August 2016 Archives

Qualifying Military Service and Bankruptcy Means Test

As a general rule, individuals filing a bankruptcy in New Jersey, Pennsylvania and other states must complete and file a "Statement of Your Current Monthly Income," referred to as the means test. Under this test, if you make more than the average family your size in your state, then limits may be imposed on your expenses which could result in you having to pay some or all of your debt back in a Chapter 13. The income limits in Pennsylvania are lower than in New Jersey. However, if you are in the military you may be exempt from this requirement.

Bankruptcy closes Midtown II diner

A Bankruptcy ultimately was not enough to save a Philadelphia Pennsylvania diner. According to Philly.com at   http://articles.philly.com/2016-06-02/business/73496318_1_diner-bankruptcy-health  , during the last two years, the Midtown II diner at 11th St and Sansom St in Philadelphia was cited by the sanitations department for 125 health code violations, 66 of them serious.

Information Required when Filing Bankruptcy

Since bankrupcy is a federal law, whether filing bankruptcy in Voorhees, New Jersey or Philadelphia, Pennsylvania, the information to be provided is the same.  Section 521 of the bankruptcy code, entitled "Debtor's Duties" lists different requirements.  The debtor needs to provide 1.) a list of creditors, 2.) a schedule of assets and liabilities, 3.) a schedule of current income and current expenditures, 4.) a statement of the debtor's financial affairs, 5.) a bankruptcy petition signed by the debtor's attorney, 6.) copies of all payment advices received within 60 days before the date of the filing of the petition, 7.) a statement of the amount of monthly income, 8.) a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition, 8.) a statement of the debtor's intention with respect to the retention or surrender of property, 9.) a copy of the debtor's federal income tax return. In addition, a trustee may ask for additional information such as bank statements, deeds, etc.

Discharging Willful and Malicious Damages in Bankruptcy

Damages caused by willful and malicious injury to another person cannot be discharged in bankruptcy. Bankruptcy discharges many kinds of debt. However, there are some exceptions under Section 523 of the bankruptcy code. One type of exception relates to Willful and Malicious Injury to another person. For example, Kathryn Knott was recently released from a women's prison in Northeast Philadelphia. http://www.phillymag.com/news/2016/07/12/kathryn-knott-released-from-jail/  According to Phillymag.com a civil lawsuit has been filed against her and the other two attackers by the victim. If any of them turned to bankruptcy, if the injuries were the result of a Willful and Malicious attack, the damages claim would not be discharged. In other words, they would still owe the money to the victims. The Philly mag article also notes there is a $2000 fine owed. That would also not be dischargeable under Section 523 of the bankruptcy code.

Reestablishing Credit after Bankruptcy

Each year a number of people file for bankruptcy protection as a responsible means of getting their financial lives back on track. Across the United States, over eight hundred thousand individuals filed for personal bankruptcy in 2015 and in New Jersey that number was around 25,000. Typically a bankruptcy will reduce or eliminate debt. By also taking some proactive steps, recovering after filing may be faster than expected.

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