Is Bankruptcy the Answer?

Written By: Ali Audi | August 19, 2015 | No Comments

We Sometimes Talk You Out of Filing for Bankruptcy

I’ll help you decide if Bankruptcy is your best option.

After talking things over with our Bankruptcy Attorneys, some clients decide not to file. You may wonder why we would talk someone out of a service that they had wanted, and likely cost ourselves billing in the process. The answer is that we’re a different kind of law firm. We have a reputation for being the most family and people-oriented law practice in Berks County.

Unlike many Bankruptcy Lawyers, the goal of our consultation with you is not to

• gathers your information;
• collect your money; and
• start filing.

Our consultation’s goal is to

• gain detailed information about your personal and financial situation;
• discuss your goals;
• and lastly, recommend the best way to achieve your goals which may or may not include immediately filing for bankruptcy.

Bankruptcy Process for Consumers

First, we will briefly define the general bankruptcy process for consumers.

• Consumers can usually file a bankruptcy petition under Chapter 7 or Chapter 13 of the Bankruptcy Code. In some instances, they can even file under Chapter 11.
• Each chapter has its own specific rules and requirements, both prior to the filing and after.

Chapter 7 Bankruptcy

• Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts.
• Debtors whose debts are primarily consumer debts are subject to a means test designed to determine whether the case should be permitted to proceed under chapter 7. The Means Test will determine how your income relates to the median income of the area in which you live.
• Under chapter 7, you may claim certain of your property as exempt under governing law. A trustee may have the right to take possession of and sell the remaining property that is not exempt and use the sale proceeds to pay your creditors.
• Most of your debts will be discharged if you do not have sufficient assets to sell. Some debts, like some taxes and student loans, are not dischargeable.

Chapter 13 Bankruptcy

• Chapter 13 is designed for individuals with regular income who would like to pay all or part of their debts in installments over a period of time.
• You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.
• Under chapter 13, you must file with the court a plan to repay your creditors all or part of the money that you owe them, using your future earnings.
• The period allowed by the court to repay your debts may be three years or five years, depending upon your income and other factors.
• After completing the payments under your plan, your debts are generally discharged. Some debts are not dischargeable.

Filing a Bankruptcy Petition Triggers an Automatic Stay

The automatic stops all litigation involving the debtor, including sheriff sales and other collection activities.

Factors to Consider When Considering Bankruptcy

Some factors that we consider when deciding whether a client should file bankruptcy include

• Kinds of Debts – is important because, as discussed above, not all debts are dischargeable in bankruptcy.
  • The most common instance of this is tax debts.
    • Generally, in order to be discharged, a tax debt must be for income taxes, be at least 3 years old and be at least two years after the tax return was filed.
    • A tax lien may stay on your property, even if the personal tax obligation is discharged. So if you do not meet these criteria, bankruptcy may not be your best option.
    • The IRS has a process to settle tax claims for a reduced amount. The Offer in Compromise program can be a complex process. You
      • must provide information regarding your income and assets;
      • make an offer to pay off the reduced amount in either a lump sum or in monthly payments; and
      • begin making the payments until the IRS has reviewed your offer and either accepts or rejects it. We can help you through this process.
• Level of Available Income – is a large factor in determining your options.
• You have the income to handle your debts but just need to figure out a way to make it work. We can work with you to do that by
  • determining what a payment plan would look like in a bankruptcy filing. You then institute that plan without filing the petition. Creditors will often stop calling as long as you are making payments. They would rather receive something than take the risk of having the court discharge the debts in a bankruptcy.
  • referring you to local professionals that can help you sell off property and other assets to help finance your payment plan. Finally, we can contact creditors on your behalf and negotiate a settlement to their claim based on your income and ability to pay.
• Whether There is Pending Legal Action –
  • If there is a pending sheriff’s sale of your property, you may have fewer options and may need to file the bankruptcy to get the protection of the automatic stay. But, if you do not want to keep the property, then it may be best to delay the filing of the bankruptcy petition until after the sale has finished.
  • However, if legal action has not commenced, then you may be able to negotiate a settlement with your creditors and make payments that you can afford in order to pay off the debt. On the other hand,  These are issues that the Miller Law Group can discuss with you in order to find out what the best option is for you.
• Negative Effects that a Bankruptcy Has on Credit History – we can explain how long it will impact your credit and steps you can take to repair your credit history.
• Other Costs of Bankruptcy

You Won’t Find Better Bankruptcy Attorneys in Reading or Berks County to Help You Decide

We’re proven, experienced and expert Bankruptcy Lawyers. We have

• • • 40+ years’ of experience helping Bankruptcy clients in Berks County around Reading, PA.
    • a full range of expertise in other legal areas impacted by Bankruptcies including
      • Business
        • Contracts;
        • Contract Disputes; and
        • Dissolution;
      • Estate Planning;
      • Divorce;
      • Spousal Support and Alimony; and
      • Child Support
  • a reputation for giving clients genuine emotional support and respect;
  • explain legal matters in plain English, so you don’t have to be a Bankruptcy Lawyer versed in legalese to have a conversation with us; and

• make sure you walk away knowing where you’re at, what will happen next, when it happens and that things will get better and you’ll be alright.

The Bankruptcy Lawyers you’re looking for are right here waiting for you. Contact Us Online or Call Us at 610-670-9000 today. We’ll start helping you get your finances, and your life, back on track.

Miller Law Group’s Berks County Law Offices are in West Lawn near Reading, PA.