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Bankruptcy FAQ - Litvak Legal Group

FREQUENTLY ASKED QUESTIONS

If you’re in a stressful financial situation and considering bankruptcy, you probably have a lot of questions and uncertainties. Litvak Legal Group has outlined below the questions our bankruptcy attorney is asked most frequently. If you do not see your specific concerns on our list of bankruptcy FAQ, please call one of our office locations today: Bensalem PA (215-515-7113), Philadelphia (215-515-7113) or Princeton NJ (732-624-6283). We’re happy to speak with you over the phone about your questions or make an appointment to speak in person.

What is Bankruptcy?

There are 2 types of bankruptcy: Chapter 7 or Chapter 13. Both are a legal process to help individuals who cannot pay their debts get a fresh start financially. Chapter 7 is known as liquidation proceedings, where all non-exempt assets are sold. In practice, the vast majority of Chapter 7 debtors get to retain their assets. Chapter 13 is known as a wage-earner’s bankruptcy and debtors are able to catch up on their delinquent mortgages, tax and other obligations. Both types of bankruptcy are governed by federal laws. Once the petition is filed, your creditors are ordered to cease all communication and stop collections on your debt under the provisions of Automatic Stay.

Will it clear all of my debts?

A properly filed bankruptcy will clear (discharge) most unsecured debts including credit cards, personal loans, medical bills and department store cards. Furthermore, there are other categories of debts deemed “non-dischargeable” (or rarely dischargeable in limited circumstances only) including tax debts, child support, alimony and student loans. If your debt involves any of these “non-dischargeable” debts, our bankruptcy attorney will work to negotiate a settlement and affordable repayment plan or find a way to qualify for a possible bankruptcy relief.

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy will wipe away the most amount of unsecured debt including credit cards, department store cards, medical bills, unsecured personal loans and some tax debts (restrictions apply). Generous exemptions are available to protect most assets and the majority of Chapter 7 debtors keep assets including home and/or car.

What is Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy is a reorganization of your debts with a play to pay some debts over a 3 to 5 year period. This is a better option for those with a steady income and who need to keep valuable assets including houses, cars, property or want to catch up on their mortgage, taxes or even domestic support obligations

I don’t want to lose my assets, what are my options?

You need an experienced bankruptcy lawyer to carefully plan and execute your bankruptcy filing in order to maximize your exemptions. Using bankruptcy exemptions, both Chapter 7 and Chapter 13 Bankruptcy, allows you to keep valuable assets. Litvak Legal Group bankruptcy lawyer will discuss the best bankruptcy option depending on your types of debt and income.

My business is in danger of closing, what are my options?

Many bankruptcy and non-bankruptcy options are available to troubled business owners. Please contact Litvak Legal Group to schedule a case evaluation of your particular situation. Over the years, we have extensive experience helping small and medium business owners deal with financial situations.

Do I have to list all creditors?

Yes. You must list all of your creditors.

Will bankruptcy remove liens against my property?

Depending on the type of bankruptcy, debtors may be able to stop liens and mortgages. In most Chapter 7 bankruptcies, liens will survive the discharge and you have to continue paying them. Every case is different and needs a detailed and diligent analysis.

Can bankruptcy help me with tax debt?

Litvak Legal Group is an experienced tax and bankruptcy attorney. Our services can help with a variety of tax debts including income taxes, pay roll taxes and sales taxes.

Are student loan debts eligible in bankruptcy?

It is very hard to discharge student loans in bankruptcy. In most cases, other better and easier alternatives exist to deal with student loans. However, in very limited circumstances, debtors are able to discharge student loans in Bankruptcy under the so called Brunner test. We are experienced with student loans in bankruptcy and can assist debtors facing challenging times.

Will bankruptcy stop the harassing creditor calls?

Yes. After your bankruptcy case gas been filed, creditors and collection agencies are mandated to cease all collection activity including phone calls, emails and mail correspondence.

Do I have to qualify?

Bankruptcy laws are very complex and require an in-depth review of the situation by an experienced and diligent bankruptcy lawyer. Generally, debtors must be under a certain income level to qualify for Chapter 7 or a 3 year Chapter 13 Bankruptcy. Other bankruptcy planning considerations must be addressed, such as property transfers, tax refunds, inheritance and trusts and other aspects of the debtor’s financial situation.

How will bankruptcy affect my credit?

If you’re already falling behind on your credit payments, than your credit score is probably already on the low end. A bankruptcy filing will stay on your credit report for 10 years, however, in the long run and with proper approach you will be able to rebuild your credit and relatively quickly rebuild your credit and score. In more circumstances, people are able to get loans to purchase real estate property, cars and obtain other credit in a few years after they filed for bankruptcy. We can help you with post-bankruptcy credit rebuilding strategies.

How long will the process take?

A typical Chapter 7 case should be concluded in 3-6 months. Chapter 13 bankruptcy cannot be over 5 years.

What documents do you need to get started?

State ID and Social Security Card
Past 4 years of tax returns
6 months’ checking/savings account statements
Retirement account statements/401k, etc
Child Support/ Alimony Orders
Garnishment Documents
Repossession Documents
Foreclosure Documents
Any recent personal Injury or Worker’s Compensation Documents
HUD and Settlement documents regarding recently sold real estate
Medical Bills and Collection notices
Real property information
Auto loans’ balances
Mortgage balance
Law suits information
Divorce decrees or other papers
Expenses’ summary
6 months’ pay stubs
Other documents you feel relevant and important.

Who will know if I file for bankruptcy?

Bankruptcy is public record, which means anyone can access court records online or call the bankruptcy court. Lenders and employers can also learn about your bankruptcy if they review your credit history. Realistically, no one will know about your bankruptcy unless they are specifically researching your credit profile.

How much does it cost to file bankruptcy?

Litvak Legal Group is very flexible with our payments and payment plan options. We adjust according to our clients’ needs and budget. In a stressful financial situation, we’re here to help get you financial freedom, not add to your stress.

Why is Litvak Legal Group the best choice for me?

Besides our extensive knowledge in federal bankruptcy and tax laws, Litvak Legal Group also offers years of experience practicing bankruptcy and tax law in New Jersey and Pennsylvania. We fight for our clients to achieve the financial freedom you deserve and envy.

I have a paid off vehicle that is worth approximately $15,000. I have no other major assets, other than some basic furniture and clothing. If I file for Chapter 7 Bankruptcy, can I keep my vehicle?

The vehicle can be full exempted under the above facts. First, 11 USC 522(d)(2) allow exempting one vehicle up to $4,000. However, since the above client lacks any real estate, we can exempt an additional $13,900 of so called Wild Card Exemption (11 USC 522(d)(5)) on top of the above mentioned motor vehicle exemption and therefore, you will keep the vehicle in Bankruptcy.

I am looking for file a Chapter 7 bankruptcy. Sometime about a year ago, I was involved in an automobile accident. As the result of the accident, I received a personal injury settlement. Will I lose my settlement if I file for Bankruptcy protection?

USC 11 522 (d)(11)(D) allows debtors to exempt up to $25,150 in personal injury settlement proceeds. Additionally, debtors may apply an unused portion of one’s Wild Card Exemption (11 USC 522(d)(5)) up to #13,900. In total, you can exempt up to $39,000 of personal injury proceeds.

I had a 401k account with approximately $300,000 in the account. I have recently lost employment and withdrawn approximately $40,000 for living expenses and deposited it into my checking account. If I file a bankruptcy case, can I save my 401k and $40,000 in my checking account?

Your 401k account can be exempted under 11 U.S.C. § 522(d)(12), as a Retirement account is exempt from taxation under Internal Revenue Code. This exemption has no limit and therefore, your 401k account should be fully protected in the bankruptcy. However, once you withdrawn funds from your 401k account, the withdrawn funds will no longer qualify for the above 522(d)(12) exemptions. However, the Wildcard exemption can still be used to shield some of the withdrawn funds.

I fell behind on my mortgage and now owe them several thousand dollars in back payments. My house in on next week’s sheriff’s list of properties for sale. Can we save my house?

Yes, we can try. Your case needs an extensive review before we can give you a definite answer. However, if your income and other facts check out, we can file an Emergency Chapter 13 case and stop the sheriff’s sale. We can also propose a Chapter 13 plan and catch you up on your mortgage payments.

I owe my ex-wife some back child support. Can I discharge my domestic support obligation in Chapter 7?

Unfortunately, child support delinquency and other domestic support obligation debts cannot be discharged in Chapter 7 bankruptcy. I may need to reconsider your stratagem and consider a Chapter 13 bankruptcy. You will not be able to discharge any of your domestic support obligations and debts. However, you may propose to pay off back child support within the applicable Chapter 13 plan.

How long is the initial consultation and what is the cost?

Initial consultation can last up to an hour. Initial consultation is FREE for all clients considering Personal Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.

How much do you charge for basic Chapter 7 Bankruptcy?

Again, every case is different. However, a “plain-vanilla” Chapter 7 Bankruptcy can start at $1,000, plus court filing and credit counseling fees. However, our basic Chapter 7 representation includes many services others consider an add-on. We take pride in our cases and representations and will work tirelessly to out-work our opponents and over-deliver on your reasonable expectations.

My work hours are crazy: I am at work from 7am to 6pm. Can we meet sometime outside of my work hours?

We offer very flexible scheduling options for your convenience. Please let our office know your availability and we will make sure that we meet. In addition to in-person consultations, we can set up a remote tele-conferencing consultation. We will still review your papers and make recommendations. We are here to help with convenient locations and hours, we want to help you with all of your bankruptcy and tax legal needs.

My paycheck is being garnished by creditors and I am not sure I can afford to pay your fee upfront. Do you offer payment plans?

Yes, we offer flexible payment plans that will work for your needs and budget. However, you should be aware that once you file for bankruptcy, your garnishment will stop (unless it is a domestic support garnishment) and you attain an additional financial flexibility. May people are able to reshuffle their finances in the anticipation of the forthcoming garnishment stop and therefore, benefit tremendously from the filing of the bankruptcy case.

I cannot afford to keep my car and make car payments anymore. Can I get rid of my car in the bankruptcy?

The simple answer is “Yes,” you can get rid of unwanted vehicles and the associated car payments in the bankruptcy, if you qualify for one. Please contact us to discuss your particular circumstances and we will be able to guide and counsel you for the desired result.

****Nothing in this Question and Answer should be construed as legal advice. Every case is unique and different and warrants a close analysis. Please contact us to review your specific circumstances.****

Hire a Bankruptcy Attorney in Bucks County PA

Litvak Legal Group has three office locations in Bensalem, Philadelphia and Princeton, NJ. We offer bankruptcy, as well as tax legal services to clients in Bucks County, Philadelphia, Northeast Philadelphia and Central NJ. Call one of our office locations today 215-545-0008 (PA) or 732-624-6283 (NJ) to schedule a no obligation, confidential initial consultation with our bankruptcy lawyer. We’re happy to answer all of your questions and see how we can help you.

LEARN MORE ABOUT WHAT WE CAN DO FOR YOU

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