David R. Black's Bankruptcy Legal Group
a division of Black, Stranick & Cella, P.C.
Media Bankruptcy FAQs
What types of bankruptcy relief are available to consumers?
Generally, an individual person, or consumer, may file for either Chapter 7 bankruptcy or Chapter 13 bankruptcy protection.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a way for many consumers to eliminate, or discharge burdensome unsecured debts, such as credit cards, medical bills, personal loans and utility bills. At the same time, Chapter 7 alloaws consumers to keep certain property they own. This is known as exempt property. Exempt property may include equity in a home, an automobile, cash in the bank or investments, retirement accounts, furniture, clothing and other items. In many cases, all of a consumer debtor’s property is exempt under the Bankruptcy Code. When that is the case, there is nothing to liquidate, so the case mainly amounts to discharging eligible unsecured debts. Where a debtor has non-exempt property, it must be surrendered to a court officer known as a trustee.
When you visit the Bankruptcy Legal Group for a free consultation, we will be able to tell you whether or not all of your assets are exempt. Chapter 7 cases usually take the shortest amount of time to complete of any kind of bankruptcy case. Typically, a case can be completed within approximately 4 months from the date it is filed with the court. During that time, the debtor is protected by an important court order, known as the automatic stay, which prevents creditors from communicating with or harassing debtors in any way.
Am I eligible to file Chapter 7 bankruptcy?
Consumers now must qualify under the means test before they file for Chapter 7 bankruptcy. If your income is lower than the median state income for your family size, you probably are eligible to file for Chapter 7. If your income is greater than the median level (again, considering the size of your family), we calculate your income and your allowable expenses to determine your eligibility for Chapter 7. We then review the means test results with you after it is completed. If you do not meet the requirements for filing Chapter 7, we will discuss alternative remedies with you. This usually includes filing a Chapter 13 bankruptcy in Media.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is for people with a regular source of income who generally have some money left over after paying basic monthly living expenses. Chapter 13 offers a consumers a way of paying back a certain portion of their debt, typically over a period of between 3 and/or 5 years. Simply stated, Chapter 13 gives a consumer the protection of the Bankruptcy Court (by way of an automatic stay) while the debtor catuches up on certain past-due debts, such as mortgage arrears, recent income taxes, alimony/child support, and the like. The Bankruptcy Legal Group will prepare your Chapter 13 plan so that you make only one monthly payment to your court-appointed Chapter 13 trustee. The trustee then pays the creditors identified by your plan. At the end of the payment period, all your remaining dischargeable debts are discharged, whether they were paid or not.
Chapter 13 generally works well for consumers facing any of these situations:
- Mortgage foreclosure or a sheriff's sale
- Individuals who own more property than federal law allows them to keep in a Chapter 7
- Consumers who are behind on their debts, need court protection while they are catching up, and do not qualify for filing (or want to file) a Chapter 7 in Media.
Will filing bankruptcy cause me to lose my home or car or prevent me from buying a house or car later?
Usually not. You may choose what property you wish to continue to pay for and keep after bankruptcy. In most cases, the equity in a consumers home and car is protected by the bankruptcy court. So, most debtors do not lose these assets unless they voluntarily decide to surrender them because, in certain cases, these assets have no equity and the monthly payments are creating financial hardship for the consumer.
Will I ever be able to obtain credit again?
Absolutely! In many cases, filing for bankruptcy actually improves a person’s creditworthiness right away. People contemplating bankruptcy usually already have bad credit. At that stage, bankruptcy may be the fastest practical way to improve credit scores because a bankruptcy discharge relieves you of all liability for your discharged debts. This gives you a fresh start which in many instances makes lenders more willing to extend you credit. In addition, the law generally requires that debtors who file for bankruptcy may not file another one for several years afterward. Prospective lenders are often aware of this, and therefore, when they consider a loan application, they are not afraid of a second bankruptcy in Media.
Will bankruptcy wipe out all of my debt?
It usually can, with a few exceptions:
- Taxes that are less than three years old usually cannot be discharged.
- Student loans cannot be discharged, except in cases of extreme hardship.
- Restitution obligations related to criminal convictions usually cannot be discharged.
Sometimes, even some of those debts can be negotiated. A bankruptcy discharge relieves a debtor's personal liability for most unsecured debts—an unsecured debt is a debt that is not tied to a particular property item (collateral). Where a debt has been tied to collateral, the lender may still have the right to repossess or foreclose on the collateral if the debt is not paid. Chapter 13 plans often can often restructure secured debts to a manageable level so that you can keep the collateral and pay the debt over time in the Chapter 13 plan. During your free consultation, we will review any secured debts when and ways to address them.
What are the attorney fees for bankruptcy cases?
Paying a Media bankruptcy attorney is not high on most people's list of priorities. Sadly though, it is virtually impossible to consider filing bankruptcy without an attorney. And, considering the changes contained in the new law, paying an experienced bankruptcy lawyer is money well spent. Many of our clients come to us after making the mistake of wasting time and money on a less experienced firm.
You can obtain a free consultation about how bankruptcy can help you with an attorney at our office. After we discuss your bankruptcy options with you, we will give you a written agreement explaining our fees and what services are included in our representation if you decide to use our services. Most cases involve a flat fee rather than an hourly fee.
Will I have to go to court?
In most consumer bankruptcy cases, the debtor attends only a proceeding called the Section 341 Meeting of Creditors—usually about a month after the case is filed. There, you will meet with a court-appointed bankruptcy trustee, and any of your creditors who want to attend may do so. We will accompany you to the meeting, which usually is a short, simple meeting where the trustee reviews your documents and asks questions about them and/or about your financial situation. Typical questions involve whether all of your debts and assets are listed and whether the material in the documents filed in the case is correct to the best of your knowledge. A creditor attending the meeting may ask questions concerning the debt owed to that creditor. In a Chapter 13 case, you may also need to attend a brief confirmation hearing where the bankruptcy judge decides whether to approve your repayment plan. We will go over the preparations for the meetings during our consultations with you.
What do I do if my mortgage is being foreclosed?
If your home mortgage is being foreclosed because you are behind on payments, you can stop the foreclosure and get time to catch up by filing a Chapter 13 plan. This is one of the main purposes Congress had in mind when it enacted Chapter 13—giving homeowners a chance to keep their homes while requiring their lenders to allow them time to catch up on payments they have missed.
Here is how it works: Filing a bankruptcy case prevents the foreclosure sale from taking place, even if it has already been scheduled. You then start making the regularly scheduled future mortgage payments in the amount of the usual payment. The lender is legally required to start accepting the payments again. You also need to start paying the court-appointed Chapter 13 trustee a monthly payment to catch up the back payments. You have between three to five years to catch up.
The lender is required to wait, and cannot foreclose, as long as you make the regular monthly mortgage payments along with the monthly trustee payment. Even if you are not sure you can successfully complete this process because of your income, you can obtain valuable time to remain in your home by filing a Chapter 13 case. You can almost always extend the time you get to stay in your home by about 12 months by filing Chapter 13—even if you do not make any payments at all on the mortgage after filing the case. Of course, the goal is to successfully complete the plan payments and keep your home. The law requires that we show the court a reasonable plan you can successfully complete.
Call our office to find out how Chapter 13 can help you keep your home during your free consultation with one of our attorneys. There is no obligation, and it is certainly a good idea to know what your rights are regarding your home mortgage.
Stop worrying and call David R. Black's Bankruptcy Legal Group
If your financial situation seems hopeless, call the Bankruptcy Legal Group today at (610)-566-8500 or toll free at (866)-491-6275 for a consultation with one of our experienced Media bankruptcy lawyers. We strive to do our absolute best to get you the relief you need when you need it.
We are a debt relief agency. We help people file for relief under the Bankruptcy Code.
