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!

Medical Bills and Bankruptcy

Medical bills are often an important factor in seeking bankruptcy relief. The good news is that they are mostly dischargeable, no matter how large. Given the exorbitant cost of medical care, these bills often grow huge. Here are some things to keep in mind when you are considering filing a bankruptcy to deal with medical bills.

• Medical bills are normally considered "unsecured" debt. That means they are not secured by your personal property (unlike a car loan or a mortgage), and therefore they can be discharged (or eliminated) like other unsecured debt such as credit cards. In a Chapter 7 bankruptcy, medical bills are completely eliminated. In a Chapter 13 bankruptcy, you may have to repay some or all of the debt, but it will be over a 3-to-5 year plan, and without interest. In either case, bankruptcy will probably be your best option for dealing with the burden.
• Make sure you gather up all of your medical bills for review by your attorney. Many medical providers do not report the bills to credit agencies, so they oftentimes do not show up on credit reports. Find your medical bills and provide a copy to your attorney. If you cannot find the statements, call your health care provider and ask for one. This is important, because just like other unsecured debts, medical bills are NOT discharged if they are not included in your bankruptcy petition.
• Let your attorney know if your medical condition is ongoing, or resolved. While medical bills are dischargeable in bankruptcy, you may run the risk that your health care provider in non-emergency situations may stop providing service if they are included in your bankruptcy petition. Timing is important, a good bankruptcy attorney will discuss your options.

Many of my clients are not even aware of some older medical bills. It is best to round up everything when you file a bankruptcy, there is no reason to pay a bill later that can be included and discharged now.

As a Pittsburgh bankruptcy attorney, I would be happy to review your medical bills and help you determine if bankruptcy is an option for you. Contact us for a free consultation. 

The Importance of Pay Stubs in Bankruptcy

When you hire a bankruptcy attorney (I would humbly recommend myself for your consideration) he or she will certainly ask to review your pay stubs, and will continue to do so throughout your case.

Why the obsession with pay stubs?

Exact income information is very important in bankruptcy for a number of reasons. First, pay stubs are used to complete your bankruptcy means test calculation. This is a 6 month look-back (from the month of filing) at all sources of income. The means test will often determine if you will be a Chapter 7 bankruptcy or a Chapter 13 bankruptcy repayment plan (higher income debtors are required to file a Chapter 13). These numbers cannot be estimated, hence the request for pay stubs.

Second, two months of pay stubs are required for a required filing known as "employee income records" or "pay advices". These allow the trustee assigned to your bankruptcy to review your recent income and verify it is consistent with your bankruptcy petition. 

Finally, pay stubs help your attorney to accurately report income in Schedule I of your bankruptcy petition. This is reviewed by the trustee along with the monthly expenses you report in Schedule J.

If you are in a Chapter 13 bankruptcy, it is not required that you keep and submit all pay stubs throughout the duration of the plan. However, it cannot hurt to keep them in case your attorney needs to file an amended plan. Keep your pay stubs in a Chapter 13 bankruptcy at least until you have attended the Meeting of Creditors.

If you are scheduled to consult with an attorney, make sure you gather up all pay stubs for you and your spouse, at least going back several pay periods. This will make it more likely the first consultation will provide useful advice and information. If you do not keep your pay stubs, consult your payroll or human resources department. If you are self-employed, you will need to bring an accurate accounting of your recent business income and expenses.

Pay stubs provide important proof of your income that is need to file and verify a bankruptcy petition. Make sure your bankruptcy attorney is provided with the updated pay stubs needed for your case.

The Timeline on a Chapter 7 Bankruptcy

My Pittsburgh bankruptcy clients are often very interested in knowing the normal timeline in a Chapter 7 bankruptcy, and understandably so. The process often determines when they can go on with life as normal.

The timeline begins when the bankruptcy is filed. However, the bankruptcy cannot be filed until several important steps are completed.

First, the petition must be completed and electronically filed. As your attorney, I will need to list all of your assets and liabilities, complete all of the schedules and the means test, submit your income and expenses, and disclose other bankruptcy relevant material. I will also need the information required by the court and the trustees, including paystubs, tax returns, proof of retirement and insurance accounts, and all income and asset information about a debtor-owned business.

Once all of this information is provided, I will also need time to organize it and include it in your bankruptcy petition. The faster you provide it, the faster the timeline starts.

Second, the debtor will need to complete an approved credit counseling course. This can be ordered at my office, and completed over the phone or the internet. It normally takes between 1 to 2 hours to complete. The bankruptcy petition cannot be filed until 24 hours after the course is completed.

Third, I will need to be paid in full before I can file. I will be happy to set up a payment plan, and very often do so for clients. However, if I am not paid in full, my legal fees could be discharged in the bankruptcy (not a business model that works very well to keep me in business!). But, payment plans often work out fine for clients. I time the last payment to coincide with completing the bankruptcy petition, so I am able to file as soon as possible.

Once the bankruptcy is actually filed, you will receive a case number, and roughly 6-to-8 weeks later, you will be notified by the court of a Meeting of Creditors date (the details of which are discussed elsewhere on this blog in greater detail). This will be the only official appearance you will be required to make. This appearance is mandatory, but it is not something that should cause stress or consternation. 

You will also be required to complete a second course online or over the phone. This is known as a financial management course. Once again, it is easy to do, and it takes 1 to 2 hours. You have until 60 days after the first scheduled meeting of creditors to complete the course, and it can be completed any time after your case is filed. (NOTE: if you don't complete it on time, your case will be dismissed... so get it done!)

After the meeting of creditors is completed, your case will remain open for 60 days, giving your creditors or the United States Trustee the opportunity to object to the discharge. This occurs very rarely. However, during this time, your Chapter 7 bankruptcy technically remains open. You should not use any credit during this time, take out any loans, or transfer any property. Your attorney will advise you in great detail as to what you should and shouldn't do during this time.

When the 60 day period ends, your Chapter 7 bankruptcy will officially be discharged. The bankruptcy Court will mail you a notice of discharge, which you should keep for your records. At this point, you can take any financial action that you like. The Chapter 7 bankruptcy timeline comes to a close.

In summary, once your Chapter 7 bankruptcy is prepared and filed it will normally be about 3 1/2 months before your case is officially discharged, but as little as 6 weeks until everything you are required to do is completed. Contact us today to set up a free consultation and see if you qualify for a Chapter 7 bankruptcy.

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.