Bankruptcy Law Practice Areas and Definitions

PENNSYLVANIA NEW BANKRUPTCY LAWS:

Bankruptcy is a federal court process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as liquidation or reorganization. Under a liquidation bankruptcy (Chapter 7), a claimant files to eliminate debt through the bankruptcy court. Under a reorganization bankruptcy (Chapters 13), a claimant files a plan with the bankruptcy court proposing how to repay creditors.

As of October 17, 2005, the requirements in which a debtor may file Chapter 7 bankruptcy have changed under the Bankruptcy Abuse Prevention and Consumer Protection Act. Debtors are required to seek budget and credit counseling six months prior to filing, financial "testing" is required to determine the debtor's capacity for debt repayment, Chapter 7 cannot be filed if the household income is greater than the median household income as deemed by the state, and state exemptions cannot be applied unless the debtor has resided at current residence for over two years.

Due to the imposed requirements for Chapter 7 bankruptcy as set forth by the new laws, debtors who are presently eligible to file under Chapter 7 will have to file under Chapter 13 bankruptcy instead, in which individuals and creditors agree to a court-imposed plan that requires some or all debts be repaid over five years, with an appointed trustee assigned to monitor the repayment process. Bankruptcy filings will continue to be recorded on an individual's credit report for seven years in the case of Chapter 13, and up to ten years for Chapter 7. For additional information related to New Bankruptcy Laws, contact the bankruptcy Attorneys of Philadelphia, Pennsylvania Cibik & Cataldo, P.C.

CHAPTER 7:

Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual, corporation, or a partnership. Under chapter 7, the debtor is allowed to claim certain property exempt. In exchange for this, the debtor gets a discharge, which means that the debtor does not have to pay certain types of debts.

CHAPTER 13:

Chapter 13 permits individuals to keep their property by repaying creditors out of their future income. It is not available to corporations or partnerships. Each chapter 13 debtor proposes a repayment plan that must be approved by the court. After completion of payments under the plan, chapter 13 debtors receive a discharge of most debts.

PENNSYLVANIA DEBT CONSOLIDATION:

Contrary to popular belief, debt consolidation is not a loan. Debt consolidation is a process in which debt is restructured into one low monthly payment. It further enables a consumer to reduce the amount owed and thereby eliminate interest.

Very often a consumer can detect warning signs of being in too much debt long before any collection notices are received. If more than two of the following signs apply to you, it is best to contact the bankruptcy Attorneys of Cibik & Cataldo, P.C., to discuss your debt consolidation options:

• You have begun charging to your credit card essential expenses like food and daily expenditures
• You are making only the minimum payments on your credit cards each month
• You are near the limit of your credit cards
• You have too many credit cards
• You are unsure how much money you owe creditors

PENNSYLVANIA BANKRUPTCY FRAUD:

Bankruptcy fraud is a bankruptcy filed with criminal intent; i.e. the intention of evading payment for goods or services although the consumer has funds for repayment, or accepting payment for goods or services but not supplying such services. Common types of bankruptcy fraud include petition mills, false oath, concealment of assets, and fraudulent conveyance.

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 866-745-6190, or use the contact form provided on this site to schedule a consultation with an experienced Philadelphia debt-relief lawyer.