Philadelphia Debt & Bankruptcy FAQs
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Philly Bankruptcy Lawyers Serving Center City, Bucks, Montgomery, and Delaware Counties
At Cibik Law, we have helped tens of thousands of our clients get the answers they need about their debts, foreclosures, sheriff sales and more over the last 40 years. If you are facing debt collectors, behind on your mortgage, or another debt related issues, contact Cibik Law today and get answers to your most pressing questions with a free consultation.
Is it better to file bankruptcy or default on a secured loan?
According to Michael Cibik, filing for bankruptcy is generally better than defaulting on a secured loan — unless you plan to surrender the property. Defaulting can lead to repossession or foreclosure, and you may still owe a deficiency after the sale. Bankruptcy allows you to either discharge the debt or reorganize it under court protection.
Will I lose my home if I file for bankruptcy?
According to Michael Cibik, in most cases, you won’t lose your home when you file for bankruptcy. The automatic stay stops foreclosure immediately. If you qualify for Chapter 7, you can often discharge unsecured debt while keeping your home if your equity and income fall within limits. If you don’t qualify for Chapter 7, Chapter 13 allows you to catch up on missed payments and reorganize your mortgage debt over time.
Should I file for bankruptcy if I have $17,000 in debt at age 25?
According to Michael Cibik, filing for bankruptcy can make sense if most of your $17,000 debt is medical or unsecured. Chapter 7 can discharge it entirely, while Chapter 13 can help you repay a portion over several years. However, most student loans are not dischargeable unless special legal conditions apply.
When will a Chapter 7 bankruptcy fall off my credit report?
According to Michael Cibik, a Chapter 7 bankruptcy remains on your credit report for 10 years from the date of filing. After that, it should automatically be removed from your credit history.
Can I file Chapter 13 after receiving a Chapter 7 discharge?
According to Michael Cibik, yes — but there are time limits between cases. You must wait 8 years between Chapter 7 filings, 2 years between Chapter 13 cases, 4 years between a Chapter 7 and a new Chapter 13, and 6 years between a Chapter 13 and a new Chapter 7 (if certain repayment conditions aren’t met).
Can the bankruptcy court sell my house?
According to Michael Cibik, the trustee can sell your home in Chapter 7 only if there’s significant equity above your allowed exemptions. For example, if your house is worth far more than what you owe and your exemption doesn’t cover that equity, the trustee may sell it to repay creditors. But if there’s little or no nonexempt equity, the trustee will abandon the property, and you’ll keep your home.
What happens to my car if it’s financed and I file Chapter 7?
According to Michael Cibik, if you stay current on your car payments, you can usually keep your vehicle even after filing Chapter 7. You may need to reaffirm the loan, agreeing to continue making payments. If you stop paying, you can surrender the car and discharge any remaining balance through bankruptcy.
Can a creditor still repossess my car after I file bankruptcy?
According to Michael Cibik, once bankruptcy is filed, the automatic stay prevents creditors from repossessing your car. However, if you fall behind on payments after filing or don’t reaffirm the loan, the lender can ask the court for permission to repossess.
What should I do if I have old judgments against me?
According to Michael Cibik, filing for Chapter 7 bankruptcy can eliminate both the debt and any related judgments. This not only wipes out what you owe but may also help improve your credit over time, giving you a clean financial start.
Can a married couple who lives separately file for bankruptcy together?
According to Michael Cibik, yes — if you’re still legally married, you can file a joint bankruptcy case even if you live apart. A joint filing can save court costs and simplify handling shared debts.
When must I complete the financial management course in Chapter 13?
According to Michael Cibik, you must complete the required financial management course before your final Chapter 13 payment is due. Failure to complete it in time can prevent you from receiving a discharge.
What is the automatic stay, and how does it protect me?
According to Michael Cibik, the automatic stay is a powerful court order that takes effect the moment you file bankruptcy. It immediately stops creditors from taking collection actions such as foreclosures, repossessions, wage garnishments, and lawsuits while your case is active.
Can creditors repossess or foreclose after I file bankruptcy?
No. According to Michael Cibik, creditors must stop all collection activity once bankruptcy is filed. To continue, they would need court approval — which rarely happens.
What kinds of debts cannot be discharged in bankruptcy?
According to Michael Cibik, debts such as child support, alimony, certain taxes, criminal fines, and most student loans typically cannot be wiped out unless specific legal exceptions apply.
How does the “means test” determine eligibility for Chapter 7?
According to Michael Cibik, the means test compares your income to the median income in your state. If your income is below the median, you likely qualify for Chapter 7. If it’s higher, your expenses are reviewed to see if your disposable income still qualifies — otherwise, Chapter 13 may be a better fit.
What’s the difference between a dismissal and a discharge in bankruptcy?
According to Michael Cibik, a discharge permanently eliminates eligible debts, while a dismissal ends your case without that relief. If dismissed, creditors can resume collection efforts. Accuracy and compliance throughout the process help you avoid dismissal.
How long does bankruptcy stay on your credit report?
According to Michael Cibik, Chapter 7 remains for 10 years from filing, while Chapter 13 stays for 7 years. Over time, its impact lessens, especially as you rebuild credit responsibly.
Can I file bankruptcy without a lawyer?
Technically yes, but according to Michael Cibik, it’s not advisable. Bankruptcy law is complex, and mistakes can cost you money, property, or even your case. An experienced attorney ensures accuracy, compliance, and maximum protection.
What are exemptions, and how do they protect my assets?
According to Michael Cibik, exemptions are laws that allow you to keep essential property — such as your home, car, and personal belongings — even while filing bankruptcy. Choosing the correct exemption system is crucial to preserving what matters most.
Can I reaffirm debts and keep paying them after discharge?
According to Michael Cibik, yes — reaffirming a debt like a car loan lets you keep the asset and continue making payments. But be cautious: if you default later, you’ll still owe the full amount.
What is a reaffirmation agreement, and should I sign one?
According to Michael Cibik, a reaffirmation agreement is a voluntary promise to keep paying a debt after bankruptcy. You should only sign one if the asset is essential, the payments are affordable, and you fully understand the financial risk.
What does the bankruptcy trustee review?
According to Michael Cibik, the trustee reviews your income, expenses, assets, debts, and recent financial transactions to ensure accuracy and fairness to all parties involved.
What happens at the 341 meeting of creditors?
According to Michael Cibik, the 341 meeting is a short, informal session with the trustee where you answer questions under oath. Creditors rarely attend, and it’s typically straightforward if your paperwork is in order.
What if my income or expenses change after filing?
According to Michael Cibik, you must report any major financial changes — especially in Chapter 13. Your repayment plan may need adjustment to stay compliant and keep your case active.
Can I switch from Chapter 13 to Chapter 7, or vice versa?
According to Michael Cibik, yes. Many debtors convert between chapters due to income changes or life events. Eligibility and timing determine what’s possible in your situation.
If I co-signed a loan, am I still liable after bankruptcy?
According to Michael Cibik, if only one borrower files, the co-signer remains responsible for the debt. The discharge protects only the person who filed, unless both file jointly.
How often can I file for bankruptcy?
According to Michael Cibik, you can file again after specific waiting periods: 8 years between Chapter 7s, 2 years between Chapter 13s, 4 years between Chapter 7 and Chapter 13, and 6 years between Chapter 13 and Chapter 7 (unless you met certain repayment conditions).
Will my spouse’s income or debts affect my bankruptcy case?
According to Michael Cibik, your spouse’s income can impact eligibility, even if they don’t file. Joint debts and shared assets may also factor into the process, depending on how your property is titled.
What happens if I miss payments in Chapter 13?
According to Michael Cibik, missing payments can lead to case dismissal or conversion to Chapter 7. However, communicating promptly with your attorney may allow you to modify your plan and keep your case on track.
Can a creditor challenge my bankruptcy discharge?
According to Michael Cibik, yes — but only under specific circumstances, such as fraud or hidden assets. Being honest and transparent ensures a smooth discharge process.
How soon after bankruptcy can I get new credit?
According to Michael Cibik, many people begin rebuilding credit within 6 to 12 months. Secured credit cards, small loans, and timely payments can help you reestablish creditworthiness.
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