Spring is a Great Time for a Fresh Start

Bankruptcy law is often described as giving filers a "fresh start", and this is true for a lot of reasons. Whether your finances are tied up with credit card debt, a lawsuit, medical bills, or a repossession (to name just a few problems), bankruptcy will help you back on your feet.

The biggest problem for many of my clients is that they cannot get out from under older obligations brought about by temporary unemployment, illness, or other misfortune. These problems lead to lawsuits, penalties, fines, fees, and other costs that can quickly dwarf the underlying obligation. $5,000 in credit card debt accumulated during a spell of unemployment can quickly become $10,000 with interest, court costs, etc. Ongoing interest can make it impossible to ever hope to pay off the debt. Bankruptcy can stop the spiral.

The bankruptcy discharge eliminates a wide range of debt. Credit cards, medical bills, car repossessions, payday loans, and sometimes even taxes can be wiped away. The bankruptcy exemptions allow you to "exempt" your personal property from being used to pay your creditors, so in the VAST majority of bankruptcy cases, you will not lose your home, car, personal possessions, bank accounts, retirement funds... or anything.

Bankruptcy really is a "fresh start", as opposed to "starting at zero". You keep your property and income, and clear out the old debt (and penalties, fines, etc.). Bankruptcy allows you to move forward without the burdens of the past without giving up your possessions. You'll keep your car to go to work, your home to live in, your retirement accounts, and everything else you need to be productive going forward.

Most surprisingly for most of my clients, your creditor score will usually INCREASE. You read that correctly. This is true because your ratio of debt disappears. Old lawsuits also destroy your credit, so eliminating them through bankruptcy improves your credit profile.

Spring is a time for personal growth and fresh starts. Contact us to discuss whether or not bankruptcy is an option for clearing up your financial problems faster than you ever imagined. I am an experienced Pittsburgh bankruptcy attorney who will be happy to review your situation in a free consultation.

New Year, New Start

New Year's Day is a day for looking back, but also a day for resolutions and fresh starts. New Year's resolutions need not be related to dropping weight or working out. You can also resolve to fix your finances.

Credit card debt, late payments, missed bills... they can all add up to wear you down and break your spirit. But, this doesn't need to be the case. It might not seem like you have options (credit card companies don't want you to think you do!), but you do. Just a few options at your disposal:

• Chapter 7 bankruptcy- if you qualify, it wipes out most types of debt (credit cards, medical bills, payday loans, creditor lawsuits, etc) AND allows you to keep ALL of your property!
• Chapter 13 bankruptcy- a bankruptcy reorganization, Chapter 13 provides lots of options. You can pay back taxes, catch up a mortgage deep in arrears, pay credit cards at 0% interest. It's a great way to get your finances in order with Court protection.
• Debt settlement negotiations- I can also negotiate directly with your creditors. They know I can file a bankruptcy, so they are a lot more open to listening to my offers than your own experience with creditors would make you believe.

There is no reason to let your finances and debt weigh on your thoughts going into 2016. The law is often on your side, so use it! You can be feeling the relief you have been hoping for before the weather turns warm.

I always offer a free, in-person consultation. Contact us to set one up today. I'm an experienced Pittsburgh bankruptcy attorney who has helped countless people just like you. I'm happy to listen, discuss, and plan with you. Let's make 2016 a happier, financially healthier, year for you!

What Are Post-Petition Debts?

Filing bankruptcy means dealing with and understanding lots of different types of debt... you'll be told about secure and unsecured debt, dischargeable and non-dischargeable debt, and pre-petition and post-petition debt (just to name a few!). It can get pretty confusing.

The question of what constitutes "post-petition" debt is an important one. In short, post-petition debts are any debts you incur after filing bankruptcy. Post-petition debts are so important because they are generally not dischargeable (there is another type of debt popping up). They don't go away after bankruptcy.

If you open a new credit card account or take out a new car loan after filing bankruptcy, the bankruptcy does not eliminate that debt, even if you wish to return the property. If you borrow from a friend or family member, or get medical treatment after filing, you will probably be facing a post-petition debt. These post-petition creditors will be free to sue you after the bankruptcy automatic stay ends at the discharge of your case.

Beyond these obvious examples, there are some ongoing debts that may be considered post-petition debts. Utilities, phone and cable bills, and taxes will all be due after filing bankruptcy, even if the amount you owed before filing (PRE-petition debt) is discharged. Taxes will be due as always, so make sure you are prepared to pay them.

Your car and mortgage payments will continue after bankruptcy, assuming you wish to retain the property. In a Chapter 7 bankruptcy, the payment must be made as normal or the property can be repossessed or foreclosed upon. You must be current on these payments at the time of filing bankruptcy. In Chapter 13 bankruptcy, the payments will be made through the bankruptcy plan.

It is important to point out that debts accrued during your Chapter 13 bankruptcy plan (which lasts 3 to 5 years) are NOT discharged, even though you are technically "in bankruptcy". Once again, only the debts from before the date of filing are discharged. Not only will post-petition debts survive your Chapter 13 bankruptcy, you must also get Bankruptcy Court permission to take on certain post-petition obligations, such as a new car payment.

If you have any question about what constitutes a post-petition debt, be sure to clarify it with your attorney before filing.

Summertime and Debt Problems

Memorial Day has passed, and summer is officially here. As a Pittsburgh bankruptcy attorney, I have always found there is a noticeable dip in people calling to consult about filing bankruptcy in the height of summer (and Christmas, as well). It makes sense in a lot of ways. It's a time to enjoy the outdoors (those days are certainly limited in Pittsburgh and Western Pennsylvania!) and it is the time most families use to take a vacation. It's not a natural time to think about debt.

However, there are several circumstances when you should probably put off thoughts of BBQs and the beach, even just for a couple hours to consider your options in a free consultation.

1. Creditor lawsuit- if a creditor has sued you, you might be facing a default judgment and resulting lien on your property. This includes liens on bank accounts, which could lead to direct deposit paychecks being lost to your creditor. Chapter 7 and Chapter 13 bankruptcy can wipe out these lawsuits and liens. Filing a bankruptcy is something you should consider immediately if you are facing a lawsuit. My office can inform you if any lawsuits are pending.
2. Increase in income- if your income is due to increase in the near future, you may want to consult a Pittsburgh bankruptcy attorney immediately. The increase in income could push you from a Chapter 7 to Chapter 13 bankruptcy, which means you will need to repay some or all of your creditors. It could also increase the amount of money that must be repaid in a Chapter 13 bankruptcy. Commissions and bonuses also count as "income" for bankruptcy purposes, so if you get these annually in summer, now is the time to act in filing bankruptcy. Timing is always important in bankruptcy, and it shouldn't be dictated by the weather.
3. Filing a bankruptcy takes time- Setting up a payment plan, collecting all the documents needed to file, and completing the required courses takes some time and effort. It's normally a process that takes weeks, even months in complicated cases. The sooner you start, the sooner you can be finished, and the process won't bleed into important things (like Steelers season)
4. Stop harassing calls and letters- nothing can dampen a nice summer faster than a string of harassing phone calls and letters from a creditor. Chapter 7 and Chapter 13 bankruptcy can stop this contact through the "automatic stay", which occurs immediately upon filing. Once a bankruptcy is filed, your creditors are forbidden by the bankruptcy automatic stay from contacting you in any way. Enjoy your summer in peace and quiet.
5. The pluses of bankruptcy outweigh the negatives- While summer may not seem like the ideal time to file bankruptcy, it really not that hard to do. It's a lot easier to enjoy your summer when your mind is free and clear from concerns about debt. If you can do something affordable, that doesn't take too much effort on your part, and it removes perhaps your greatest, most pressing concern... why wait until Fall?

I am an experienced Pittsburgh bankruptcy attorney who can help you consider all your options, bankruptcy or otherwise. Summer is actually a great time to give yourself a new financial start. Contact us today to set up a free consultation.