Law Practice Area Definitions and Bankruptcy Basics
Types of Bankruptcy
Bankruptcy has different types of filing. If you are an individual, we will be talking to you mostly about chapter 7 and chapter 13. If you are a corporation going out of existence, we would be discussing a chapter 7. Corporations that wish to maintain the business and not close, file chapter 11 for debt relief. Every situation and case is different. A chapter 7 or chapter 13 for you could mean something very different from stories you heard from relatives and friends. We avoid telephone appointments as the analysis needed is detailed and involved and must be looked at in the entire scheme of things. The decision about what will happen depends on your marital status, income and expenses, household size, assets and equity in assets, how the assets are held and types of debt and when incurred.
Do not listen to those creditors who tell you the laws changed and cannot file. Do not listen to creditors who tell you that you will never get credit again or that you will lose everything if you file bankruptcy. These are collection practices and are usually false. Do not listen to people you know about what will happen as their situation is different than your situation. Do not think that you make too much or that you have assets you will lose. Bankruptcy protections and exemptions are powerful, and in Pennsylvania, married couples have the additional option of electing state exemptions protecting marital assets when the debt is just the debt of one of the spouses.
Chapter 7 Bankruptcy
Chapter 7 is known as a liquidation. However, most people are filing chapter 7 cases because they are a no asset case. That means that the property they do have is exempt and protected by law and cannot be touched by a trustee or creditors. A basic chapter 7 takes 3-4 months and only involves one brief meeting with a chapter 7 trustee. The result is a discharge order wiping out the debt and allowing you to keep your assets. The purpose of a chapter 7 is a fresh start. Certain things are not dischargeable and can be discussed at any appointment with your board certified attorney. Do not think that the law changes in 2005 have made it impossible to file a chapter 7. Even above median income debtors may be excepted from the means test or pass the means test even if above median income. That analysis will be done at your appointment. Businesses looking to close also file chapter 7 cases. The business cannot operate after filing. The chapter 7 trustee looks at the corporate assets to determine if there are assets to liquidate. Corporations do not get discharges. They just close.
Chapter 13 Bankruptcy
Chapter 13 is known as a reorganization. Individuals who file a chapter 13 normally are filing to protect and keep property that would have been at risk in a chapter 7 case. Individuals with mortgage arrears to restructure or nondischargeable taxes or nonexempt equity in assets or high-income debt are typically the ones filing for chapter 13 relief. In a chapter 13, you can elect to retain or surrender certain collateral like cars and properties. Generally, you need to repay the secured and priority debts through a 3 to 5-year plan. The length of the plan is determined by the means test and your budgetary needs. Unsecured debt such as credit card debt may or may not need to be paid back. A plan can require anywhere from nothing to a hundred percent to these creditors depending on many factors. Only individuals can file chapter 13. Married couples can file jointly. But, married individuals who have debt and their spouse does not need to file can do so alone.
Chapter 11 Bankruptcy
This is a business reorganization. However, individuals who exceed the debt limits for a chapter 13, but wish to enter into a reorganization, can file chapter 11. Chapter 11 cases are expensive and involved. While we can discuss the basics of chapter 11, our firm does not handle chapter 11 cases. We would attempt to match you with a competent chapter 11 attorney.
Repeat Filers of Bankruptcy
Our firm represents people who have tried cases in the past that failed for whatever reason. Bankruptcy court almost always gives you a second chance, if not more chances. Unexpected events may have occurred and you now have a change in circumstances that you believe will allow you to succeed with another chance. We can access your old case and evaluate the changes and chances of a new case. We will honestly and frankly advise you.
Call us for a free consultation
Meeting and talking with our attorneys is free. You will be relieved to just learn of your options and discussing options and perhaps discover that light at the end of the tunnel. Meet with us, get informed, go home, discuss the options at home with loved ones and decide what you are going to do in a non-pressure environment and come back to see us if and when you are ready.
If you or someone you know in Philadelphia, Pennsylvania, or within the surrounding cities and counties of Pennsylvania, needs debt consolidation legal counsel or the assistance of an experienced bankruptcy lawyer, contact the attorneys of Cibik & Cataldo, P.C., today at (215) 596-4794 to schedule a consultation with an experienced Philadelphia debt-relief lawyer.