Monday, April 27, 2009

The Three Most Common Mistakes in Bankruptcy

Three of the most common errors that cause you to lose property in Bankruptcy. If you make any of these mistakes, you will lose property, time, or spend hundreds of dollars you don’t need to spend:

Mistake Number One: Failure To List All Your Assets.

You are required by the Court to list all of your assets. Under the bankruptcy code you are allowed to keep a certain amount of property. All of the rest of your property is turned over to the Bankruptcy Trustee as an asset to pay your creditors. You can also be charged with Bankruptcy Fraud as a crime by failing to list an asset or have your case dismissed for fraud and be barred from filing for up to 8 years.

Mistake Number Two: Failure To List All Your Debts.

You are required by the Court to list all your debts and all your assets. You do not want to miss a single Creditor when you prepare your bankruptcy, even if you wish to keep the debt or if someone is cosigned on that debt. If you want to keep your car, home, or a credit card, list it anyway. If you don’t think the debt can be bankrupted, list it anyway. If you do not list the Creditor, he may be unaffected by the bankruptcy until you amend and add him. Also under the new law, you must list him with an address the Creditor has used at least twice in mail to you. You are charged extra Court costs to add a Creditor later.

In preparation for filing bankruptcy, it is very important that a debtor create a list of their debts with correct account numbers and addresses for each and every Creditor. Most credit reports normally don’t list the addresses of the Creditors or the account numbers. Furthermore, it is highly advisable that the debtor in a bankruptcy case indicate the purpose of each debt and whether it was secured or unsecured and whether it belongs to the Husband, Wife or Joint. In an effort to conserve our precious natural resources and save paper, all of this information can be entered on our website ( under the "Stop My Bills" section of the website which is then transmitted to the Dunne Law Offices, P.C. through a fire-walled secure server with 256 bit encryption.

Mistake Number Three: Failure To Show Up At Your 341 Hearing.

If you miss the 341 hearing in Pennsylvania, your case will be dismissed. If your case is dismissed because you missed your hearing, you will probably have to pay another Attorney fee and filing fee. Every year, people file for a bankruptcy and then fail to come to their 341 hearing. They oversleep, they get lost on the way to the courthouse, or they simply forget the hearing or don’t care. In any bankruptcy, you will have a 341 hearing (also called the Meeting of Creditors) in about four to six weeks after you file. The Bankruptcy Court in Pennsylvania, like most federal Courts, rarely accepts excuses for missing a hearing. Miss your 341 hearing and your bankruptcy will be dismissed. The Courts have very little tolerance for missed hearings or missed payments.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102

Friday, April 24, 2009



I am a green lawyer that is interested in reducing waste, increasing workflow productivity while conserving our precious natural resources. Contrary to popular belief, all of the above can be accomplished through the implementation of innovative technology that already exists in the marketplace.

By writing this article, I hope to persuade other lawyers and law firms to transform their legal practice to a greener practice because it is economically sensible to cut costs where possible in this recession.

From a practical point of view, I designed my workflow process from client interview to client invoicing to be a paperless process thereby saving time, reducing costly office supplies and increasing productivity.

My suggestion to other lawyers and law firms would be to adhere to the following Standard Operating Procedures (SOP's) that I have implemented in my consumer bankruptcy practice to reduce costs in their current work flow processes.

1. During the first client interview - take electronic notes on a quite keyboard.

2. Between the first and second interview - direct the client to complete an online questionnaire on your website to supplement any answers to questions they were unable to completely answer during the first interview.

3. Ensure that any online form or questionnaire that is been completed by the client is on a secure fire-walled server with 128/256 encryption.

4. Download the online form or questionnaire from the secure server into your business/home office PC and merge the data to save time and increase productivity.

5. File the complaint or bankruptcy petition electronically.

6. Email the invoice to the client - which has the dual benefit of conserving paper and knowledge that the client received the invoice.

7. For due diligence, create a PDF of every document during the course of the legal representation and store on your home/office PC, external hard-drive and off-site secure server.

8. Feel good about been a green lawyer!

The above seven (7) steps can be applied to any practice area by using innovative technology that already exists in the marketplace. Implementing these proactive measures increases workflow productivity, reduces waste and conserves our precious resources.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102


A Chapter 13 bankruptcy provides individuals with “regular income” an alternative to “straight bankruptcy.” Under Chapter 13, the individual may retain his or her assets, including non-exempt assets which otherwise would be liquidated and distributed to creditors in a Chapter 7 case. Instead he/she makes periodic payments to creditors under a three to five year payment plan approved by the court. However, a creditor can receive no less under a Chapter 13 than it would under a Chapter 7 liquidation. Chapter 13 has several additional aspects which might make it more advantageous to a debtor than a Chapter 7 proceeding. First, real estate mortgages in default may be cured. 11 U.S.C. § 1322(b)(5). Second, certain alterations may be made in the repayment terms of other secured obligations, such as lowering the monthly payment and extending the payout period. 11 U.S.C. § 1322(b)(2).

Under Chapter 13 procedure, there is also a First Meeting of Creditors § 341 Meeting at which the debtor is examined by the trustee and any creditors who wish to appear. In order to receive money (distribution by the Trustee), a creditor must file a Proof of Claim. The debtor can object, if necessary, to excessive claims, or amend the plan; if necessary, to provide for payment to the creditors who have filed claims. The plan must put the different types of debts into separate classifications and specify the proposed treatment for each class. Usually, Chapter 13 plans provide for payment of debts secured by property that the debtor wishes to retain.

It should be noted that the Chapter 13 plan need only cure arrearage on long-term secured claims (while paying all mortgage payments which fall due after the filing of the bankruptcy petition) and need not pay the debt in full. Alternatively, the debtor can propose to pay off the secured debt in full or not “provide for” the secured claim at all (although a secured creditor whose claim is “not provided for” ordinarily has the right to obtain an order granting relief from the automatic stay to pursue its remedies in state court). There are now several provisions which may impose limitations on the manner in which a debtor provides for debts secured by automobiles, depending upon the particular facts of the case. See 11 U.S.C. §§1325(a)(9), 1326(a)(1).

Plan payments are made to the trustee beginning the first day of the first month after the petition is filed. The plan must provide for the full payment of all priority claims. Priority claims typically include many tax obligations, support and alimony and administrative expenses (trustee’s commissions, debtor’s counsel’s attorney’s fee).

Unsecured claims must be paid at least as much as they would receive in a Chapter 7 case (which may be zero in a case that would be a “no-asset” Chapter 7 case). The debtor must devote to the plan the amount of the debtor’s “disposable income” for either a 36 or 60 month period, depending upon the level of the debtor’s “current monthly income” as that term is defined in 11 U.S.C. § 101(10A).

Disposable income means the debtor’s current monthly income less the amount of the reasonably necessary living expenses of the debtor and the debtor’s dependents or for, for a debtor engaged in business, the amounts necessary for the operation of the debtor’s business. 11 U.S.C. § 1325(b). In cases of above median debtors, the determination of the debtor’s reasonably necessary living expenses may be determined using most of the methodology employed in Chapter 7 cases in determining abuse under §707(b).

A confirmation hearing will be held approximately three to six months after filing. If everything is in order, the court will enter a confirmation order and the trustee will commence distributing money to the creditors pursuant to the filed plan.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102

Thursday, April 23, 2009


Dunne Law Offices, P.C. is giving back to the community by providing free legal services through the Consumer Bankruptcy Assistance Project (CBAP) to those in need. We have established a policy of mandatory pro bono service for all employees.This required participation benefits the greater community and cultivates public-spiritedness in each individual that ultimately makes us all stronger. The Consumer Bankruptcy Assistance Project (CBAP) provides free legal advice and representation to low-income individuals seeking relief from consumer debts. CBAP was created by a group of consumer and business bankruptcy lawyers, as well as members of the Eastern District of Pennsylvania Bankruptcy Conference, Community Legal Services, and Philadelphia Volunteers for the Indigent Program. Volunteer lawyers are trained by CBAP to interview and counsel clients faced with consumer bankruptcy problems and assist in filing Chapter 7 bankruptcies.

If you know anyone that may be interested in free legal assistance to help them resolve their financial problems, please advise them to contact CBAP.

Consumer Bankruptcy Assistance Project
42 S. 15th Street, 4th Floor
Philadelphia, PA 19102
Tel: 215.523.9511
Fax: 215.981.3866


Student Loans and Chapter 7 Bankruptcy

Most student loans are obtained from a lending institution and are ultimately guaranteed by the United States Department of Education. In many situations the loans are guaranteed by a middle entity, usually one of the forty-seven state guarantee agencies. The Pennsylvania Higher Education Assistance Agency (PHEAA) is such a guarantee agency. If a student defaults on a student loan, the original lender seeks reimbursement from the guarantee agency. Once the lender is repaid, the guarantor then holds the promissory note and commences collection action. PHEAA has state statutory authority to commence an administrative action to garnish the borrower’s wages. There is also federal authority to collect on defaulted loans through income tax refund intercepts. These collection actions often prompt clients to inquire about bankruptcy as a way of preventing or eliminating these collection practices.

As a general rule, a student loan guaranteed by the government or made by a nonprofit institution is not dischargeable under 11 U.S.C. §523(a)(8). As a result of the 2005 amendments to the Bankruptcy Code, student loans made by private entities for which repayments are tax deductible are also nondischargeable. Normally, the debtor should attempt to obtain a nonbankruptcy discharge before seeking a bankruptcy hardship discharge.

However, there is an exception to this general rule of student loan nondischargeability for student loans. If the repayment of the loan would create an undue hardship on the debtor and his/her family, the debt may be discharged. This discharge is commonly referred to as an undue hardship discharge. In order to successfully assert that a debtor is eligible for an undue hardship discharge, it is necessary to satisfy the three-pronged test for determining "undue hardship" adopted by the Third Circuit in the Court of Appeals decision on November 28, 1995 in its decision In re Faish, 72 F 3d. 298 (3d. Cir. 1995), which adopted a three part test based upon the Second Circuit’s decision in Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2d Cir. 1987). Under this test, "undue hardship" requires a three-part showing:

  1. that the debtor cannot maintain, based on current income and expenses, a minimal standard of living for herself and her dependents if forced to repay the student loans;
  2. that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period for student loans; and
  3. the debtor has made "good faith" efforts to repay the loans (which means that the debtor’s student loan default was caused by circumstances beyond the debtor’s control and not the debtor’s willful negligent conduct).
The debtor has the burden of establishing each element of this test by a preponderance of the evidence. For purposes of clarity, the preponderance of the evidence standard simply means "more probable than not." The standard is met if the the proposition is more likely to be true than not true. Effectively, the standard is satisfied if there is greater than 50 percent chance that the proposition is true.

Dunne Law Offices, P.C.

(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102

Wednesday, April 22, 2009


Important Information for Clients Regarding the Meeting of Creditors:
After your bankruptcy petition is filed, the Bankruptcy Court will schedule a 341 hearing, also called a “meeting of creditors.” It will probably be scheduled within one month of filing.

In Philadelphia, these hearings are held at: 833 Chestnut Street, Suite 501 West, 5th Floor, Philadelphia, Pennsylvania.

You and your attorney must attend this meeting with the United States Bankruptcy Court Trustee. At the 341 hearing, the United States Bankruptcy Trustee will review your bankruptcy petition and will ask you questions. The Trustee will ask you to verify in person the written information you have already listed in your petition. The 341 hearing is usually short and routine. After the hearing, the Trustee will recommend to the Bankruptcy Court Judge whether or not to discharge your debts.

It is very important that you appear before the Trustee at the 341 hearing. You must be present or-your bankruptcy could be dismissed. If you are unable to attend, you must call your attorney immediately so that the Trustee can be contacted. Your attorney can request that the Trustee reschedule the meeting. When you receive your 341 hearing notice, please contact your attorney to confirm that you will attend.

20 Plus Questions Usually Asked by the Trustee of Debtors at the Meeting of Creditors

  1. State your name
  2. State your address
  3. Identify the signature on debtor’s oath form
  4. Do you rent or own your home?
  5. Are you married?
  6. Are you employed?
  7. Have you ever filed for bankruptcy before?
  8. Have you sold or otherwise disposed of any property in the past twelve months?
  9. Do you have any credit cards in your possession for which you listed debts on your petition?
  10. Identify the signature on first page of bankruptcy petition.
  11. Did you review the petition before you signed it to make sure that everything in it was true and correct?
  12. Did you list all of your real estate on Schedule A?
  13. Did you list all of your personal property on Schedule B?
  14. Do you own any individual items of personal property worth more than $200.00?
  15. Is Schedule C a complete list of the property that you are claiming as exempt (that you want to keep)?
  16. Did you list all of your secured creditors on Schedule D?
  17. Did you list all of your priority creditors on Schedule E?
  18. Did you list all of your other creditors on Schedule F?
  19. Was Schedule I an accurate reflection of your income when you filed?
  20. Was Schedule J an accurate reflection of your monthly expenses when you filed?
  21. Have you paid your filing fee in full, or received the required waiver from the Court?
  22. What did you pay your attorney for representing you in your bankruptcy?
  23. Why did you have to file for bankruptcy?

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, 2 Penn Center, Suite 200
Philadelphia, PA 19102


With the new bankruptcy law in effect since October 17, 2005, there is a lot of confusion with regard to the new "means test" requirement. The means test is used by the courts to determine eligibility for Chapter 7 or Chapter 13 bankruptcy.

In Chapter 7 cases, the means test determines whether a debtor may obtain Chapter 7 relief. In Chapter 13 cases, the means test determines the amount, if any, that must be paid to unsecured creditors for a plan to be confirmed over the objection of an unsecured creditor or the Chapter 13 trustee. The starting point in means testing is the determination of the debtor’s “current monthly income.” Current monthly income is defined as all of the income received by the debtor in the six months prior to the commencement of the case divided by six. Allowable expenses are then subtracted from current monthly income. The debtor’s allowable expenses are those established by the national and local standards of the Internal Revenue Service, the debtor’s actual expenses in the categories of “other necessary expenses” set by the Internal Revenue Service and certain other expenses allowed as set forth in the Bankruptcy Code itself. A debtor whose net income after consideration of allowable expenses (called, as a term of art, “disposable income”) is either above $182.50 per month or whose disposable income is sufficient to pay a 25% of nonpriority, unsecured claims cannot proceed under Chapter 7 of the Bankruptcy Code.

In many Chapter 13 cases, a similar analysis is employed to determine the amount that unsecured creditors may demand to be paid in the debtor’s Chapter 13 plan. The means testing provisions in Chapter 7 are NOT APPLICABLE to debtors whose current monthly income is less than the median income for the household size in the state in
which the debtor resides.

Bankruptcy Form 22A is the form chapter 7 debtors will complete for “means testing” purposes; Form 22C is the form chapter 13 debtors will complete. A debtor must enter income and expense information onto the appropriate form (i.e., Form 22A or Form 22C)and then make calculations using the information entered. Some of the information needed to complete these forms, such as a debtor's current monthly income, comes from the debtor's own personal records. However, other information needed to complete the forms comes from the Census Bureau and the Internal Revenue Service (IRS).

In order to obtain State Median Family Income information necessary to complete the Bankruptcy forms, visit the following website:
In order to obtain National and Local Standards information necessary to complete the Bankruptcy forms, visit the following website:,,id=96543,00.html

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, 2 Penn Center, Suite 200
Philadelphia, PA 19102

Tuesday, April 21, 2009


Before you can file for bankruptcy under either Chapter 7 or Chapter 13, you must complete credit counseling with an agency approved by the United States Trustee’s office.


Eastern District of Pennsylvania Advantage Credit Counseling Service Inc.
River Park Commons
2403 Sidney Street
Suite 400
Pittsburgh, PA 15023
In Person, Telephonic

Consumer Credit Counseling Service of Delaware Valley, Inc.
1515 Market Street
Suite 1325
Philadelphia, PA 19102
In Person and Telephonic

Consumer Credit Counseling Service of Greater Atlanta Inc.
100 Edgewood Avenue
Suite 1800
Atlanta, GA 30303
In Person (not available in all judicial districts), Telephonic and Internet

Consumer Credit Counseling Service of New Jersey
185 Ridgedale Avenue
Cedar Knolls, NJ 07927-1812
In Person, Telephonic, & Internet

Credit Counseling Center
832 Second Street Pike
Richboro, PA 18954
In Person (not available in all judicial districts), Telephonic, & Internet

Credit Counseling Centers of America
9330 LBJ Freeway
Suite 900
Dallas, TX
In Person (not available in all judicial districts), Telephonic & Internet

Garden State Consumer Credit Counseling, Inc.
225 Willowbrook Road
Freehold, NJ 07728
In Person (may not be available in all judicial districts) & Telephonic

GreenPath, Inc.
38505 Country Club Drive, Suite 210
Farmington Hills, MI 48331-3429
In Person (not available in all judicial districts), and Telephonic

Hummingbird Credit Counseling and Education, Inc.
3737 Glenwood Avenue
Suite 100-106
Raleigh, NC 27612
Telephonic & Internet

Institute for Financial Literacy, Inc.
449 Forest Avenue
Suite 12
Portland, ME 04101

Telephonic & Internet
Money Management International Inc.
9009 West Loop South
7th Floor
Houston, TX 77096-1719
In Person (not available in all judicial districts), Telephonic & Internet

Springboard Nonprofit Consumer Credit Management Inc.
4351 Latham Street
Riverside, CA 92501
In Person (not available in all judicial districts), Telephonic & Internet

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, 2 Penn Center, Suite 200
Philadelphia, PA 19102

Philadelphia Bankruptcy Attorney

The Dunne Law Offices offers customized bankruptcy solutions to businesses and individuals. We strive to deliver excellent service in a timely and cost-effective manner. Our goal is not merely to meet clients’ expectations, but to exceed them, by offering:

  • Experienced & Sophisticated Attorneys: All our clients will be represented by highly skilled and dedicated attorneys who provide a level of sophistication and a value proposition that is unmatched.
  • Industry Expertise: Our clients appreciate working with attorneys who understand the specific characteristics of their industries.
  • Reasonable Rates: We are conscious about the cost of legal services. Our rates are competitive and significantly less than the competition.
  • Innovative Technology: The firm utilizes cutting edge technology to reduce costs and improve the quality of legal services.

At Dunne Law Offices, our lawyers and legal staff strive to ensure that our clients receive top rate legal representation to all their legal problems. Our attorneys practice Bankruptcy Law and have a wide variety of experience that can be applied to any legal matter. No matter what legal issue you are facing, a lawyer at our Philadelphia Law Firm can provide you with whatever legal support you need.

To speak directly, one on one, with an experienced and knowledgeable Philadelphia Bankruptcy Lawyer, please contact the Dunne Law Offices at (215) 854-6342. We offer a free initial consultation for all consumer bankruptcy matters.

The Dunne Law Offices, P.C. is a debt relief agency. The Dunne Law Offices, P.C. helps people file for bankruptcy relief under the bankruptcy code

Dunne Law Offices, P.C.

(215) 854-6342
1500 JFK Blvd, 2 Penn Center, Suite 200
Philadelphia, PA 19102

Obtaining Information from Credit Reporting Services

Obtain a free credit report through the internet by contacting
The three main credit reporting services are listed below. However, the easiest, quickest
and most thorough method is to utilize the services of

Information Services Division
P.O. Box 9556
Allen, TX 75013
Tel. 800-493-1058

Trans Union Corporation
P.O. Box 7000
North Olmstead, Ohio 44070
Tel. 800-916-8800

Equifax Credit Information Services
Box 740256
Atlanta, GA 30374
Tel. 800-685-1111

Dunne Law Offices, P.C.
1500 JFK Blvd, 2 Penn Center, Suite 200
Philadelphia, PA 19102
Tel. 215 -685-6342

Part 1 Introduction

more about "Part 1 Introduction", posted with vodpod

Part 2 Types of Bankruptcy

more about "Part 2 Types of Bankruptcy", posted with vodpod

Part 3 Limits of Bankruptcy

more about "Part 3 Limits of Bankruptcy", posted with vodpod

Part 4 Filing for Bankruptcy

more about "Part 4 Filing for Bankruptcy", posted with vodpod

Part 5 Creditors' Meeting

more about "Part 5 Creditors' Meeting", posted with vodpod

Part 6 Court Hearings

more about "Part 6 Court Hearings", posted with vodpod

Part 7 The Discharge

more about "Part 7 The Discharge", posted with vodpod

Part 8 Legal Assistance

more about "Part 8 Legal Assistance", posted with vodpod

Monday, April 20, 2009


Bankruptcy terms are often very confusing. It is like learning a foreign language. Here are brief definitions of many terms used in this site and in the Bankruptcy Code. It is our hope this glossary will help you to better understand the bankruptcy process.

Adversary proceeding: A lawsuit filed in the bankruptcy court that is related to the debtor's bankruptcy case. Examples are complaints to determine the dischargeability of a debt and complaints to determine the extent and validity of liens.

Automatic stay: The injunction issued automatically upon the filing of a bankruptcy case that prohibits collection actions against the debtor, the debtor's property or the property of the estate.

Avoidance: The Bankruptcy Code permits the debtor to eliminate (avoid) some kinds of liens that interfere with (or impair) an exemption claimed in the bankruptcy. Most judgment liens that have attached to the debtor's home can be avoided if the total of the liens (mortgages, judgment liens and statutory liens) is greater than the value of the property in which the exemption is claimed. This is sometimes called "lien stripping."

Avoidance powers: Rights given to the bankruptcy trustee or the debtor in possession to recover certain transfers of property made prior to the filing of the bankruptcy case. This power allows the trustee to recover assets that seized, transferred or sold prior to the filing of the bankruptcy. Either the Bankruptcy Judge or the Trustee will then sell the assets at a public auction and use the funds from the sale of those assets to pay creditors in the bankruptcy.

Bankruptcy Code. Title 11 of the United States Code governs bankruptcy proceedings. Bankruptcy is a matter of federal law and is, with the exception of exemptions, the same in every state. When federal bankruptcy law conflicts with state law, federal law controls. In other words, if a garnishment, trustee's sale or repossession is about to take place (all state actions), then a bankruptcy (federal law) will stop those actions for some period of time.

Bankruptcy estate: The estate is all of the legal and equitable interests of the debtor as of the date the bankruptcy case was filed with the Court. From the estate, an individual debtor can claim certain property exempt; the balance of the estate is liquidated by the Chapter 7 Trustee and used to pay the administrative costs of the proceeding and the claims of creditors according to their priority.

Chapter 7: The most common form of bankruptcy, a Chapter 7 case is a liquidation proceeding, available to individuals, married couples, partnerships and corporations.

Chapter 11: A reorganization proceeding in which the debtor may continue in business or in possession of its property as a fiduciary. A confirmed Chapter 11 plan provides for the manner in which the debtor will pay the claims of creditors in whole or in part.

Chapter 12: A simplified reorganization plan for family farmers and fishermen, whose debts fall within certain limits.

Chapter 13: A repayment plan for individuals with debts falling below statutory levels which provides for repayment of some or all of the debts out of future income over 3 to 5 years.

Collateral: The property which is subject to a lien. A creditor with rights in collateral is a secured creditor and has additional protections in the Bankruptcy Code for the claim secured by collateral. The measure of the secured claim is the value of the collateral available to secure the claim: it is possible to have a lien on property that is subject to a senior lien or liens such that the security available to pay the claim is really without value to the junior creditors. The rule with respect to liens is "First in time, first in right."

Confirmation: The court order which makes the terms of the plan for repayment of debts in a Chapter 11, 12 or 13 binding. The terms of the confirmed plan control over all pre-existing contracts or obligations as between the debtor and creditor.

Conversion: Bankruptcy cases may be converted from one chapter to another chapter; for example, a Chapter 7 case may be converted to a case under Chapter 13 if the debtor is eligible for Chapter 13.

Creditor: The person or organization to whom the debtor owes money or some other form of legal obligation.

Cramdown: If the creditors do not approve a plan of reorganization, the court may still approve it, if the bankruptcy judge believes it is in the best interest of all parties. Normally a cramdown involves reducing a secured creditor's debt to the fair market value of the property, with the balance of the debt determined to be unsecured.

Debtor: The debtor is the entity (person, partnership or corporation) who is liable for debts, and who has filed for bankruptcy protection.

Debtor in Possession: In a Chapter 11 case, the debtor usually remains in possession of its assets and assumes the duties of a trustee. The debtor in possession is a fiduciary for the creditors of the estate, and owes them the highest duty of care and loyalty.

Denial of discharge: If the Debtor commits bankruptcy fraud, or fraud on its creditors as a whole, then the Debtor can be denied a discharge. The grounds on which the debtor's discharge may be denied are found in 11 U.S.C. 727. When the debtor's discharge is denied, the debts that could have been discharged in that case cannot be discharged in any subsequent bankruptcy. The administration of the case, the liquidation of assets and the recovery of avoidable transfers continue for the benefit of creditors.

Discharge: A discharged debt is one that the creditor cannot make a demand for payment. If they do that creditor is in contempt of the federal restraining order and can be fined for its intentional conduct. Unless the court has determined otherwise, the secured creditor can still enforce on its lien against its collateral (such as cars and homes).

Dischargeable: Debts that can be discharged in bankruptcy. Certain debts are not dischargeable in a chapter 7 bankruptcy, but may be in a chapter 13 (such as fraud). Some debts cannot be discharged at all – such as child support, criminal restitution, and some student loans.

Dismissal: The termination of the case. If a case is dismissed then the debtor and the creditors have the same rights and remedies as they had before the bankruptcy case was filed.

Docket: A formal record of all action pending before the court in one matter. These actions are assigned consecutive filed numbers. The bankruptcy docket includes all pleadings, minute entries, orders and any other document filed in the particular case. The docket numbers are usually electronically linked to the referenced document.

Electronic Case Filing: CM/ECF is the federal courts' case management and electronic case files system. It provides courts enhanced and updated docket management. It allows courts to maintain case documents in electronic form. And it gives each court the option of permitting case documents -- pleadings, motions, petitions -- to be filed with the court over the Internet. CM/ECF implementation in the bankruptcy courts has been underway since early 2001. District court implementation began in 2002. Appellate court implementation began in late 2004.

Exempt: Property that is exempt is removed from the bankruptcy estate and is not available to pay the claims of creditors. The debtor selects the property to be exempted from the statutory lists of exemptions available under the law of his state. The debtor gets to keep exempt property for use in making a fresh start after bankruptcy.

Exemptions: Exemptions are lists of the types of property that is protected by law from your creditors, and the bankruptcy Trustee. Each state has its own list of exempt property. There is also a list of exempt property under federal statutes. The types and values of exempt property differ greatly from state to state.

Fiduciary: A person or entity who is entrusted with duties on behalf of another, (such as an attorney or a person with power of attorney). The law requires the highest level of good faith, loyalty and diligence from a fiduciary. This duty is higher than the common duty of care that we all owe to each other.

General, unsecured claim: Claims (debts) that do not fall into the administrative or secured category. Usually, credit cards, medical bills and personal loans are general, unsecured claims. If the bankruptcy has funds, after paying administrative and priority claims, then unsecured claims will receive a pro-rata payment. For example – all general unsecured may receive 10 percent of the entire amount of their debt.

Lien: An interest in real or personal property that secured a debt; the lien may be voluntary, such as a deed of trust on land, or involuntary, such as a judgment lien or tax lien.

Liquidated: A debt that is for a known number of dollars is liquidated. An unliquidated debt is one where the debtor has liability, but the exact monetary measure of that liability is not known. Tort claims (such as personal injury lawsuits) are usually unliquidated until a trial fixes the amount of the liability of the person being sued.

Non dischargeable: A debt that cannot be eliminated in bankruptcy (such as child support and most student loans). Non-dischargeable debts remain legally enforceable despite the bankruptcy discharge. The Code's list of non dischargeable debts is found at 11 U.S.C. 523.

Perfection: When a secured creditor has taken the required steps to perfect his lien, the lien is senior to any liens that arise after perfection. A deed of trust is perfected upon execution and delivery of the Deed to the Buyer; filing a financing statement with the secretary of state perfects a lien in personal property. An unperfected lien is valid between the debtor and the secured creditor, but may be behind liens created later in time, but perfected earlier than the lien in question. The trustee can avoid an unperfected lien.

Personal property: Property that is not land (real property) or affixed to land. Personal property includes cars, stock, furniture, etc.

Petition: The document that initiates a bankruptcy case. The filing of the petition constitutes an order for relief and institutes the automatic stay. Events are frequently described as "prepetition". That means the event happened before the bankruptcy petition was filed, and "post petition", after the bankruptcy was filed.

Preference: A transfer to a creditor in payment of an existing debt made within certain time periods before the commencement of the case (anywhere from one year to 3 months prior to filing the bankruptcy). The Trustee may recover preferences for the benefit of all creditors of the estate. Therefore, if a friend or relative is paid and not other creditors, the Trustee can demand that the friend or relative return all funds received within on year prior to filing the bankruptcy.

Pre-petition: The time before filing a bankruptcy. Usually, the only debts affected by a bankruptcy are those owed pre-petition. There are some exceptions for chapter 11, 12 and 13.

Priority: The Bankruptcy Code establishes the order in which claims are paid from the bankruptcy estate. All claims in a higher priority must be paid in full before claims with a lower priority receive anything. All claims with the same priority share pro rata. Claims are paid in this order: 1) costs of administration (such as attorney and CPA fees), 2) priority claims (such as IRS) and 3) general unsecured claims (such as credit cards). Secured claims are paid from the proceeds of liquidating the collateral that secured the claim (such as house or car).

Priority claims: Certain debts, such as unpaid wages, spousal or child support, and taxes are elevated in the payment hierarchy under the Code. Priority claims must be paid in full before general unsecured claims are paid. Go to discussion of priority taxes.

Proof of claim: The form filed with the court establishing the creditor's claim against the debtor.

Property of the estate: The property that is not exempt and belongs to the bankruptcy estate. The trustee usually sells property of the estate and the claims of creditors paid from the proceeds.

Reaffirm: The debtor can choose to reaffirm debts that would otherwise be discharged by the bankruptcy. Generally, when a debt is reaffirmed, the parties to the reaffirmed debt have the same rights and liabilities that each had prior to the bankruptcy filing: the debtor is obligated to pay and the creditor can sue or repossess if the debtor doesn't pay.

Relief from stay (also called motion for relief from the automatic stay): A creditor can ask the judge to lift the automatic stay and permit some action against the debtor or the property of the estate. If the motion is granted, the moving party (but no one else) is free to take whatever action the court permits. Relief can be absolute, for example, permitting the creditor to foreclose on property, or limited, as for example, allowing the recordation of a notice of default.

Schedules: The debtor must file the required lists of assets and liabilities to commence a bankruptcy case, collectively called the schedules.

Secured debt: A claim secured by a lien in the debtor's property by reason of the debtor's agreement or an involuntary lien such as a judgment or tax lien. The creditor's claim may be divided into a secured claim, to the extent of the value of the collateral, and an unsecured claim equal to the remainder of the total debt. Generally a secured claim must be perfected under applicable state law to be treated as a secured claim in the bankruptcy.

Unsecured: A claim or debt is unsecured if there is no collateral that is security for the debt. Most consumer debts (credit cards, personal loans, doctor bills) are unsecured

Further definitions are found in Section 101 of the Bankruptcy Code.

To speak directly, one on one, with an experienced and knowledgeable Philadelphia Bankruptcy Lawyer, please contact the Dunne Law Offices at (215) 854-6342. We offer a free initial consultation for all consumer bankruptcy matters.

The Dunne Law Offices, P.C. is a debt relief agency.
The Dunne Law Offices, P.C. helps people file for bankruptcy relief under the bankruptcy code.

The Difference Between Chapter 7 and Chapter 13 Bankruptcies

Chapter 7 and Chapter 13 are two different kinds of bankruptcies available to individuals, some businesses, and married couples with financial problems.

A straight liquidation bankruptcy, known as a Chapter 7 bankruptcy, involves the filing of a bankruptcy petition and statement of all property, debts, and budget information. The filing of the petition stops all creditor action against the Chapter 7 debtors and their property, including mortgage foreclosure, sheriffs sale, utility shut-offs, and other creditor harassment. Chapter 7 debtors can generally keep all their personal property, but debtors can keep their home and cars only if arrangements are made separately by the debtors themselves for payment of all current and back payments of auto loans, mortgage payments and finance company liens against their home.

Chapter 7 debtors usually have one short meeting with a trustee. After Chapter 7 discharge, debtors no longer have personal liability for most of their utility and consumer debts petition Chapter 7 does not discharge debts such as mortgage payments ( if the debtors wants to keep the property), city water/sewer liens, ongoing utility bills, auto loan payments (if the debtor wants to keep the automobile), alimony, child support, fines, traffic tickets, most student loans, most taxes, amounts owed because of malicious injury, drunk driving, criminal restitution, and certain debts owed creditors not listed in the Chapter 7 list of creditors filed with the court. The discharge order is usually entered approximately six months after filing the Chapter 7 petition. Debtors may receive a Chapter 7 discharge only once every eight (8) years. After discharge, a mortgage company can continue with foreclosure and sheriff's sale and an automobile lender can repossess an automobile if the car loan payments are delinquent. Chapter 7 is appropriate for debtors who either do not have mortgages, are current in their mortgage payments, are able to bring current their mortgage arrearage in the few months prior to Chapter 7 discharge, or for debtors who are unable to afford to keep their home.

A debtors reorganization plan, known as a Chapter 13 bankruptcy, is an alternative under the federal bankruptcy law to Chapter 7 bankruptcy. As with Chapter 7, the Chapter 13 petition stops mortgage foreclosure, sheriffs sale, utility shut-offs, and other creditor harassment. Chapter 13 also provides for monthly payments by debtors to a Chapter 13 trustee for three to five years. Out of these payments, the Chapter 13 trustee pays the following: mortgage arrearage, interest, late charges, court costs, and fees for the mortgage company's lawyer. Out of the plan payments, the Chapter 13 trustee also pays amounts owed prior to the filing the Chapter 13 for taxes, water/sewer liens, arrearage on second mortgages, and usually a small percentage of unsecured debt. Unsecured debt includes back medical and utility bills, credit card, store charge and loan balances for which there is not mortgage lien on the debtor's home. The trustee also pays the balance of any fees due the debtor's lawyer and applies a percentage (usually between 10%) of each plan payment, toward the cost of running his office.

During the Chapter 13 plan, debtors must make current mortgage and utility payments as well as payments on any second mortgage, home improvement or auto loan. A mortgage company can obtain relief from Chapter 13 and continue foreclosure if current mortgage payments are not made. A Chapter 13 bankrutpcy can be dismissed if payments to the trustee are missed. At the end of a Chapter 13 plan in which all trustee and mortgage payments have been made, the mortgage is reinstated and pre-bankruptcy unsecured debts are discharged. Chapter 7 or 13 bankruptcies will be dismissed if court hearings are missed.

To speak directly, one on one, with an experienced and knowledgeable Philadelphia Bankruptcy Lawyer, please contact the Dunne Law Offices at (215) 854-6342. We offer a free initial consultation for all consumer bankruptcy matters. The Dunne Law Offices, P.C. is a debt relief agency.
The Dunne Law Offices, P.C. helps people file for bankruptcy relief under the bankruptcy code.

Sunday, April 19, 2009


The bankruptcy laws provide an opportunity for a fresh start to those individuals whose financial difficulties have left them unable to pay their bills and have put them at risk of losing their house, cars, or other property. Bankruptcy is a complex area of the law, and requires the services of an attorney experienced and specialized in bankruptcy law to provide you with an in-depth analysis of your situation and to give you legal advice and representation you can trust to protect your assets and discharge your debts.

In the United States, the two most common forms of bankruptcy available to individuals and families are Chapter 7 bankruptcy and Chapter 13 bankruptcy.

Under a Chapter 7 bankruptcy, an individual completely eliminates all of their legal liability to pay unsecured debt, such as outstanding credit card bills, medical bills, unsecured personal loans, payday loans, judgments, etc. In return for eliminating the majority of your debt, some of your non-exempt property or possessions may be sold in order to help off-set some of your debt. Certain debt cannot be eliminated in Chapter 7 bankruptcy, such as child support, alimony/spousal support, student loans, damages for personal injury accidents or tax debt.

Under a Chapter 13 bankruptcy, an individual consolidates their debt and restructures it into an affordable monthly payment plan. Unlike Chapter 7 bankruptcy, Chapter 13 does not completely eliminate a debtor’s unsecured debt. Under Chapter 13 bankruptcy, you will still be required to repay a portion of or all of your debt. However, you pay off your debt in affordable monthly payments over a period of three to five years. The amount you pay every month will be determined by the court and in relation to your monthly income, current monthly expenses, and non-exempt assets, this way you are not required to pay back more than you can afford each month. Furthermore, you will most likely get to keep all of your assets and property throughout the bankruptcy process.

To speak directly, one on one, with an experienced and knowledgeable Philadelphia Bankruptcy Lawyer, please contact the Dunne Law Offices at (215) 854-6342. We offer a free initial consultation for all consumer bankruptcy matters.

The Dunne Law Offices, P.C. is a debt relief agency. The Dunne Law Offices, P.C. helps people file for bankruptcy relief under the bankruptcy code.