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Philadelphia Bankruptcy Attorney Answers the Question of How Long Must You Wait to Purchase a Home after Filing Bankruptcy

Filing for bankruptcy is no easy decision to make. For many, there is a sense of failure or loss. For others, it can be a clean start and an opportunity to start over. Let’s face it: financial education in this country is poor, and that’s putting it mildly! We learn by doing, and sometimes we get it wrong. Unless we are famous entertainers, world-class athletes, captains of industry, or the offspring of one of those people, financial crises are nothing new to us.

Fortunately, filing for protection under the bankruptcy laws is not a life sentence. People can and do recover financially despite filing more than one bankruptcy petition. However, the answer to the question about how long you must wait to purchase a new home after declaring bankruptcy depends on your financial history and the type of mortgage for which you have applied.

For ease of this discussion, we will assume that you satisfy all other requirements for a mortgage so our focus can turn to answering the question at hand. One thing all mortgage programs require is a set period of time from when you filed your bankruptcy petition to when you are applying for a mortgage. Mortgage companies call that length of time “seasoning.”

For an FHA mortgage, the length of time you must wait depends on whether you filed a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. The waiting period for a Chapter 7 bankruptcy petitioner is two (2) years from the date of discharge before you can lawfully apply for a mortgage. The lending institution might require a more extended waiting period beyond the minimum required by law.

Chapter 13 repayment programs add a level of complexity to an FHA application. Chapter 13 bankruptcy rules permit you to apply for a mortgage during repayment as long as your payments are verified and you receive written permission from the bankruptcy trustee. You must have made consistent payments, meaning you have not missed one, for at least one (1) year.

Mortgages from the Veterans Administration (VA) are easier to obtain. Again, assuming all pre-requisites are satisfied, then you can apply for a mortgage from the VA after two (2) years from the date of discharge.

Conventional mortgages from a bank or mortgage company have longer waiting periods. If you have filed a Chapter 7 bankruptcy, then you must wait for four (4) years from the date of discharge before you apply for a mortgage. If you are in a Chapter 13 repayment plan, then you can apply two (2) years after the discharge date. Be aware, however, that if the Chapter 13 plan was dismissed rather than discharged, you must wait for four (4) years.

If you would additional information on whether filing for Bankruptcy is a good move for you then you should call Philadelphia bankruptcy attorney David M. Offen.  He has over 20 years of experience helping people clear their debts and move on with their life.

For more information Call the Law Offices of David M. Offen’s at 215-625-9600 to get your questions answered and to schedule a free consultation.

The post How Long Must You Wait to Purchase a Home after Filing Bankruptcy appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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As a Philadelphia Bankruptcy Lawyer who has filed well over 10,000 Chapter 7 and Chapter 13 Bankruptcy Petitions, I have always stressed the importance of knowing your Pennsylvania Bankruptcy Exemptions. The issue of Bankruptcy Exemptions is one of several key factors that are used in deciding whether to file for bankruptcy protection by filing a Chapter 7 Bankruptcy, filing a Chapter 13 Bankruptcy or choosing not to file for Bankruptcy at all.
I will give a general idea of the Bankruptcy Exemptions available to people who choose to file for Bankruptcy relief and discharge their debts – under either Chapter 7 or Chapter 13.

A lot of people in Pennsylvania who want to file for bankruptcy first ask questions such as what will happen to their personal assets such as bank accounts, furniture, automobiles, retirement accounts, jewelry and of course, and of utmost importance, their home. Many people come in to us with the belief that filing for bankruptcy will cause them to lose all of their property. This is not at all the case. When filing for Bankruptcy protection in Philadelphia most people can use their exemptions to protect all of their property.

Pennsylvania Bankruptcy Exemptions

The United States Congress as well as the Pennsylvania Legislature have enacted laws which protect many assets from being taken by creditors in the event you file a Bankruptcy case. This means you can keep the assets after filing for Bankruptcy protection and your creditors are not allowed to go after those assets. There are Federal Bankruptcy Exemptions which were enacted by the United States Congress. The Pennsylvania Bankruptcy Exemptions were enacted by The Pennsylvania Legislature. The following will be a brief discussion of the exemptions available when people file for Bankruptcy protection to obtain debt relief in Pennsylvania.

The Pennsylvania Bankruptcy Exemptions only allow you to exempt $300 in any property. In addition the Pensions of City employees, County employees, Municipal employees, Police officers State employees, most wages, unemployment compensation, workers compensation, veterans benefits, as well as many other public benefits are exempt as are clothing, Bibles, schoolbooks & sewing machines. Uniform & accoutrements are also exempted, as is Business Partnership property. There are also other Pennsylvania Bankruptcy exemptions that may apply to your situation.

The Federal Bankruptcy Exemptions provide as follows with an important provision that you should be aware of if the Bankruptcy is a joint filing;
If the filing for Bankruptcy is for both – a husband and wife – then the exemptions are doubled as the law allows the husband and wife to each claim the full amount of their exemptions.

The following are some of the most important bankruptcy exemptions which you are allowed under federal law:

You are permitted to keep $23,675 of equity in your primary home. This is known as the homestead exemption; you can use it to protect residential real estate as long as you live in the property. However, this exemption does not extend to rental properties or to investment properties. It also does not apply to a home in which you neither live in nor are moving into. In addition to the homestead exemption, you are allowed to exempt other personal property as follows;
Your vehicle up to a value of $3,775.
Jewelry with a value of up to $1,600.
Household items worth up to a total of $12,625, as long as no single item is worth more than $600. This includes furniture, kitchen appliances, clothing, televisions, etc.
Tools for your work, including books, valued up to $2,375.
A total of $12,625 which is the amount you can borrow from a life insurance policy, or other life insurance policy interest.
All health aids.
Reasonable spousal and/or child support payments.
All Social Security, unemployment, veteran’s and/or disability benefits.
Personal injury compensation up to $23,675 (this is for economic damages only). These amounts do not include money recovered for pain and suffering.
Qualified Tax Exempt Retirement account, Personal IRAs and Roth IRA’s with a cap of $1,283,025.
The wildcard exemption protects up to $1,250 in any property of your choice plus the unused portion of your homestead exemption up to $11,850. For example, you may use some of your wildcard exemption to protect your bank accounts, a fur coat and any equity in your vehicle in excess of the vehicle exemption of $3,775.

Choosing The Federal Bankruptcy Exemptions versus The Pennsylvania Bankruptcy Exemptions

If you live in Pennsylvania, you have the choice of using either the Federal Bankruptcy exemptions or choosing the Pennsylvania Bankruptcy exemptions. You cannot choose to use both the Federal Bankruptcy Exemptions and the Pennsylvania Bankruptcy Exemptions. You will find that the Federal Exemptions are generally more favorable than the Pennsylvania Exemptions with one big exception; If you own a house jointly with your spouse and you have a large amount of equity in the house, or if you own a substantial dollar amount of personal property that is jointly owned with your spouse and the personal loans or credit card debts are in one person’s name only – then you may find that you get a better result when choosing the Pennsylvania Bankruptcy Exemptions rather than choosing the Federal Bankruptcy Exemptions. That is because the Pennsylvania Bankruptcy Exemptions allow a joint property exemption without a specific dollar limit. This is a very big financial advantage for a jointly owned property where the debts are only in one person’s name.

The above lists include many of the available Bankruptcy Exemptions in Pennsylvania. However, it does not include all of the exemptions. Please note that there are also exceptions to the exemptions. For example while IRA’s can be exempt, if you inherit an IRA the rules change even though it is still an IRA. For any specific situation, you should contact an experienced Philadelphia Bankruptcy Attorney at The Law Offices of David M. Offen who can explain how the exemption laws apply to your specific situation. Do not rely on what someone tells you. Every case has its own set of facts and even the slightest difference between your case and someone else’s case can produce a totally different result.

How Exempt Property is Calculated

An exemption limit applies only to any equity you have in the property. Equity is the difference between what the property is worth and what you owe on the property. For example, let’s say that your home is valued at $100,000. You have a mortgage loan on the property in the amount of $60,000. In addition you also owe a home equity loan in the amount of $25,000. That means you have equity of $15,000 in your home. The same is true with your automobile or vehicle. Your vehicle is worth $17,000. You owe $14,000 on a vehicle loan. That means you have $3,000 equity in your vehicle. In such a case, if we choose the Federal exemptions, your $15,000 equity in your home is protected as well as your $3,000 equity in your vehicle. By choosing the Federal Bankruptcy Exemptions both the home and car are protected and the home and the vehicle are not permitted to be sold to raise money for creditors. By knowing how much equity you have in property we are able to maximize the dollar amount of your exemptions.

If you are under the exemption limits, as long as you are current with your mortgage or vehicle loan payments, these items can be protected when you file for bankruptcy relief.You will however, need to continue paying the mortgage on the house as well as the loan on the car when you file for Bankruptcy if you wish to keep them. Please note that if you are in arrears on your mortgage, then you can file a Chapter 13 Plan which gives you three to five years to get caught up on your mortgage arrears. You can also do the same if you are not up to date on your auto loan payments.

What happens if you exceed the bankruptcy exemptions? In other words you own more property than is available with the exemptions but you still want to keep all your real estate and personal property. To keep all your non-exempt property, you generally need to only pay the amount of non-exempt property. If you don’t have the funds available to pay, then you need to file under Chapter 13 Bankruptcy.

In other words, lets say that you have a baseball card collection that is worth $15,000 and the baseball card collection is not exempt. You want to keep the baseball card collection. If you filed a Chapter 7 Bankruptcy case, a Chapter 7 Trustee could sell off the $15,000 of non exempt property. The result is that you then have two options if you do not want the trustee to touch any of the baseball card collection. You could get the funds to pay the trustee the $15,000. However, this is something that we rarely see, as most people who come to us cannot come up with large sums of money to pay the Chapter 7 Trustee.

The second option; when the person’s assets exceed the allowable exemptions then most people’s choice in that situation is to file for Bankruptcy protection under Chapter 13. In such a case you would pay into a Chapter 13 Bankruptcy plan the monies over a period of 3 – 5 years to cover the amount of property that is non exempt. You get to keep all of your property. That is why it is important to talk with an experienced Bankruptcy Lawyer in Philadelphia and get the right answers on how to handle your financial situation.

There are also other situations that happen very often happen when you choose to file under Chapter 7 Bankruptcy. You may have non-exempt property but the Chapter 7 Trustee’s goal is to raise money for creditors. If the trustee would try to sell the property he or she would not be able to raise enough money to justify the sale of the real or personal property. In such a case, the trustee will not attempt to sell the property and will take no action. The trustee’s Chapter 7 case report indicates that the trustee is taking no action. This is called abandoning the property. You still keep the property, it just means that the trustee has chosen to take no action. In my experience over the years, after my clients have chosen the proper exemptions, I have found a Chapter 7 trustee to take action to sell property in less than one percent of cases over the years, which is really a very small amount of the time.

Our office has helped different members of the same family who need to file for Bankruptcy protection. Not only have we had to choose to file for Bankruptcy relief under different chapters, but in addition we have had to choose a different set of exemptions for each person. There is no general rule for a family. What is right for one family member may not at all be the best decision for a different family member. Some individuals are better served choosing to file for Bankruptcy using the Federal Bankruptcy exemptions, while other individuals are much better off choosing to file for Bankruptcy using the Pennsylvania Bankruptcy exemptions. The same applies to the type of Bankruptcy you should choose to file. Whereas one person will be better off filing for Chapter 7 Bankruptcy protection, another person will be in much better shape choosing to file a Chapter 13 Bankruptcy Petition.

To get the information you want regarding resolving your debt situation and your Bankruptcy questions, contact The Highly Experienced Philadelphia Bankruptcy lawyers at The Law Offices of David M. Offen today. We will help you make the right decision about which exemptions you should choose to use, which chapter of bankruptcy to file, and whether or not to Bankruptcy is right for you at all. For your free confidential consultation and to quickly get the right answers on the best choice to resolve your financial difficulties, Call The Law Offices of David M. Offen at 215-625-9600 today. We have helped over 10,000 individuals and families use the law to their advantage to resolve their financial difficulties. Let us show you how we can do the same for you.

The post Pennsylvania Bankruptcy Exemptions from a Philadelphia Bankruptcy Lawyer appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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How to file for Bankruptcy without a Lawyer in Pennsylvania is a question we are often asked. The better answer to that question is you are usually much better off being represented by an experienced bankruptcy lawyer. In fact, by using a bankruptcy lawyer who is very familiar with the law, you will find yourself better protected than if you file on your own in Pennsylvania. Ask yourself, “Would you want to represent yourself in a personal injury action against an Insurance Company”?

You need to answer a lot of questions when considering to file for Bankruptcy.

1. Is Bankruptcy the Right move for you?
2. Do you need to file Bankruptcy? If so –
3. Should you file under Chapter 7 or under Chapter 13?
4. Can you properly fill in all the answers to the questions on all of the Bankruptcy schedules?
5. Can you fill in the type and value on the Schedule of Assets – this list includes the following plus many other items – bank accounts, cameras, jewelry, cars, retirement plans, collectibles, computers, guns, jewelry, retirement accounts, life insurance, personal injury cases, security deposits, property you gave someone else, etc.
6. Schedule of debts including priority, secured and unsecured debts and the proper classification of each debt.
7. Allowed Exemptions for the property you own and do you choose to use the exemptions allowed under Pennsylvania law or under Federal Law
8. The Means Test – Scheduling your last six months income as defined by law and testing to see if you are under the Pennsylvania Chapter 7 Bankruptcy or Chapter 13 Bankruptcy means test or does your income fall over the means test.
9. Schedules of all Income and all Expenses
10. Statement of Financial Affairs where you need to supply correct answers to your financial situation over the last several years
11. Other required forms
Have you complied with the Pre-Bankruptcy filing Requirements?
Have you complied with the Post-Bankruptcy Debtor education course?

I will discuss in detail bankruptcy cases where a person filed on their own and wound up with substantial problems as a result of representing themselves. These and other cases are the reasons why when we are asked How to file for Bankruptcy without a lawyer in Pennsylvania we explain what can happen if everything is not done right.

1) A person filed bankruptcy on their own and chose to file under chapter 7 instead of 13. The individual was in foreclosure and wanted to get caught up on the mortgage and the car payments. Since the person chose chapter 7, the full arrears on the mortgage had to be paid up to date immediately. The right approach would have been to file Chapter 13 and set up the Chapter 13 plan to protect the home by repaying the missed mortgage payments and auto loan payments.

2) An individual filed a chapter 7 case without realizing that she could lose her property. She did not have the income to pay back all her debt. However, she did own, a house, almost free and clear with only a small mortgage balance. By choosing to file under chapter 7, the trustee is able to sell the property. Had a Chapter 13 bankruptcy petition and plan been filled, the home could be saved without a problem and the woman would only have been required to pay back her bills over 5 years with no interest, which she had the ability to do.

3) A person filed under chapter 13 to pay their bills back. This mortgage was up to date and he did not have substantial equity in the property. Based on his income and expenses, he should have filed under chapter 7. There was no need for him to be in a plan in which he repays his bills. His mortgage was up to date. Had he spoken to a bankruptcy lawyer prior to filing he could have filed under chapter 7 and not have been required to be in a plan making payments on his unsecured bills.

4) A person filed under Chapter 7 Bankruptcy. There was a substantial amount of money owed on the car, much more than what the car was worth. The vehicle had been purchased more than two and a half years earlier. The person wanted to keep the car. He would have been better off filing under Chapter 13. First of all, he could have reduced the debt on the car to almost half of the loan balance due to the current value of the car. Second, he could have reduced the interest rate from about 18% down to 6%. Third, he could have paid off the reduced loan balance and reduced interest rate over a number of years without having to pay back the credit cards and personal loans.

In a Chapter 13 case, where you make payments, you must calculate the Chapter 13 plan based on your situation and you must break down who the trustee must pay first, second, third, etc and how much should be paid to each creditor. It is quite rare for a Chapter 13 plan to be successfully completed without the assistance of an experienced Bankruptcy Lawyer.

When you file a Bankruptcy you need to appear before the Trustee at your Mandatory Section 341 Meeting of creditors whether you file under Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. At the Meeting of creditors, the trustee will examine your paperwork to make sure that every form has been properly completed, and all required documentation has been supplied. In addition, you want to be sure that you have chosen and claimed all of the proper exemptions to protect your real estate, your personal property, and other assets. The trustee will then ask you questions based on the paperwork filed with the Court, the documentation that has been supplied, and any outside sources the trustee checks and uses to verify the correctness of all of your answers. In addition, the trustee will review documents such as copies of tax returns, mortgage balances, car papers, bank account statements, life insurance statements, etc. Additionally, a Meeting of creditors tends to take longer when filing by yourself as the Trustee tends to question people longer under oath due to all of the required paperwork not usually being in order.

The hiring of an experienced Bankruptcy Lawyer  can be the best investment you ever make – saving you many many thousands of dollars. If Bankruptcy is not the right move, or if it will cause you a problem, then the Bankruptcy Lawyer will tell you that you should not file Bankruptcy at the present time and how to legally plan out what to do. If you don’t have the money to file bankruptcy right away, there are good lawyers who will give you time to make payments if you are filing a Chapter 7 Bankruptcy while starting to work for you right away, or who will file a Chapter 13 Bankruptcy even if you have little money to pay prior to filing. A knowledgeable Consumer Bankruptcy lawyer knows you don’t have a lot of money and will offer a free consultation. He or she can also help you figure out how to file Bankruptcy and what to do financially.

An improperly filed Bankruptcy can cause a person to lose everything that he or she owns whereas a Bankruptcy filed with an experienced Bankruptcy lawyer will in many cases just cause you to lose all of your debts. When you file for Bankruptcy without a Lawyer in Pennsylvania you face a lot of risks you might not have expected. When you have an Attorney representing you, the attorney fills out all of the forms based on the information you supply to your lawyer and your meeting of creditors tends to be quicker and better prepared for.

While you may ask how to file for Bankruptcy without a Lawyer in Pennsylvania, we believe you will be glad you picked up the telephone to call us. As one client that we filed for said to us, you are the best thing that ever happened to me. She also said the worst mistake she made was waiting over six months to come to our office when she would have been put at ease had she come in much earlier. Our office has helped over 10,000 individuals and families in the Philadelphia area get a fresh start by filing for Bankruptcy relief. You can call The Law Offices of David M. Offen at (215) 625-9600. We will guide you on how to get out of your debts in Pennsylvania.

The post How to file for Bankruptcy Without a Lawyer in Pennsylvania appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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Filing for bankruptcy is a big decision and it is important that you know how to choose the right Bankruptcy Lawyer for your case. Although it is an excellent way for honest people to get a financial fresh start, it is still a trying time for many people. In addition, the bankruptcy process is complicated for someone who is not experienced .  All documents must be correctly filled out and submitted on time. For these reasons, it is important to have a competent and compassionate expert to guide you through the filing process. Choosing the right bankruptcy lawyer can be challenging. Here is what you should look for;

  1. Expertise

Choose a lawyer who specializes in bankruptcy rather than some other area of the law. Make sure that the person you choose has experience and expertise in the specific type of bankruptcy that you plan to file, such as Chapter 7 or Chapter 13. Find out how many cases the lawyer has handled and how complicated they were.  Choosing an experienced Bankruptcy lawyer can make all the difference in helping your case to go smoothly.

  1. Referrals

Ask for referrals from previous clients. Ask detailed questions about the lawyer’s knowledge, skills, pricing structure, and ability to respond to challenges. Always find out whether the client would choose that lawyer again. If a previous client says they would definitely choose the same lawyer, that person may be answering your question of How to Choose the Right Bankruptcy Lawyer.

  1. Fees

Bankruptcy lawyers charge a wide range of fees, that vary substantially depending on the Chapter of Bankruptcy, whether it is a Chapter 7 or Chapter 13, to the difficulty and issues involved in the case. There are many factors that go into how much you are charged, from the firm’s reputation to the complexity of your case. Always make sure that the attorney will give you a written representation agreement which lays out exactly what is being charged.

As a general rule of thumb, be wary of bankruptcy lawyers who charge bargain basement fees, as they might be less experienced or simply interested in shoveling through as many cases as possible. However, sky high fees do not necessarily indicate quality either. Unless there is a compelling reason to do otherwise, choose an attorney who will work with you on the fees and who is affordable for you.

  1. Communication

Before signing on the dotted line, contact the attorney a few times by different methods, such as email and telephone. Does he or she return communication promptly? When interviewing a prospective lawyer, ask detailed questions about your case. A good bankruptcy lawyer should be responsive and forthcoming, providing you with all the information you need in a timely manner. Be wary of a lawyer who summarily tells you what type of bankruptcy to file and how to start the process without any discussion or explanation.

  1. Problem-Solving

Even seemingly simple bankruptcy cases can be complicated by aggressive creditors or unforeseen circumstances. Choose a bankruptcy lawyer who is smart, passionate about the process, and able to adapt quickly to changing factors. You can learn a great deal about a prospective lawyer by speaking with referrals, but be sure to interview the lawyer directly as well.

Good bankruptcy lawyers understand that there are multiple options for any case, and are eager to explain the pros and cons of different solutions. They also think quickly on their feet and are able to assimilate new information that comes to light as you discuss the details of your case. You also want a Bankruptcy Lawyer who tells you not to file Bankruptcy if it is not the best move for you. You want the Lawyer to advise what is best for you in the long term. While Chapter 13 Bankruptcy may seem better for you in the short term, sometimes Chapter 7 Bankruptcy is much better for you in the long term, and vice versa.

  1. Personality

Although expertise and competence are important qualities in a bankruptcy lawyer, you need a lawyer whose personality you like. You and your lawyer will work closely together, and it is important that you “get” each other. Choose someone who makes you feel comfortable, with whom you can reveal the most intimate details of your finances, and whom you feel will represent you well in court.

Does the lawyer make you feel very comfortable?  Does the lawyer put you at ease and alleviate your worries. Personality conflicts will not necessarily sink your bankruptcy case, but they will make the process significantly more trying. Filing for bankruptcy is a big decision, and choosing the right lawyer to represent you is critical. With a bit of legwork, however, you can select a bankruptcy lawyer who fits your needs and personal style and with whom you are comfortable. Following these steps will help you know How to choose the right bankruptcy lawyer for your case. The end result can be that you are free of debt and are on your way to a better financial life without struggling with debt problems.

If you are ready to take the first steps toward financial freedom, call the Law Offices of David M. Offen today at (215) 625-9600 to schedule your free initial consultation. We’re here to help you every step of the way.

The post How to Choose the Right Bankruptcy Lawyer for your Case appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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Bankruptcy is an excellent solution for honest people who are in tough financial situations. It provides a fresh start, allowing you to move forward with a clean slate. For many people, the actual process of filing for bankruptcy, with its complicated rules and red tape, is easier to handle than the flood of emotions surrounding their situation. Here are 6 tips for managing the emotional stress of bankruptcy.

  1. Honor Your Feelings

You might feel surprised and even overwhelmed by the depth of your feelings when you decide to file for bankruptcy. Some people sink into anxiety and worry, while others try their best to put their emotions aside. This is not necessary.

Instead, honor your feelings by allowing them to flow through you. Notice and accept that you are doing the best for yourself and your family. Reading, relaxing and meditation are just a few common ways to calm your mind without repressing your feelings.

  1. Acknowledge Your Situation

For the vast majority of debtors considering bankruptcy, their current financial difficulty is the result of many factors, the majority of which were outside the debtor’s control. Most people also made one or a few financial mistakes that contributed to the situation.

Write a list of all the factors that contributed to your decision to file for bankruptcy.  Make a commitment to yourself not to repeat the same financial mistakes. Consider the factors that were not under your control, and realize that without that chain of events, you would likely not be in the financial position that lead to the filing for bankruptcy. Acknowledge the reality of your situation, and then turn your energy towards a better financial  future.

  1. Learn the Facts

Many people face bankruptcy with a great deal of anxiety and fear because they believe in common myths. You might worry that you will lose your home and car, that your employer will hold your bankruptcy against you, or that everyone you know will find out. Sit down with a trusted bankruptcy attorney and learn the facts that apply to your individual situation. Knowledge is power, and most people are surprised to learn that things are not as dire as they imagined.

  1. Talk to Trusted Loved Ones

While you might not want to announce your bankruptcy to the world, it is important to seek support from those who are closest to you. Bankruptcy is extremely common in today’s world, and you might just find that one or  more of your loved ones have gone through it. You will also come to realize that your worth is not tied to your finances, and that the people who matter are truly on your side.

  1. Talk with a trusted friend or a Therapist

In a way, filing for bankruptcy unnecessarily represents the feeling of a loss in your life. It is important to get past any type of feeling of loss and develop the tools you need for the future. Talking with someone can be a vital ally in helping you make sense of how you are feeling, addressing any unnecessary worry, and moving you on to a healthy emotional state and financially healthier place.

  1. Make a Financial Recovery Plan

It is a myth that bankruptcy will prevent you from ever getting credit in the future. In fact, many people start receiving credit offers within one to two months after their bankruptcy is finalized. It is true that you will begin with low limits, higher interest rates, and possible security deposits, but many people report that they were able to build a healthy financial picture in two years or less.

Cut through the emotionality of the present moment by focusing on the future. In meditation or during the quiet moments of your day, begin to visualize yourself as financially secure with a strong credit profile. Then develop a plan of action to reach that goal.

Create a realistic timeline, consider your budget, and set a series of smaller goals for which you can reward yourself. Developing a new plan will get you excited about the future, make the present seem less significant, and help you learn the financial skills you need for a lifetime of success.

Filing for bankruptcy can be an emotional roller coaster, but it is really not necessary to feel that way.  Millions of honest people have filed for Bankruptcy with the goal of having a better financial future. Give yourself time and patience, speak with trusted loved ones and focus on the future. Over time, your fears and worry will be replaced with hope and excitement.

If you are ready to take the first steps toward financial freedom, call the Law Offices of David M. Offen today at (215) 625-9600 to schedule your free initial consultation. We’re here to help you every step of the way.

The post 6 Tips for Managing the Emotional Stress of Bankruptcy appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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If you are a small business owner coping with mountains of debt, you might wonder whether bankruptcy is the best option. Small business bankruptcy is more complex than personal bankruptcy, and the repercussions can be different. It is important to fully understand the different types of small business bankruptcies and the potential ramifications of each option.

Type of Business Structure

The type of business structure you have can help determine which type of bankruptcy is best for you. If you have a sole proprietorship or general partnership, you are personally liable for your business debts. If you are a limited partner or yours is a corporation or LLC (limited liability company), then your personal assets are not at risk. Sole proprietors can file for Chapter 13 bankruptcy, but partnerships, LLCs, and corporations cannot. Chapter 7 and Chapter 11 are available to all types of business structures.

Future Goals

Do you plan to continue your business operations, or do you want to liquidate the company and protect your personal assets in the process? Would you entertain the idea of selling your business and using the proceeds to pay off your debts? Do you want to start another business in the near future? What you plan to do next will help you decide whether bankruptcy is best and, if so, which type of bankruptcy you should file.

Chapter 7 Bankruptcy

Sole proprietors can file for a personal Chapter 7 and use exemptions to protect business assets. Partnerships, LLCs, and corporations can use Chapter 7 bankruptcy to liquidate the company, but do not qualify for exemptions. Chapter 7 bankruptcy wipes out unsecured debts, and allows the business assets to be sold by the bankruptcy trustee. If you are personally liable for business debts, you are not protected by a business Chapter 7. You must file for personal bankruptcy to erase those debts.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is not available to businesses, but sole proprietors are considered one and the same as their companies. If you are a sole proprietor, you can use Chapter 13 bankruptcy protection to retain your non-exempt assets, renegotiate your secured loans, wipe out both business and personal non-priority debts, and pay off such priority obligations as business and personal taxes. Note that Chapter 13 is a debt restructuring program, and you must develop and execute a repayment plan that lasts 3 to 5 years.

Chapter 11 Bankruptcy

Chapter 11 is available to both individual and business debtors, but is rarely filed by individuals because Chapter 13 is generally a more attractive option. If you want to keep your business running after the bankruptcy, Chapter 11 is the only solution for companies organized as anything other than a sole proprietorship. This is the type of bankruptcy filed by major corporations, and small businesses must follow most of the same rules and procedures. However, if you owe less than $2.5 million dollars, you can file as a “small business debtor,” which fast tracks the bankruptcy and releases you from some of the more onerous provisions.

Still, Chapter 11 bankruptcy is extraordinarily complicated, even for small business debtors. You must develop and have approved by the court a reorganization plan that shows how your business will recover. You must make payments that are determined by a very complex formula, and your company will be subject to strict oversight by a trustee during the repayment period. To file, you must produce your company’s most recent balance sheet, statement of operations, cash flow statement, and federal tax return.

Because of its enormous complexity, Chapter 11 bankruptcy should never be handled on your own. While it is important to seek qualified legal advice regarding any form of small business bankruptcy, Chapter 11 is truly in a league of its own, and the decision to file Chapter 11 is not a small matter.

Whether to file for small business bankruptcy and which type of bankruptcy to file are hugely complicated decisions that should not be undertaken lightly. Depending on the type of business structure you have and your future business goals, your bankruptcy could have far reaching implications. An experienced bankruptcy attorney can help you sort through your options, file all needed documents, and ensure that you do not experience unintended consequences as a result.

If you are ready to take the first steps toward financial freedom, call the Law Offices of David M. Offen today at (215) 625-9600 to schedule your free initial consultation. We’re here to help you every step of the way.

The post Bankruptcy Considerations for Small Businesses appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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As a general rule, the Bankruptcy Code permits the discharge of unemployment overpayments when you file for Bankruptcy. These payments are usually treated as an unsecured debt and are dischargeable. This is the case whether you file for protection under Chapter 7 Bankruptcy or under Chapter 13 Bankruptcy. The Commonwealth of Pennsylvania debt for the unemployment overpayment will be treated the same as all other general unsecured creditors that you list in the Bankruptcy Petition.
If you file for Bankruptcy protection, the automatic stay will stop collection activities by the state to collect for the overpayments that you were paid.

The above is the general rule but there are exceptions. The big exception is fraud. If you commit fraud then Title 11 Section 523 of the U.S. Bankruptcy Code provides that any debt incurred through fraud is not dischargeable.
The following is an example of a dischargeable debt followed by an example of a non-dischargeable debt.

In the first case. You reported all correct information. The Commonwealth of Pennsylvania by mistake paid you much more than you were entitled to receive. This is an example of an overpayment which is not your fault. In such a situation, the entire amount of the debt would be dischargeable.

The following is an example of a non-dischageable debt.
You collect unemployment for one year. For the first four months you were unemployed and not working. You then obtained a new job. However, for the next eight months you reported to the Commonwealth of Pennsylvania that you were not working at all. During this time you worked at your new job full time and received your full salary. You also received full unemployment benefits due to reporting that you had no income. In such a situation, the unemployment overpayment for the eight months when you were working full time would be non-dischargeable. That is because you made a false report about your financial circumstances with the intent to deceive the Commonwealth so that it would continue to pay you benefits. and the Commonwealth of Pennsylvania relied on your reported information in paying the full unemployment benefits.

When filing bankruptcy an unemployment overpayment is not a debt that is listed as exempt from discharge. It is subject to discharge in a Chapter 7 Bankruptcy and a Chapter 13 bankruptcy. Filing for bankruptcy can provide significant relief from the collection efforts of the state. The automatic stay stops collection efforts from the state to get you to pay back the unemployment benefits.

If a creditor believes that fraud occurred and you file for Chapter 7 Bankruptcy, the Commonwealth of Pennsylvania can file a Complaint – which is a lawsuit objecting to the discharge of your debt in order to determine the dischageability of the debt.

If you file for protection under Chapter 13 Bankruptcy, the Commonwealth of Pennsylvania can file a priority or secured claim which your attorney will either have to object to or file documents dealing with the claim. Otherwise you could wind up paying back Pennsylvania’s unemployment claim in full in the Chapter 13 Bankruptcy.

To get answers to your specific unemployment overpayment questions in Bankruptcy, please call the Law Offices of David M. Offen at 215-625-9600.

The post Discharge of Unemployment Overpayment in Bankruptcy in Pennsylvania appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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If person’s drivers license is suspended due to an unpaid judgment please be aware of the following, a Philadelphia Bankruptcy filing gets a drivers license reinstated. This allows a person to drive again.

A person came to us wanting to work again as a Truck Driver. In order to obtain the job, he needed to have a drivers license. Unfortunately he had driven a car with no insurance which wound up getting into an auto accident. The driver of the other car obtained a judgment against our client. The judgment had to be paid and when our client missed the payments, he found himself with a suspended drivers license.

As a result he turned to us to ask what he could do We recommended that he file Bankruptcy. Based on his situation a general rule is that a Philadelphia Bankruptcy filing gets a drivers license reinstated, whether filing under either Chapter 7 or Chapter 13.Our client was no longer was required to pay the judgment.

Within a week after the filing of the Bankruptcy filing under Chapter 7 the suspension of the Drivers license was lifted. Our client was able to pay the reinstatement fee to get back his drivers license.This a perfect example of the Bankruptcy being used for the purpose of allowing a person to get back to a normal life. No repayment of the debt was required. This person had no alternative to filing bankruptcy. He did not have the money to pay the creditor and could not get the job he needed without his drivers license being reinstated. This was the case a struggling individual who made the decision to file and got the results he wanted. The Philadelphia Bankruptcy filing gets a drivers license reinstated.

The Federal Bankruptcy code provides a remedy for dealing with judgments. Please note that this remedy does not apply if the accident was the result of a DUI. The Bankruptcy code provides an exception for injuries which result from one driving under the influence and certain other situations. In addition filing for relief under Bankruptcy can help with traffic tickets in some cases. If your license is suspended please call The Law Offices of David M. Offen at 215-625-9600. We can tell you if Filing Bankruptcy under Chapter 7 or Chapter 13 can help your situation.

The post Philadelphia Bankruptcy filing gets a Drivers License Reinstated appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

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