Wednesday, November 11, 2009

Is Chapter 7 Bankruptcy a Solution to Foreclosure?

Chapter 7 bankruptcy is used to delay foreclosure rather than block it permanently. Chapter 13 bankruptcy is used by homeowners to save their homes.
But even if you think you'll need to give up your house, Chapter 7 bankruptcy can be a very valuable tool in the midst of a foreclosure because you can delay the inevitable foreclosure by two to four months and get all or most of your debts permanently discharged so that you have have a fresh start after foreclosure.

When you file bankruptcy, the federal bankruptcy court issues a court order called a stay. The stay bars all creditors, including mortgage lenders, from taking any measures to collect a debt unless the court holds a hearing and grants permission.

Does it make sense to forgo the inevitable - the foreclosure? The answer really depends on your situation and cannot be simply be answered Yes/No. I don't recommend filing Chapter 7 bankruptcy simply to delay foreclosure but other attorneys may disagree with that opinion and take your money. Now, if you have a ton of unsecured debt (medical bills, credit card bills, lawsuits) I would suggest that Chapter 7 bankruptcy is an option in order to obtain a fresh start with our without a foreclosure pending.

The answer to filing bankruptcy can be found in a legal test created by Judge Learned Hand. He developed a test call the cost benefits analysis. You simply look at the cost of filing bankruptcy (downside) versus the benefits of filing bankruptcy (upside) and you arrive at a logical conclusion that filing bankruptcy is either more costly or more beneficial. Judge Learned Hand created this test as a logical tool to arrive at a logical answer. Try it sometime and you will discover the right solution in your situation.

Let me know if I can help you arrive at a solution!

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.

1500 JFK Boulevard, 
Two Penn Center,
Suite 200

Philadelphia, PA 19102

(215) 854 - 6342 office

(215) 205 - 6367 cell

(215) 569 - 0216 fax

dunnelawoffices@gmail.com

www.dunnelawoffices.com

Tuesday, November 10, 2009

How much money or property can I keep in a Chapter 7 Bankruptcy?

The following is a summary of the Bankruptcy exemptions, Section 522 of the Bankruptcy Code. Bankruptcy exemptions are laws that allow a client to proceed through bankruptcy and retain all the property/cash/jewelery which is exempted.

In plain english, a client can keep everything that is protected by the federal exemption laws.

Most Important Exemptions:

1. Up to $20,200 in equity in residence
2. Up to $1,075 in wild card exemption (used for anything)
3. Up to $3,225 in motor vehicle
4. Up to $10,775 in household goods
5. Up to $1,350 in jewelery
6. Up to $2,025 in tools of the trade
7. Up to $10,775 in cash value of life insurance

So, what exactly does all this mean? Well, a client can file bankruptcy and retain
$49,425 in equity, cash and property to help them begin their fresh start.
Not Bad. The federal law is very generous and helps people through tough times either due to unemployment, medical illness, or any other unanticipated life circumstance.

By the way, the federal exemptions also exempt $1,095,000 for each spouse's retirement plan. In case your wondering, the law specifically states that the client can exempt retirement funds to the extent they are in a fund or account that is exempt from taxation under sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code (”IRC”). These IRC sections practically encompass all retirement plans out there (pension plans, profit sharing plans, stock bonus plans, employee anuities, IRAs, Roth IRAs, government deferred compensation plans, plans of tax exempt orgainzations, and certain trusts). The amount they are exempt to are $1,095,000 for each spouse!

Please let me know if I can be of any help.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
1500 JFK Boulevard, 
Two Penn Center, Suite 200
Philadelphia, PA 19102
(215) 854 – 6342 office
(215) 205 – 6367 cell
(215) 569 – 0216 fax
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Can I file Bankruptcy Twice or Thrice?

Legally speaking, their is no limit on how many times you can file bankruptcy. The only limitation imposed is a time restriction.

Bankruptcy can be filed every two (2) years to eight (8) years depending on the circumstances of the case, which means the answer depends upon which bankruptcy the client filed in the past.

Allow me to explain with a helpful little graph:

Chapter 7 to Chapter 7 = 8 years
Chapter 7 to Chapter 13 = 4 years
Chapter 13 to Chapter 7 = 6 years
Chapter 13 to Chapter 13 = 2 years

A common mistake in counting the 8 years between the first Chapter 7 and the second Chapter 7 is when to start counting. The following example pertains anybody that has filed bankruptcy in the past and illustrates when to start the clock to determine if you can file today.

Allow me to provide an example so you can figure out for yourself whether you are eligible to file bankruptcy today.

A hypothetical client filed Chapter 7 bankruptcy on October 22, 2002. The client received a bankruptcy discharge on January 5, 2003. This client can file Chapter 7 bankruptcy again on October 23, 2010. The time to start counting is the date the case was filed with the court.

Please let me know if I can be of any help.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
1500 JFK Boulevard, 
Two Penn Center, Suite 200
Philadelphia, PA 19102
(215) 854 – 6342 office
(215) 205 – 6367 cell
(215) 569 – 0216 fax
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Sunday, November 1, 2009

LIVING WELL in PHILLY event (Philadelphia, PA)

Launching a LIVING WELL in PHILLY event. I will be writing LIVING WILL's for FREE tba. If you are interested in signing up for LIVING WELL in PHILLY - Send me an email!

Remember - Terri Schiavo - Don't let that be you. Ms. Schiavo had a cardiac arrest on February 25, 1990 which resulted in extensive brain damage and a diagnosis of persistent vegetative state (PVS). She was connected to a feeding tube on February 25, 1990 and disconnected by court order on March 18, 2005 - 15 years later. Ms. Schiavo did not have a living will.

Tell your loved ones what medical care that you would like if you are ever incapacitated by a stroke, accident or other calamity.

Please let me know if your interested in signing up for LIVING WELL in PHILLY.

Thank you.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.

1500 JFK Boulevard, 
Two Penn Center, Suite 200

Philadelphia, PA 19102

(215) 854 - 6342 office

(215) 205 - 6367 cell

(215) 569 - 0216 fax

dunnelawoffices@gmail.com

www.dunnelawoffices.com