how they can consolidate your debts, reduce your money payments, reduce the amount you owe your creditors, win the war for the Allies and cure cancer. Bankruptcy is a sure thing.  It gets rid of your debts and allows you to get a fresh start.  Debt consolidation companies aren’t.  

Filing Chapter 7 bankruptcy in Philadelphia, Pennsylvania, gets rid of debts you cannot afford to pay. It gives you a fresh start to recover from a financial crisis. Filing a Chapter 7 bankruptcy can protect some property from creditors while allowing you to rebuild your finances.  However, there are pros and cons of filing bankruptcy under Chapter 7. Before deciding if Chapter 7 is right for you, contact our Philadelphia bankruptcy lawyers to discuss your situation. At Cibik Law, P.C., we offer free consultations. Get the information you need to make the best decision about your debt relief options from experienced bankruptcy attorneys in Philadelphia.  In this article, our bankruptcy lawyers discuss why you should file a Chapter 7 bankruptcy. We also discuss Chapter 7 topics including: Most Common Reasons for Filing Chapter 7 Bankruptcy Why Should I File a Philadelphia Chapter 7 Bankruptcy? What Is a Chapter 7 Bankruptcy Discharge? What Debts Can I Get Rid of in Chapter 7? Do I Qualify to File a Chapter 7 Bankruptcy Case? Benefits of Filing Chapter 7 in Pennsylvania Will I Lose My Property if I File a Chapter 7 Bankruptcy Case? Is There Life After Filing Chapter 7 Bankruptcy? – Rebuilding Credit Most Common Reasons for Filing Chapter 7 Bankruptcy Individuals, spouses, and businesses can file under Chapter 7 of the Bankruptcy Code. If a business files Chapter 7, the business closes and the assets are liquidated to pay business debts. When individuals and couples file under Chapter 7, they eliminate most unsecured debts. Common reasons people file for Chapter 7 bankruptcy relief include: Medical debts or credit card debts Decreases in household income Unemployment or job loss Becoming disabled Illnesses, accidents, and injuries Loss of a spouse Divorce or legal separation  Failed business ventures  Each person’s situation is unique. Your reason for filing a Philadelphia Chapter 7 bankruptcy case may be different from any of the reasons listed above. Regardless of the reason for filing Chapter 7, the goal is the same. To eliminate debts and get a fresh start. Why Should I File a Philadelphia Chapter 7 Bankruptcy? Struggling with debts that you cannot pay is stressful. Stress can cause increase your risk of developing several conditions, including high blood pressure and insomnia. The stress caused by financial problems can impact your job performance and your family. Getting rid of debts by filing bankruptcy can reduce your stress level. Filing bankruptcy also gives you a fresh start to recover from a crisis that you did not foresee. Everyone experiences situations that can cause a financial hardship. In some cases, a person may not be able to repay debts, no matter how diligent they try.  The Bankruptcy Code was created to give individuals the ability to recover from financial hardships without losing everything. In the 1934 U.S. Supreme Court decision in Local Loan Co. v. Hunt, 292 U.S. 234, 244, the court said that bankruptcy gives an honest but unfortunate person a clear field for future effort and a new opportunity in life free from the discouragement and pressure of preexisting debt.  If you have debts that you cannot pay, you deserve a new opportunity and a chance to overcome your debt problems. Filing a Chapter 7 bankruptcy give you that chance. However, before you file a Chapter 7 case, you need to know some important facts about Chapter 7 bankruptcy cases.  What Is a Chapter 7 Bankruptcy Discharge? What Debts Can I Get Rid of in Chapter 7? A bankruptcy discharge releases you from legal liability for a debt. When a debt is discharged in bankruptcy, the creditor cannot take any action to collect the debt. Therefore, filing Chapter 7 bankruptcy stops debt collectors and creditors from filing debt collection lawsuits, garnishing wages, seizing property, or harassing you with telephone calls and letters.  However, a bankruptcy case only discharges certain debts. Most unsecured debts are discharged in bankruptcy. Debts that may be discharged in Chapter 7 include: Medical bills Credit card debts Personal judgments Old lease and rent payments Some old tax debts Old utility bills and cell phone bills You cannot discharge recent income tax debts, child support, alimony, and most student loan debt. However, student loan debt can be discharged if you can prove that paying the debt would create an undue hardship. It is a difficult burden of proof, but it is possible in cases where the debtor cannot return to work because of a disability. Chapter 7 bankruptcy does not get rid of secured debts, unless you surrender the asset. Therefore, if you owe more on your car or your home, you can surrender the asset in Chapter 7 in full satisfaction of the debt. The creditor cannot sue you for money owed after it sells the property.  If you want to avoid foreclosure or repossession, you may want to consider filing a Chapter 13 bankruptcy. A Chapter 13 bankruptcy can also help you with past due taxes, alimony, and child support by spreading the payments over a three to five-year repayment plan.  Do I Qualify to File a Chapter 7 Bankruptcy Case? Chapter 7 bankruptcy is intended to help people who cannot afford to repay their debts. If you can afford to repay some of your debts, you must file under Chapter 13 to receive a bankruptcy discharge.  The bankruptcy Means Test calculates your current monthly income based on household income during the six months before you file your Chapter 7 bankruptcy petition. If your income is below the average household income for a family of your size in Pennsylvania, you “pass” the Means Test and should qualify for a bankruptcy discharge under Chapter 7. If your income is above the median income for Pennsylvania, your “fail” the Means Test. However, if your disposable income is below a certain amount, you could still qualify to file Chapter 7 in Philadelphia. Disposable income is the amount of money you have left over after subtracting allowable expenses from your monthly income. Allowable expenses include: Rent or mortgage payments Utilities Food and personal items Involuntary deductions from income (i.e., taxes, union dues, requirement retirement plans, etc.) Transportation costs Car loan payments Out-of-pocket health care expenses Childcare expenses Health, term life, or disability insurance premiums Court-ordered payments, such as alimony and child support Education expenses for a child Charitable contributions  There could be additional expenses you can deduct for special circumstances. Some expenses may be limited, such as the amounts for utilities, food, and clothing.  Our experienced Philadelphia bankruptcy lawyers carefully analyze the Means Test to ensure that every deduction is included and maximized to give you the best chance of qualifying for a Chapter 7 bankruptcy discharge.  Benefits of Filing Chapter 7 in Pennsylvania The benefits of filing under Chapter 7 may vary depending on your financial situation. However, the pros of filing Chapter 7 can include: Quick Way to Get Out of Debt Most no-asset Chapter 7 cases filed in Pennsylvania are discharged and closed in four to six months after filing the Chapter 7 petition. You could be entirely out of debt in as little as a few months by filing Chapter 7. No Repayment Plan A Chapter 7 bankruptcy is not a repayment plan. You are not required to pay your unsecured creditors any more money for the debts you owe. If a debt is eligible for a discharge, the entire amount is eliminated in your Chapter 7 bankruptcy case.  Stop Creditor Harassment When you file a Chapter 7 case, the bankruptcy automatic stay remains in effect until your case is discharged and closed. The automatic stay prohibits creditors from taking any actions to collect debts after you file your bankruptcy case. The bankruptcy discharge prevents creditors from trying to collect discharged debts after your bankruptcy case is closed.  Stop Lawsuits and Wage Garnishment If a creditor has filed a debt collection lawsuit or is garnishing wages, the actions must cease when you file your Chapter 7 case. Provided the debt is dischargeable, the creditor cannot proceed with the lawsuit or the wage garnishment.  Keep Income and Property  Unlike a Chapter 13 case, you do not make monthly payments to a bankruptcy trustee. You keep the income you earn each month. A few people may lose property when they file under Chapter 7, but most people keep all their property unless they want to surrender their home or car to get rid of loan payments.  Avoid Deficiency Judgments  If a mortgage company forecloses on your mortgage, it can sell your home to pay off the debt. However, if it does not receive enough money to pay the loan in full, it can request a deficiency judgment. The lender can try to collect on the judgment. The same is true for a lender who repossesses a vehicle. When you surrender your home or car in a Chapter 7 bankruptcy, the lender cannot obtain a deficiency judgment. Even if you owe the lender thousands of dollars after the property is sold, you cannot be held personally liable for the debt. No Taxes Owed on Discharged Debts A disadvantage of debt settlement is paying taxes on the debt the creditor forgives. For example, if a creditor agrees to write off an account if you pay one-half of the amount you owe, the creditor reports the forgiven debt to the IRS. When you file your tax returns, the forgiven debt is added to your income, which could result in owing taxes. However, debts discharged in Chapter 7 are not included as income on your tax returns. You could discharge tens of thousands of dollars in unsecured debt without worrying about incurring tax debt. Affordable Debt Relief A Chapter 7 bankruptcy in Philadelphia is more affordable than you might believe. Most people are relieved to discover filing bankruptcy is not as expensive as they assumed. Our Philadelphia bankruptcy lawyers offer free consultations. It does not cost you anything to get bankruptcy advice.  Will I Lose My Property if I File a Chapter 7 Bankruptcy Case? One of the most common concerns people express about filing Chapter 7 is losing their property. Chapter 7 bankruptcy is a liquidation bankruptcy. A Chapter 7 trustee can take your assets and sell them to pay unsecured debts. However, the assets need to have equity above any liens and allowed exemptions. Bankruptcy exemptions protect certain amounts of equity in specific assets. If a Chapter 7 trustee sells an asset, he must pay any secured debts first and then pay the debtor any allowed exemption before using the remaining funds to pay unsecured creditors. Therefore, if there is little to no equity in an asset, the Chapter 7 trustee would not likely be interested in selling the property because it would not benefit the unsecured creditors. Most debtors keep all of their property when they file a Chapter 7 bankruptcy case.  In Pennsylvania, debts can choose between the federal bankruptcy exemptions and the Pennsylvania bankruptcy exemptions. You must be a Pennsylvania resident for at least 730 days before you file your Chapter 7 petition to choose the state bankruptcy exemptions.  Choosing the bankruptcy exemptions that are best for your case is crucial. For instance, Pennsylvania exemptions do not include a homestead exemption that can protect your home’s equity. Therefore, you might want to choose the federal bankruptcy exemptions if that is an issue. Our bankruptcy lawyers in Philadelphia carefully analyze your property to determine which set of bankruptcy exemptions offer the best protection of assets in Chapter 7. We provide an honest assessment to help you decide whether you want to file Chapter 7. It might be worth losing a piece of property to get rid of tens of thousands of dollars in unsecured debts in some cases. We can discuss the pros of Chapter 7 and other debt-relief options during your free consultation. Is There Life After Filing Chapter 7 Bankruptcy – Rebuilding Credit Another common concern of filing Chapter 7 is ruining your credit. A person’s credit rating has already been damaged by late payments, collections, judgments, and other negative information in many cases. Filing a Chapter 7 bankruptcy can help clear up some of these issues so you can begin working on improving your credit after bankruptcy.  The Chapter 7 bankruptcy filing remains on your credit report for ten years. However, it will not take you that long to qualify for a mortgage or car loan. By making all future debt payments on time and working to improve your credit score after bankruptcy, you will find that there is an opportunity for a healthy financial life after bankruptcy.  When you file Chapter 7, you are required to complete a Credit Counseling Course and Debtor Education Course. The courses can be completed online in less than two hours for a small fee. The information provided in these courses can help you improve your credit after bankruptcy. You can also find helpful information about rebuilding credit from the Federal Trade Commission. Filing a Chapter 7 bankruptcy case is not the end of your financial life. For most individuals, filing a Chapter 7 bankruptcy case is the first step in improving their credit rating. Contact Our Philadelphia Bankruptcy Lawyers for a Free Consultation Do you have questions about filing Chapter 7 in Pennsylvania? If so, we encourage you to contact our office to schedule a free consultation with an experienced bankruptcy attorney in Philadelphia.  Our lawyers at Cibik Law, P.C. understand that you may not be sure if Chapter 7 is right for you. We will analyze your financial situation and give you an honest assessment of whether filing Chapter 7 could help you. We will also answer your questions about bankruptcy. You are under no obligation to hire our law firm after your initial consultation.

Healthcare costs are soaring, and many Americans do not have adequate health insurance coverage. As a result, medical debt is on the rise. A recent study showed that 41% of all working-age Americans — 72 million people — have medical debt problems or are currently paying off medical debt. Additionally, seven million elderly adults also have medical debt. In total, 79 million Americans struggle to pay off medical debt.  If you are one of the 79 million Americans struggling to pay your medical debt, working with an experienced medical debt lawyer can help. After reviewing your financial situation, a medical debt lawyer will use one of many medical debt settlement strategies.   Carefully Review All of Your Medical Debt The first step in medical debt settlement is to analyze your medical debt carefully. You would be surprised how many doctors’ offices and insurance companies make significant errors when drafting and sending medical bills to patients. Many doctors’ offices automate the medical bill process, and if someone has not carefully reviewed your bill, you could end up paying significantly more than you should. When you or your loved one have undergone extensive medical treatment, you may have hundreds, or even thousands of dollars in medical bills. Going through all of your medical bills can seem intimidating, but it is an important first step in medical debt settlement. Ignoring medical bills that come in the mail can cost you even more money in interest should your bill go to collections.   Scrutinize Your Medical Bills for Errors You may have been charged for a medical procedure you never received, or you could have been billed for staying overnight at the hospital when you were released before you had been there 24 hours. You have a right to request an itemized breakdown of all the costs reflected on your medical bills so you can check for wrongful billing. Be sure to check for unnecessary hidden charges, as well.  When you find mistakes in your medical bill, you can request that the healthcare office put your debt on hold for 30 days so you can review your bill. This is one way to avoid your medical bills being sent to collection to give you time to consult with a medical debt lawyer about your case and determine the best way forward.   Negotiate With Your Medical Provider Many medical providers are open to negotiating medical debt. They would rather receive a partial payment than received no payment and have to deal with hiring a collections agency. You can call your medical provider and ask them to negotiate with you. You may be able to work out a deal with a no-interest payment plan so you can pay over time and avoid being sent to collections.  Or, ask if your medical provider will accept the insurance rate, which could be lower than what they expect you to pay. Negotiating with medical providers can be intimidating, and we recommend working with an experienced medical debt settlement lawyer who can negotiate a start of really on your behalf.   Consider Applying for Medicaid Many Americans with significant medical debt fall below the poverty line and cannot pay their mortgage, rent, and other bills. Suppose a medical condition has drained your savings and assets. In that case, you may qualify for Medicaid, a government program that provides healthcare for people with limited resources and income. When you are eligible for Medicaid,  your health care will be covered, and you will not add any more medical debt to your current medical debt.   Consider the Statute of Limitations Consider whether your medical debt has already passed the statute of limitations in Pennsylvania. The statute of limitations for medical debt is typically between three and six years. The statute of limitations begins when your medical debt becomes delinquent, not when you received the medical service. One of the experienced lawyers at the Law Offices of Cibik Law can help you determine whether your debt is outside the statute of limitations and should be canceled.   Try to Eliminate Liens In some cases, Health Care Providers have a right to issue a lien against you when you do not pay medical bills. They can record a lien in the public record with the County Recorder. Medical providers file liens to ensure they get paid. If you cannot pay your medical bills, they can begin taking action to foreclose on your property. Our lawyers focus on eliminating the underlying medical debt and seek to eliminate the lien on behalf of our clients.   Verify the Debt Medical bills are difficult to unravel. As part of the medical debt settlement process, our attorneys can force the medical provider or collection agency to verify all of the debt. During this process, we will look for any grounds possible to eliminate or reduce the debt. Verifying the debt is one way to hold healthcare agencies accountable for all of their billing practices.   Stop Harassment by Debt Collectors During the debt settlement process, we can help ensure that collection agencies stop harassing our clients. Collection agencies must follow federal debt collection laws that prohibit them from harassing debtors by showing up at their work or calling them an excessive number of times.  If a debt collector has been unlawfully harassing you, you may be entitled to damages under federal law.   File for Bankruptcy Medical debt is a leading cause of bankruptcy filings in the United States.  Filing for bankruptcy is often seen as a last resort. However, if you have extensive medical debt, filing for bankruptcy could give you and your family the fresh start you need. Our legal team can examine your situation and help you understand all of your legal options, including filing for bankruptcy.   Contact a Medical Debt Lawyer The attorneys at Law Offices of Cibik Law can help you seek relief from your medical debt, stop debt collectors from harassing you, and advise you of all of your legal options. You do not have to go through the medical debt process alone. Contact us to learn how we can help you solve your medical debt challenges.

At the end of December, more than 787,000 Americans had filed for unemployment. Many Americans have been laid off or had their work hours reduced due to the coronavirus pandemic. If you are struggling to pay your mortgage, you are not alone. Many Americans are trying to find a way to continue paying their mortgages during these challenging financial times.  If you are concerned about a mortgage foreclosure, or your lender has already started the foreclosure process, there are several legal strategies you can take to avoid mortgage foreclosure. We will discuss some of the best options for preventing a mortgage foreclosure below. Still, the best thing you can do is speak with an experienced Philadelphia bankruptcy lawyer about your legal options.   Payment Plans Such as Forbearances and Loan Modifications One of the options for avoiding foreclosure is negotiating a payment plan, such as a forbearance plan or a loan modification plan. Your lawyer will be able to negotiate with your mortgage company to request a repayment plan. Should your lender agree to the prepayment program, you will be able to initiate a loan workout and create a plan to begin making payments. Typically, loan modifications stop the foreclosure process.  In many cases, the lender will stop the foreclosure process and push back the payment’s due dates to the end of the loan. A forbearance plan is easier to achieve in most cases, but it will only pause the foreclosure process until you have caught up with your payments, meaning there will often be less of a delay.   Short Sales Has your lender filed a notice of disclosure before scheduling an auction? If you have received an offer from a buyer, your lender is required to consider the offer. If they do foreclose on your home, the lender will quickly resell your home. You have the option of presenting your loan officer with a reasonable short sale offer. In some cases, lenders will accept the short sale offer to save them the trouble and expense of finding a qualified buyer. If your home is on the market, you can keep seeking a buyer for it, even after the foreclosure process has begun. Discussing your case with an experienced lawyer will help you navigate the process of short selling your home.   Defending Against Your Foreclosure It is always wise to work with an experienced lawyer if you are going through the foreclosure process, no matter what legal option you choose. It may be possible for a knowledgeable and skilled foreclosure defense lawyer to defeat the allegations in the foreclosure complaint on legal grounds. Typically, lenders use boilerplate complaints with generic legal arguments. They do not want to spend a significant amount of time arguing the case in court or writing a tailored complaint. Most homeowners will not challenge the complaint, so they use default language.  However, the generic arguments may not apply to your case. Your lawyer may be able to successfully argue against all of the allegations made by your lender. By arguing against a complaint, your lawyer may be able to stall the foreclosure for months, or the lender may begin the foreclosure proceedings again. In other cases, the lender may determine that it is not worth proceeding with the foreclosure and work with you for a loan modification.   Deed in Lieu When a homeowner is facing foreclosure, he or she can sign the deed to the home over to the bank voluntarily. This is typically not the best option for those facing foreclosures. Lenders generally are not willing to agree to take a deed in lieu of foreclosure. They would need to pay any subsequent mortgages or home equity lines of credit off before they could even properly execute a deed in lieu. Proceeding with the foreclosure process also allows the lender to verify that the homeowner is truly in financial distress. Deeds in lieu of foreclosures are often not accepted unless foreclosure will happen very soon, or the owner has put his or her property on the market for several months and not been able to sell it.   File for Chapter 7 Bankruptcy Many homeowners facing foreclosure determine that filing for bankruptcy is their best course of action. Filing for any type of bankruptcy will immediately stop the foreclosure process. Many individuals file for Chapter 7 bankruptcy, Which allows the homeowner to dissolve all of their debt and wipe out the majority of the responsibility to pay off the debt. Filing for bankruptcy gives a homeowner between 45 and 75 days to develop a plan for avoiding foreclosure. The time frame depends on your local bankruptcy court judge and your lender’s timeline. Not everyone has the right to file for a Chapter 7 bankruptcy. Instead, the applicant must prove that his or her income and assets are below the Pennsylvania household’s median income level. If you do not qualify for a Chapter 7 bankruptcy, you will likely be eligible for a Chapter 13 bankruptcy. Your lawyer will be able to review your financial situation and advise you on which type of bankruptcy will provide you with the most benefits.   File for Chapter 13 Bankruptcy  Chapter 13 bankruptcies are often referred to as reorganization bankruptcies. This type of bankruptcy will work with a bankruptcy trustee appointed by the court to reorganize your debt and create an effective payment plan. If you follow the payment plan and make payments according to it, you will permanently stop the foreclosure. At the end of chapter 13 bankruptcy, you will walk away free from the majority of your debt.   Contact a Philadelphia Bankruptcy Lawyer If you are unable to make your mortgage payments, you are not alone. The experienced Philadelphia bankruptcy lawyers at the Law Offices of Cibik Law are here to help. We will review your case and provide you with experienced legal advice regarding your best options. Contact us today to schedule your free initial consultation.

Financial experts predict that there could be a sharp increase in bankruptcy filings happening in the next few months. Government shutdowns related to the coronavirus pandemic have caused significant financial challenges for many Americans who have lost their jobs or experienced a decrease in pay. The federal government and state governments have adopted programs to help families who cannot pay their bills.  Government stimulus checks, mortgage forbearances, and government loans have helped many businesses stay open, but these loans are coming due, and these legislative aids will come to an end. As that process begins to unfold, companies will shut down, and more employees will lose their jobs, increasing bankruptcy filings. Individuals and businesses alike will be considering whether they should file for chapter 7 or chapter 11 bankruptcy. There are important differences in the processes and eligibility requirements for chapter 7 and chapter 11 bankruptcies.   Chapter 7 Bankruptcy Chapter 7 bankruptcies are often referred to as liquidation bankruptcies. Individuals, partnerships, and corporations can file for chapter 7 bankruptcy to liquidate their assets, pay off their debts, and start fresh. After the debtor files for a Chapter 7 bankruptcy, the bankruptcy court will appoint a trustee who will manage the debtor’s case. The trustee will arrange for the liquidation of the debtors qualifying assets under the bankruptcy code’s rules. During the liquidation process, the bankruptcy trustee will sell all of the debtor’s non-exempt property for cash. The trustee will gather the proceeds from the sales and distribute payments to the debtor’s creditors.   Eligibility for Chapter 7 Bankruptcy Chapter 7 bankruptcy is only available to individuals, corporations, partnerships, and other business entities that meet the means test. In other words, debtors with high incomes or who own too many assets are not eligible for filing a chapter 7 bankruptcy. When a debtor’s current monthly income is higher than the state median income, the courts must apply a means test to decide whether the debtor can qualify for a chapter 7 bankruptcy. When the debtor’s aggregate current monthly income over five years is over $12,850 for 25% of the debtor’s non-priority unsecured debt, as long as that amount is at least $7,700, the court will presume that the debtor earns too much to qualify for a chapter 7 bankruptcy. The debtor can still overcome this presumption, but in most cases, the court will convert the Chapter 7 bankruptcy to a Chapter 13 Bankruptcy with the debtor’s consent, or the court will dismiss the case outright. The goal of a Chapter 7 bankruptcy is to allow the debtor to discharge certain types of debts. Doing so enables an individual to a fresh start because he or she will not have to contend with liability and continue paying debts that have been discharged. Keep in mind that in a Chapter 7 bankruptcy case, the discharge of debt is only allowed to individual people, not to corporations or partnerships. An individual filing for Chapter 7 bankruptcy will be able to walk away without debt, but not all types of debts will be discharged in a Chapter 7 bankruptcy. Additionally, a Chapter 7 bankruptcy cannot extinguish the debtor’s lien on a property.   Chapter 11 Bankruptcy Many businesses choose to file a chapter 11 bankruptcy because they do not want all of their assets to be liquidated. Running a business is impossible when a trustee sells all of the business’s assets to pay back creditors. For those who would like to continue operating their business during the bankruptcy process, chapter 11 bankruptcies are a much better option.   Many companies across the United States have filed for chapter 11 bankruptcy due to coronavirus-related government shutdowns. Movie theaters, restaurant chains, and gyms have all filed for chapter 11 bankruptcy, petitioning the court to help them reorganize their debt so they can continue operating their businesses and not close down entirely. In a chapter 11 bankruptcy, the debtor can petition the court to adjust his or her debts by reducing the debts or by extending the time for repayment, or they may seek a more comprehensive reorganization. Chapter 11 bankruptcies are not limited to large corporations either. Sole proprietorships can qualify for chapter 11 bankruptcy. In a chapter 11 bankruptcy, the debtor will seek to reorganize his or her assets. Chapter 11 bankruptcies are often recalled reorganization bankruptcies. In this type of bankruptcy, a corporation, a partnership, and some types of qualifying individuals can reorganize their debt. One of the benefits of filing a chapter 11 bankruptcy is that the debtor will not be required to liquidate all of his or her eligible assets to pay back creditors.  Instead, the debtor will create a plan with the help of a bankruptcy trustee. He or she will present the bankruptcy plan to creditors. When the creditors accept the plan and the court approves it. In that case, the debtor can choose to reorganize his or her financial, business, and personal affairs to become a financially productive business or individual again. Chapter 11 bankruptcies are among the most complicated of all different types of bankruptcies in the United States. They are also typically the most expensive type of bankruptcy proceeding. Businesses should not undergo a chapter 11 bankruptcy unless they have carefully analyzed their financial situation, spoken with an experienced bankruptcy lawyer, and explored other options for resolving their debts outside of the bankruptcy process.   Contact a Bankruptcy Lawyer Today If you are one of the millions of Americans struggling to pay your bills on time, you are not alone. Filing for bankruptcy could be an option for you. The experienced bankruptcy attorneys at the Law Offices of Cibik Law will review your financial situation and advise you whether a chapter 7 or chapter 11 bankruptcy could help you start fresh. Contact us today to schedule your free case evaluation.