Posts tagged "bankruptcy"

WHERE SHOULD MY BANKRUPTCY BE FILED?

There may be more than one place where you can file your bankruptcy. The statute indicates you can file where you reside, where you are domiciled or where your principal assets are located. Lets say your permanant address is in Willingboro New Jersey. That is where you have lived and that is where you intend on living. Willingboro NJ is therefore your domicile. But what if you have an ill mother living in Northeast Philadelphia Pennsylvania and you moved in with her for the last nine months to help her. The Philadelphia address is your residence and you could file in either place. If you own, for example, a vacation home in North Carolina and that is your most valuable asset, you could also use North Carolina as the venue to file and file there. For most people they can only file in one place. But as you see, that is not always the case.

HOW MUCH WILL MY CHAPTER 13 BANKRUPTCY PAYMENT BE?

"How much will my Chapter 13 bankruptcy payment be?" is a question I am often asked. While it is a simple question, the answer is not simple since the amount is determined by a number of factors. First, is the Chapter 13 purpose to pay mortgage arrears? If so, the total amount of the arrears would need to be paid over three to five years. Do you owe any priority debt such as taxes. That also must be added to the amount that is to be paid. What if you could afford to pay even more. The court looks at you monthly income and expenses to determine not only if you can afford to pay the mortgage arrears, etc., but also to see if you can pay something to other creditors such as credit cards and medical bills. Another major consideration is the nonexempt equity in your assets. Normally having equity in your home or other assets is a good thing, but in a bankrutpcy it could result in you having to pay something to your creditors. You can protect some equity in assets, but if your equity is more than you can protect, that can also increase your monthly payment. There are a number of factors that your attorney must consider in putting together a confirmable plan.

BANKRUPTCY SALE OF ST CHRISTOPHERS CHILDRENS HOSPITAL

Philadelphia 's Hahnemann Hospital and Saint Christopher's Hospital for Children were part of a health care conglomerate that filed for bankruptcy on July 1, 2019. On September 23, 2019 the bankruptcy court in Wilmington DE approved the sale of Saint Christopher's Hospital for Children for 50 million dollars.  https://www.google.com/amp/s/www.bizjournals.com/philadelphia/news/2019/09/23/st-christophers-50m-sale-wins-ok-from-bankruptcy.amp.html The sale will allow most of the employees to stay employed and allow the renown children's hospital, which has been in existence for over 100 years, to continue. The sale also includes the sale of specialty care physician practices including practices in Northeast Philadelphia, Pennsylvania and Washington Township, New Jersey.  https://www.google.com/amp/s/www.bizjournals.com/philadelphia/news/2019/09/23/st-christophers-50m-sale-wins-ok-from-bankruptcy.amp.html

AVOIDING 1099C TAXABLE INCOME THROUGH BANKRUPTCY

1099c income occurs when there is a cancellation of debt. For example, if you owe a creditor $10,000.00 and they agree to settle for $6,000.00, forgiving the $4,000.00, the sum of $4,000.00 can count as income to you. However, if instead the entire debt is eliminated through a bankruptcy, there is no income to you and no tax consequence since the debt is discharged rather than forgiven or cancelled. A tax can also result from forgiveness of debt with a foreclosure. Again, filing a bankruptcy before the completion of the foreclosure can help avoid a tax liability.

Am I eligible to file a Chapter 13?

"Am I eligible to file a Chapter 13?" is a question I am often asked. Bankruptcy code section 109, entitled "Who may be a debtor" provides many of the requirements. To file a Chapter 13 you cannot have more than $1,257,850.00 in secured debt nor more then $419,275.00 in unsecured debt. Since this is Federal law these rules apply regardless of whether you file bankruptcy in New Jersey, Pennsylvania or anywhere else. In addition you must have completed a credit counseling course within 180 prior to the filing. You must be an individual. Also, you are not eligible to file a Chapter 13 you had a Chapter 13 within the prior 180 days and your prior case was dismissed for willful failure to obey court order or to appear in proper prosecution of a case. In addition, if you dismiss a chapter 13 bankruptcy after the creditor has filed a motion for relief from the automatic stay, you cannot file another Chapter 13 for 180 days. However, if your prior bankruptcy was dismissed by the court, and not at your request, you can refile. There are other rules that come into play, such as good faith. It is best to consult with an experienced bankruptcy attorney to confirm eligibility

UNDERSTANDING BANKRUPTCY

Lets say you are having financial difficulties but are not sure if Bankruptcy is right for you. Where do you begin. The library is a good place to start. I checked out the Willingboro Library at 220 Willingboro Parkway near my Willingboro office. A review of some of the books available in the Willingboro Library such as Chapter 13: Keep your Property and Repay your Debts Over Time, by Stephen Elias and Robin Leonard or Bankruptcy Law for the Individual Debtor by Margaret Jasper are good places to start. Consulting with an attorney should also be considered since bankruptcy law can be complicated. Once you have the knowlege as to how bankruptcy works, it will allow you to make an informed decision as to whether it is right for you.

MEDIAN INCOME FOR BANKRUPTCY INCREASES IN 2019

Under Bankruptcy Law, the Bankruptcy Court takes into account the debtors household income and compares it to the median family income of their state to help determine whether a chapter 13 or a chapter 7 should be filed. On April 1, 2019 the household income numbers increased. In New Jersey, there is a presumption that a Chapter 13 should be filed (although depending on expenses a Chapter 7 is still possible) if income exceeds $68,349.00 for a family of one, $82,263.00 for a family of two, $103,634.00 for a family of three and $125,465.00 for a family of four. In Pennsylvania those numbers are $55,117.00 for a family of one, $66,649.00 for a family of two, $82,518.00 for a family of three and $100,078.00 for a family of four. Note that even if you make less than the average similiar family, equity in assets and expenses will still also be used to determine whether chapter 7 is appropriate.

I DON'T WANT TO INCLUDE MY CAR IN MY BANKRUPTCY

Whether I am in my office in Willingboro New Jersey or in Northeast Philadelphia I often hear the same statement when a client comes in to file a Chapter 7 bankruptcy- "I don't want to include my car in the bankruptcy ".  While keeping a car is generally not a problem, the car is required to be included in the bankruptcy since  a debtor is required to list everything owned and all debts, including car loans. However, in addition to listing the car, a Statement of Intentions regarding the car must also be filed. In it the debtor states whether they intend to surrender the vehicle, reaffirm the debt on the vehicle, or redeem the vehicle. Reaffirm means a form is completed and filed with the court which has the effect of taking the car out of the bankruptcy. The good part is it helps rebuild credit. The bad part is if you default and the car is repossessed you will be liable for any deficiency claim. Redemption is when you have a car worth, for example, $10,000.00 and you owe $15,000 there are companies that will lend you the $10,000 and you are basically saying if I gave you the car back you would only get $10,000 even though I owe you $15,000 so I am giving you $10,000 and that is what you get. The bottom line is keeping your car in a bankruptcy is generally not a problem.

Bankruptcy Benefits For High Income Earners

When you have a high amount of credit card debt, bankruptcy is often a good solution even if you are a high income earner. In a bankruptcy the court considers equity in assets and income compared to expenses in determining whether you can eliminate the debt or whether you have to pay back some or all of the debt. I sometimes have people come into my Cherry Hill, New Jersey or Philadelphia, Pennsylvania office that believe bankruptcy is not an option because they "earn too much money". While the high income may prevent the individual from filing a chapter 7, they can file a chapter 13 bankruptcy. Depending on disposable income after taking into account reasonable and necessary living expenses, the disposable income would be used for a period up to five years to pay the creditors. Depending on total debt and income, you may be able to pay a reduced amount, like 40% of the debt. However, even if you have to pay the debt in full, you can pay it over 5 years without interest. This results in a significant savings. Short term, the payment is going to be less than you were paying monthly. Long term the savings is even greater because if you are paying minimum payments on a credit card, it will take approximately 22 years to pay off the debt. In Chapter 13, it is only 5 years. Even a high income earner should consult with an experienced bankruptcy attorney if they are struggling with high credit card debt.

Retailers Struggle to Avoid Bankruptcy

On line shopping and high rent costs, among other things has caused multiple retailers to seek protection in Chapter 11 bankruptcy or file Chapter 7 bankruptcy and close. Competition from on line sellers combined with high operating costs are the leading causes. It seems like another large retailer may soon be in bankruptcy. According to USA Today , the retailer Barney's is considering filing a bankruptcy.  https://www.google.com/amp/s/amp.usatoday.co/amp/1728925001 The reasons given are pretty typical of the problems facing many retailers today. A combination of high rent and online competition. The final straw may have been a rent increase at the Madison Avenue location which according to USA Today went from$16 to $30 million in January. The impact on the Philadelphia Pennsylvania Barney's is still unclear. Choices of retailers may soon be a thing of the past.

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