A regular bankruptcy case filed by an individual, or husband and wife, is under Chapter 7 of the Bankruptcy Code. Most debts that you have at the time you file are “discharged” or forgiven. You keep “exempt” assets/property, which for most means you do not lose any assets/property that you own when you file.
A Chapter 13 is a personal reorganization, which can include a small business, filed when circumstances are such that a Chapter 7 would not work for you.
A Chapter 11 is a business reorganization for medium to large businesses.
First Reason. Most Chapter 7 cases filed (about 95%) are classified as “no asset” cases, which does not mean the people filing have nothing, but that their assets (real estate, contents of their home, bank accounts, etc.) are worth less than the limits imposed by law (it is considered “exempt property”). But if you own assets and their value is more than what the law lets you keep, then you might file a Chapter 13 in order to keep the assets you might lose in a Chapter 7. (If you don’t care about those assets, you file a Chapter 7.)
Second reason. If you are behind on your mortgage, and need time to catch up, and want to keep your house, then you might file a Chapter 13.
Third reason. If your household income is “too high”, as defined by the bankruptcy law, you might be forced to file a Chapter 13, and not allowed to file a Chapter 7.
In a Chapter 7 case four to six months is the average time for the case to take.
In a Chapter 13 case, most plans are either for three years or five years.
In a Chapter 7 case almost all of your debt is discharged-eliminated. The exceptions, and debts which you will continue to have to pay, are alimony and child support, nearly all student loans, and most taxes (income taxes more than three years old, for which timely tax returns were filed, can be discharged/forgiven). But bankruptcy does not eliminate a lien or mortgage that you agreed to. For example, when you file bankruptcy your car loan is forgiven-you don’t have to pay it-but the lien on the certificate of tile to the car loan company is not eliminated. Unless the payments are made, the loan company can take the car, but they cannot make you pay anything. So if it is a car you want to keep, you continue to make your payments. If it is a car you don’t care about, you let them take it, and stop making the payments.
Filing a bankruptcy petition generally stops most lawsuits that are pending, and stops most new ones from being filed. (It does not stop criminal cases or fines.)
In a Chapter 13 filing a bankruptcy petition also stops most lawsuits, including any mortgage foreclosure action or efforts by a finance company to take your vehicle. It may give you up to five years to catch up on past due payments on your house or vehicle in a plan your propose. There are legal requirements for a Chapter 13 Plan which we will discuss with you when you come in for your free consultation.
In our office we give you the bottom line price of attorney fees and costs. The Court filing fee is approximately $300, and some miscellaneous fees can be as much as an additional $100. But the price we quote you, includes attorney fees and all costs. The only exceptions are rare cases, which are specified in our written fee agreement, a copy of which we give to you at the free initial consultation.
In most cases no, you will not lose your home. The answer depends on how much equity you have in your home. The equity of your home is its value, less any valid liens (mortgages, taxes, judgement liens) on the house. In most cases the law allows you to keep your home if the equity is $24,000 or less, $48,000 is you are married. If the equity is larger, you can still keep your house if you can pay the difference (the value over the exempt amount), or if you file a Chapter 13 Bankruptcy Case.
Yes, everything valued and listed in the petition can be exempted and kept by you. If you don’t list it, you run the risk of losing it and/or having your bankruptcy petition dismissed. You are required to list all of your assets (property) and all of your debts (loans).
Before you file bankruptcy wage garnishment is allowed for only a few debts: child support and alimony; taxes; student loans. After you file bankruptcy, and while your case is pending, most wage garnishments will end (but not child support or alimony).
No. Jail for non-payment of debts is prohibited by our Constitution. You can only go to jail for intentionally violating a court order. So if there is a court order for you to pay child support, and you have the ability to pay, and refuse, then you can go to jail. But if you owe a bank thousands of dollars and refuse to pay a court judgement stemming from a lawsuit, they cannot put you in jail.
There is no fixed rule, and it depends on the type of financial institution. Most banks will not give you a loan for five years after you file. Credit unions, however, if they were not listed as a creditor in your bankruptcy petition, do not follow that rule and will make loans to qualified borrowers.
If you list a creditor in your bankruptcy petition, the credit card is almost always cancelled by the company. And you are required to list all credit cards debts if you are carrying a balance. If you have a card(s) for which you pay the amount due in full each month, or have no balance, it is up to the credit card company to decide if they will let you keep your account open.
Most deposit agreements with banks give them the right to “set off” any debt from any deposits you have. So if you are behind on a loan, or if you file bankruptcy, they can take every penny from your bank accounts and apply it to their loan. That is why you should not keep your money in bank if you owe that bank money.
If you reaffirm a debt it means you agree to pay it, even though you have filed bankruptcy and your other debts are discharged. Court approval is needed. It is usually a very bad idea to reaffirm a debt.
You are required to list all of your debts, all of your creditors, as of the date your bankruptcy petition is filed. If you owe your attorneys any money, they must be listed, and then when you file you do not have to pay them. As a consequence, in all Chapter 7 bankruptcies, the full fee must be paid before the case is filed. (This rule does not apply to Chapter 13 cases.)
A preference is a special payment you make to a creditor, a payment which is not a regular monthly payment. It also includes payments made to family members or close friends within a year of filing your bankruptcy. If you pay back money you borrowed from your family, and not the other creditors, that is “preferring” them over the others. In that situation the person paid can be sued to give back the money, which is then divided equally among all of your creditors. Payments made after you file your bankruptcy case are not preferences. So wait to pay back your family after you file; do not make payments before you file.
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Kayden Vaporis and Associates will navigate the complicated world of financial law with a host of services that will help you sleep at night.
Financial Legal Services
Kayden Vaporis and Associates are the top Bankruptcy law firm in Western PA, handling more cases than anyone else in Indiana County. With more than 40 years experience in complicated financial cases involving Chapter 7 and Chapter 13 bankruptcies, we can help you get creditors, bill collectors and the IRS off your back.
We can help you arrange for your family’s future by building a plan through Estate Planning & Administration and a comprehensive Will.
Are you overwhelmed with medical bills, or credit card debt where you are struggling to make even the minimum monthly payments? Are you facing a foreclosure of your home? Bankruptcy might be the right way for you to get a fresh start in your financial life. You need the advice of a good bankruptcy lawyer to figure out if bankruptcy or a non-bankruptcy alternative is best for your situation. We have handled more bankruptcy cases for individuals than any other law firm in Indiana County. For over forty years we have handed bankruptcy cases in Pennsylvania, Ohio and Michigan. Contact us to schedule your appointment.
A Chapter 13 is a personal reorganization, which can include a small business, filed when circumstances are such that a Chapter 7 would not work for you.
A Chapter 7 bankruptcy, sometimes called “straight bankruptcy, is the most common bankruptcy filed. It allows you to eliminate nearly all of your debts; the exceptions are student loans, alimony-child support, and most (but not all) taxes. In a Chapter 7 the law allows you to retain your property up to certain limits (called exemptions). Ninety-five percent of the cases filed are cases in which no property is lost or turned over to the bankruptcy trustee. If you have property worth more than the exemptions allow you to keep a Chapter 13 might be the better option. Finally, if your household income is too high (as defined by Congress), you could be ineligible for a Chapter 7 and have to file a Chapter 13.
When you file for Chapter 7 bankruptcy, you can keep all property that is exempt under federal law. The most experienced Indiana County Chapter 7 attorneys can help you take inventory of your exempt assets and ensure that you will be on solid ground after filing bankruptcy.
Although many of your debts will be excused, there are some you won’t be able to discharge with a bankruptcy filing. These debts include:
Our bankruptcy staff answers your additional questions and offers guidance in fill out the necessary forms. We stand by your side through the entire process, including representing you at hearings and court appearances.
Taxes that may be wiped out in a bankruptcy are income taxes more than three years old (if you filed all your returns on time), real estate taxes, per capita taxes and other “local” taxes in Pennsylvania. Taxes that survive bankruptcy, and which you have to continue to pay, are basically trust taxes (sales tax, employee tax withholdings), and taxes less than three years old. Be sure to ask us any questions you might have with your taxes and a possible bankruptcy case.
Filing a Chapter 13 bankruptcy allows you to make up overdue payments, pay off a portion of your debts, eliminate other debts and keep some of your valuable, non-exempt property. In order to qualify for Chapter 13, you must have a regular source of income to apply toward your payment plan. The skilled attorneys of Kayden & Vaporis help you add up your assets, calculate your debts and develop a three- to five-year repayment plan to present to the court.
When considering filing for this type of bankruptcy, you need to find an experienced Chapter 13 attorney. Indiana County hosts two of the state’s premier bankruptcy lawyers, Michael N. Vaporis and Katrina Kayden. They start by asking you what property you want to save or what debts you want to pay off by filing Chapter 13. For example, you can:
We will work with you to calculate your debt against your income and develop your payment plan. If you can stick to the terms of the plan, whatever debt remains at the end of that time is eliminated.
To actually file for bankruptcy, your lawyers draft and submit to the court a petition, your payment plan and several other forms collectively called schedules. The schedules ask you to describe your current financial status and recent financial transactions you’ve entered into within the last two years. Be honest when filling out these forms with our staff or you could jeopardize your petition.
Once your petition and schedules are filed, an automatic stay goes into effect, which halts any court action or foreclosure that is pending against you. Creditors may not contact you directly, but have to go through your attorneys.
A meeting of creditors is scheduled which we will attend with you. You will be asked about a dozen simple questions and a plan will be established. The plan will then be reviewed by the attorney for the Chapter 13 Trustee. One month after you file, you will begin your planned payments.
A typical Chapter 13 Plan goes for five years. At its conclusion you emerge caught up on your loans for property you want to keep (house, car, etc.), with some or all of your old debts wiped clean-discharged.
Our attorneys are experienced in handling Chapter 13 cases and will guide you through every step of your bankruptcy.
Estate Planning and Wills
Three of the most important documents that you can have are: a Last Will and Testament, a Power of Attorney, and an Advance Healthcare Directive (Living Will). These documents help your next of kin make important medical decisions for you if you are unable to, they provide for the maintenance of your assets in the event that you are incapacitated, and they make arrangements for your loved ones when you can no longer be with them. In short, they make your wishes known, providing peace of mind for you and your family.
A power of attorney is a legal document where you give another individual the legal authority to act on your behalf if you are incapacitated, permanently or temporarily, or otherwise unavailable. It ends upon the death of the person who created it.
If you pass away without a will, there is a “default” law which specifies how your property is to be divided among your legal heirs. In a will, you specify how your property is to be divided among the individuals you name when you pass away. If you have young children, or heirs that may not manage money very well, or have special needs, then you may also want to leave their share to a trust. You can also name a guardian for your children in your will. While a choice of guardian can be challenged in court, Pennsylvania courts give a great deal of weight to the guardian chosen by the parent.
An advance healthcare directive is a document that allows you to set forth your wishes for what kind of medical treatment you are willing to receive, and what kind of medical treatment you do not want to receive. This document is used in the event that you are not able to make medical decisions for yourself, either temporarily or permanently. It prevents your loved ones from guessing as to your wishes, and avoids arguments between your family as to what you would have chosen.
If you need assistance in defending a contested will, estate or inheritance contact us to mount a strong defense.
If you want to contest a will or estate, then we can review the legal documents and assess the situation to achieve a satisfactory outcome while trying not to harm family ties in the process.
When a person passes away the property that they own that is not in a contract or account with a beneficiary designation is transferred to the heirs at law (if there is no will), or to the beneficiaries named in the will. In order to do this an “estate” is opened in Orphans Court by an administrator (if there is no will), or the executor named in the will. Once the estate is opened, notice must be sent to those named in the will or heirs at law, and an inventory is usually filed, an inheritance tax return must be filed, and usually the decedent’s last income tax returns must also be filed before there is any distribution to the heirs at law or those named in the will. Our fee for representing the administrator or executor depends on the size and complexity of the estate, but it is often a small percentage of the value of the estate assets. We will provide you with an estimate of the costs and our fee at, or soon after, our first meeting.
Social Security Disability
If you have been disabled in an accident or have a disabling condition you may be eligible for a Social Security Disability claim.
Our attorneys can walk you though the application process to give you the best chances of obtaining benefits.
If you’ve been denied a claim, contact us to examine the case and appeal. Many claims are denied even though you may qualify for benefits.