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Can I Choose Whether to File Chapter 7 or Chapter 13 Bankruptcy?

For most people, bankruptcy is a vague notion – something they’ve heard of but know little about. But if you’re one of the hundreds of thousands of Americans for whom debt has become insurmountable, bankruptcy has become a potential lifeline you’re hurrying to learn more about. One of the very first things you’ll want to understand is the difference between Chapter 7 and Chapter 13 bankruptcies, and whether you’re able to choose the one you prefer.

Chapter 7 and Chapter 13 bankruptcy both exist to relieve debt, but the two have significant differences.

Because Chapter 7 entirely liquidates almost all debt, most people find it more appealing than Chapter 13, which reorganizes debt under more forgiving terms but still leaves debtors having to pay back what they owe. But not everybody can qualify for Chapter 7, and those who do qualify run the risk of having to liquidate many of their assets.

The first step to be taken when you are considering filing for bankruptcy is determining whether you are eligible for either type. For Chapter 13 your unsecured debt must not exceed $419,275 and secured debt cannot exceed $1,257,850.  You must have regular income and be current in your tax filings and can’t have filed a Chapter 13 bankruptcy in the last two years or a Chapter 7 bankruptcy in the past four years. By comparison, to qualify for Chapter 7 you can’t have had a previous Chapter 7 discharge in the past eight years or Chapter 13 in the past six and, most importantly, must pass a means test. Even if you prefer to file Chapter 7, if a formula that compares your income, expenses, and family size to others in your area shows that you’re able to pay off some of your debts, you’re not likely to qualify and will be forced into Chapter 13.

Choosing between Chapter 7 and Chapter 13 bankruptcies is a big decision. Where Chapter 7 is faster and erases all eligible debt, it also does not eliminate student loans and taxes, and leaves assets such as your home or vehicle vulnerable. Determining which form of bankruptcy is best for you, as well as which chapter you qualify for, is the first step to putting yourself back on the path to financial health. An experienced bankruptcy attorney will tell you the advantages and disadvantages of each. Contact us today for guidance.

What Should I do if I’m Having Second Thoughts About My Divorce?

Divorce is a painful, challenging, confusing experience, and it is completely normal to find yourself questioning your decision. Though nobody can tell you what to do with your life, there are a few things for you to keep in mind. One is that having doubts is common, especially if you are tired and economically and/or emotionally depleted. You may be getting pressure from your spouse, from their family or yours, or from friends who are encouraging you to give the marriage another chance, especially if you have children or have been together for many years.

If you are asking yourself whether there’s still a chance of fixing your relationship or whether the situation is hopeless, it’s a good idea to take yourself back to the moment when you made the decision to move forward with ending your marriage. Was it a moment of anger, or following a long period of consideration? Were you responding to a single argument or fight, or have the two of you been unhappy with each other for a long time? Was there infidelity or violence involved?

Remembering and understanding how you got to your decision may bring you back from what is giving you pause now. There are several different factors that are generally behind people having second thoughts. These include:

  • Fear – When you make the decision to divorce, you are putting yourself at risk. Risk of the outcomes of the divorce itself in terms of your finances, your living situation, your child custody outcomes and whether you will end up in another relationship in the future or be single.
  • Self Esteem – One of the unfortunate outcomes of being in a bad marriage is low self-esteem, and this can cause you to doubt all of your decisions, including those that may end up putting you in a better spot.
  • Love – The need to end a marriage does not necessarily mean that your love for the other person is gone.
  • Hope – Even when things have gotten terrible, it is an entirely normal human response to have hopes that things can improve.

Only you can judge whether reconciliation makes sense, but an experienced divorce attorney may be able to provide you with answers that will allay some of your fears and concerns. The more you know and understand the process, the more clarity you may feel. Contact us today if you would like to speak with one of our divorce attorneys.

How to Know if Bankruptcy is Your Best Option

Nobody likes opening their mail (or inbox) and seeing a ton of bills. But for some people, bills evoke more than dislike: they cause actual pit-of-the-stomach, heart-thumping dread. The reason is simple — they are unable to pay. Regardless of whether the reason is financial carelessness or having been through some kind of economic disaster, if you’re in a situation where you see no end to your financial trouble then you are probably considering filing for bankruptcy. The question is, how can you tell whether it’s your best option?

The first thing you need to know is that there are plenty of highly qualified people who can help you come to the conclusion and action that’s right for you, including the skilled attorneys at our law firm. Though bankruptcy is an excellent vehicle for some people with debt, it is not the only way to find relief. Here’s what you need to know.

  • Not every debt is dischargeable. Though credit card debt and medical debt can be erased in a bankruptcy, you will still be liable for alimony, child support, and student loans. Further, if you file for a Chapter 7 bankruptcy and some of your loans have to do with secured debts such as your home, keep in mind that you are probably going to have to sell off some of your assets in order to hold onto them – or face losing them.
  • You can’t cordon off some of your assets as though they don’t count. If you have a pension or life insurance plan, a 401K or other types of savings that you have been hesitant about cashing out, a bankruptcy court is not going to allow you to continue doing so. You’re going to have to end up making some sacrifices.
  • There are different types of bankruptcy. While Chapter 7 means that most of your debts will be discharged but you have to get rid of assets, Chapter 13 gives you more time to pay off your debts and might lower them or the interest rate that you are paying. Many times a debtor will not qualify for Chapter 7 because their income is too high.

There are other options, outside of bankruptcy, that might be a better fit for you. If your biggest problem with your debt is the calls you’re getting from creditors, you can put a stop to that under the terms of the Fair Debt Collection Practices Act, which has established limits on the times and ways that debt collectors can communicate with you, on what they can say and even where they can call you. You can also undergo credit counseling to help you figure out how to deal with your debt, or you might consider debt consolidation or settlement.

For assistance in finding the best way to deal with your situation, contact us today. We have the experience and knowledge you need.

How Long Does a Chapter 13 Bankruptcy Take?

A Chapter 13 bankruptcy lets you reorganize secured debts such as car or house payments and some unsecured debts. It lets you repay some creditors at a lower rate and some for a longer period of time or a lower interest rate. The plans usually last from three to five years, but there are a lot of factors that can change the length of time.

When a Chapter 13 bankruptcy payment plan is created, you stop paying your creditors. Instead, sending monthly payments to the trustee who is responsible for administering your bankruptcy. The length of the plan will be determined by several different things, with one of the most important being the average monthly income in your state. Your income will be compared to that number to determine whether a three-year plan or a five-year plan is more appropriate for you. If you earn more than the state median income you will probably have to file for a five-year plan, even if you can go shorter.  The longer your plan, the lower your monthly payment will be,

When you file for Chapter 13, you will have to attend a First Meeting of Creditors where you attest to all of your documents being right and a confirmation hearing. These are designed to present your plan and see if all of those who you owe money to agree to what you are proposing. If none of your creditors object, the process of setting up and getting your plan confirmed usually takes three or four months, and then the actual three- or five-year bankruptcy plan begins, though most people start making payments before the confirmation hearing is held.  If you want to and are able to, you can usually pay off your bankruptcy plan early. If, however, you experience a change in circumstances that makes your sticking to the payment plan a challenge, you can request a modification by filing for a remedy. Typical reasons that are considered valid include losing your job, having another child, or getting divorced. You can also file for a modification if your circumstances improve through a raise or a new job that allows you to pay faster. Once you’ve paid off your repayment plan, all of your debts are discharged.

Filing for Chapter 13 bankruptcy is a good way to regroup and get a fresh start when your debts have gotten out of control. For more information on whether it is right for you, contact our experienced attorneys today.






Is Joint Physical Custody Best for Children after a Divorce?

When a couple makes the decision to end their marriage, it may be the end to long-standing problems but the beginning of all new ones. Though divorce is generally the low point of a relationship, it is also the baseline from which the couple will need to make some of the most consequential decisions they’ve ever made together, with decisions about custody being the most challenging of all. In most cases, both parents want what is best for their children, but each will have their own interpretation of what that actually is. One of the first questions they will have to determine is whether the children will live with just one parent or split their time between two homes. The latter is known as joint physical custody, and most experts believe that it is the best possible answer for all, but especially for the children.

The advantage of a successful joint physical custody arrangement is that it gives kids the opportunity to spend time with both of their parents in their own separate worlds. The parents are each able to have their own physical space and home and provide both a home for their children and to build memories together.

Unfortunately, joint physical custody does have its downsides. Some parents will fight for more custody than what they can provide well in order to either lower their child support payments or simply to punish their ex-spouse. Even in the best of circumstances, it represents an unstable situation that requires a significant amount of organization, communication and coordination between the parents, as well as involved outsiders including teachers, grandparents and others. As a result, despite the best efforts of many co-parents, joint physical custody often does not work.

Joint physical custody requires figuring out how to split their children’s time between two separate households. In most cases, joint physical custody is accompanied by joint legal custody, in which both parents have a say in important decisions including education and medical care. More parents share legal custody than physical custody, although there are situations where even that cannot be agreed to or is not in the children’s best interest.

The most important reason to try to make joint physical custody work is that it allows children to establish a relationship with each of their parents. In most cases, this is in everybody’s best interest. If you’d like help negotiating the terms of a divorce that works for everybody, contact us today to set up a time for us to meet.


Making Holidays Easier on Kids After a Divorce

To say that divorce is emotionally challenging — and often maddening — is an understatement, and that’s especially true when the couple has children. To say that the holidays can exacerbate an already vexing situation is obvious.

The good news is that it doesn’t have to be that way. As a parent, one of the greatest gifts that you can give to your kids for the holidays is the ability to enjoy them in a pure and stress-free way, and there are several steps that you can take to make sure that happens.  Here are some simple tips to help you keep your kids’ spirits high, despite any difficulties you may be having with your ex.

  • First and most importantly, put the kids’ needs ahead of your own. The whole world (advertising, movies, books) make the holidays happy, so don’t let your anger or need to ‘win’ or ‘get back at’ your ex get in the way of that happening for them. Stop and breathe before you let your own motivations get in the way of their holiday enjoyment. You can let go of things for a week or two.
  • You may be alone for the holiday, as many custody arrangements are set up to provide access to the kids every-other-year. Don’t make your kids feel sad about you being alone. Instead, make sure they know you want them to have a great time, no matter who they are with.
  • Don’t try to ‘win’ the holidays by giving the biggest, best or most gifts. The holidays are about a lot more than presents.
  • Make sure that you communicate with your kids’ other parent to make sure that timing for when kids are where and times for drop off or pick up are worked out You don’t need to discuss any other issues during the holidays. Leave it for another time.
  • Consider celebrating together if you can do so without stress. At the very least, it’s a great idea to take your child shopping for a gift for their other parent or to help them make a homemade gift for them. Doing so sends a powerful message that your child will appreciate.
  • Instead of grieving what you’ve lost, start building new traditions with your children that you can carry forward into the future.

Having the help of a compassionate, experienced attorney can help minimize the stress of divorce. Contact us today to learn more or set up an appointment.



Which Debts are Discharged by a Bankruptcy and Which Are Not?

People seeking relief from debt through bankruptcy do so with the understanding that in doing so their credit card bills will be wiped away, as well as most of their other unsecured debt. But those who don’t spend time doing the research into the ins and outs of the process risk having unrealistic expectations about how they will be impacted, and particularly on what debts they will still have to pay. Some debts are notoriously difficult to discharge through bankruptcy, but others are specifically not eligible for discharge. It is important that anybody considering a bankruptcy filing familiarize themselves with these exceptions so that they are not surprised at the outcome they encounter.

The first thing that debtors need to understand is that even among the debts that are normally dischargeable, creditors may attempt to stop the debtor from avoiding payment. They can file motions to the court to excuse them from the stay that prevents them from pursuing collection actions. Further, student loan debts and income tax debts are generally not dischargeable unless the debtor can provide a significant justification for why they should be relieved of their debt or permitted to renegotiate the amount that they owe.

Beyond these debts that are a challenge to discharge, there are other 21 categories of debts that simply cannot be discharged no matter how desperate the debtor’s financial situation. These debts include:

  • Alimony
  • Child Support
  • Debts obtained through fraud, embezzlement, or larceny
  • Debts where the borrower was acting in a fiduciary capacity
  • Debts for willful injury or wrongful death
  • Unpaid withholding tax, Social Security tax, income tax or other back taxes or tax penalties
  • Mortgage debt
  • Condominium or cooperation association fees
  • Debts not discharged in a previous bankruptcy filing
  • Debt from borrowing against some retirement plans
  • Court fees

It is also important to note that you cannot discharge credit card debt over a certain threshold incurred within 90 days of filing for bankruptcy. There is a long history of people foolishly running up big credit card bills in the days and weeks before filing for bankruptcy under the misapprehension that they would end up getting the things that they purchased for “free.”

Filing for bankruptcy is a big decision and one that should not be made without the proper guidance. To meet with one of our bankruptcy attorneys to discuss your situation, contact our office.


How to Make a Divorce Easier on Your Children

Depending upon your situation, your divorce can represent a significant sense of loss and grief or it can signal the start of something better and a chance at happiness. No matter its impact on you and your spouse, it’s essential that you use special care if you have children who will be affected. Depending upon their ages and your situation, your children may not understand what is happening. For older children who have watched the marriage deteriorate, your divorce may come as a relief. But kids who have been unaware of things breaking down may react very poorly to the idea of your split. Most kids survive divorce just fine and are fully adjusted within two years of the marriage’s breakup, but others have a harder time. This usually happens when the parents involve them in antagonism or blame or leave them uninformed rather than carefully helping them understand what’s happening. Here are some tips to help you make your divorce easier on your children.

  • The higher the degree of conflict between you and your ex, the more of a challenge your kids will have. If you’re going to fight, don’t do it in front of the children and don’t make them responsible for your communication. You’re the adults, so act like it.
  • Work together to come up with a way to tell your kids about the divorce. Sit them down when both of you are there so that the kids see that the message is coming from both of you and that you’re both still their parents, even if you aren’t going to be married to each other anymore.
  • Make sure that your kids know that the divorce is not their fault. You don’t need to go into details, just let them know that it’s between the two of you and that you both love them and will be there for them.
  • Give them time to process. Start doing things with them separately and let them know about a move or one of you moving out well beforehand. If they are going to have a new room in a new location, let them help decorate it so that they feel some ownership and a sense of personal space.
  • If the kids are having trouble — and even if they seem fine — get them to a family therapist so that they can speak to a neutral third party about their fears and feelings.

Your divorce is not a contest or your children’s affection. They need both of you and will do better if they stay in close contact with each of you, so unless there is some danger in letting your child be with your spouse, don’t try to keep your kids from your ex.

If you need assistance with any part of your divorce, we can help. Contact our compassionate attorneys today to set up an appointment.

Is Student Loan Debt Wiped Out by Bankruptcy?

Overwhelming debt has many causes and even more contributing factors, and one of the most common contributing factors in bankruptcies being filed today is the burden of student loan debt. The average amount of student loan debt in America today is $38,390. This is a staggering amount for any one individual to owe, but if you add to that another factor such as a medical emergency or credit card debt, it is not hard to see how things can get out of control.

If you are considering filing for bankruptcy and student loan debt represents a significant amount of the monies that you owe, you may be hoping that the fresh start that bankruptcy offers will include making your student loan debt disappear. Unfortunately, that only happens where the individual is able to prove that paying off the debt would cause an undue hardship.

“Undue hardship” is a term of art used in law. In order to pass the test that determines whether you are actually suffering undue hardship, you will likely have to prove all three factors of a test known as the Brunner Test.

To pass the Brunner Test, you need to be able to show the following three things:

  • That you are living in a state of poverty, and if forced to pay back the debt you would be unable to maintain a minimal standard of living for yourself and your dependents.
  • That you do not anticipate a change in your financial situation during the majority of the required repayment period.
  • That you have made a good-faith effort to repay your student loan debt but have been unable to do so.

Upon a review of your circumstances based on the Brunner Test, there is a chance that the bankruptcy court may agree to discharge either all or part of your student loan debt. There are also other tests, including the Totality of the Circumstances Test which looks at all of the factors involved in your bankruptcy to determine whether you should have your student loan debt discharged, and the special test for Health Education Assistance Loans for loans that were due more than 7 years earlier and which would impose an “unconscionable” burden on the debtor’s life.

Though getting a student loan debt discharged in bankruptcy is difficult, it is not impossible, especially if you are working with an experienced bankruptcy attorney. For information on how we can help you get a fresh start, contact us today to set up an appointment to discuss your situation.

How to Get a Divorce in Pennsylvania

If only life events came with the same type of instruction manuals that our appliances do. If they did then we’d have easy access to answers about raising children, purchasing a home and navigating divorce. Every divorce experience is different and is dependent upon the personalities of the partners, the particular issues that need to be resolved, and the state in which they are seeking a dissolution of their marriage. In the state of Pennsylvania, divorce requires at least one of the spouses to have lived in the state for six months.  Beyond that, the state’s divorce process can be exceptionally easy or exceptionally challenging.

The simplest circumstances for getting a divorce in Pennsylvania are where both spouses want to end the marriage. In that case, all that is needed is for one partner to file a divorce complaint using two forms: the Notice to Defend and Claim Rights and the Verification form, both of which can be downloaded from the state’s website. These papers get served to the other spouse within 30 days and then the couple must wait 90 days from the date of service to fill out and file consent forms. After a series of other forms are filled out, the court ends up receiving a Divorce Decree and a judge finalizes the dissolution of the marriage.

Things are notably more complicated when one spouse does not consent to the divorce. In this situation, the state requires a period of separation lasting one year from the date that the divorce complaint was filed, after which the appropriate forms can be filed to notify the court that the required separation time has been fulfilled and the other spouse to be served with notice of the intent to divorce. Once this has done the other spouse can object to the divorce or file claims for equitable distribution, child custody, child support, and spousal support. If the other spouse does nothing, a judge can enter a divorce decree 20 days after service has been made.

Divorce is a complex and often torturous process, and one of the best ways to ease the stress and anxiety is to put your situation in the hands of an experienced and compassionate divorce attorney. For assistance in navigating the Pennsylvania requirements and getting through this journey as painlessly as possible, contact our divorce lawyers today to set up an appointment.

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