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Bryan P. Keenan

Pittsburgh Bankruptcy Legal Blog

Medical costs a common reason for Chapter 7 bankruptcy

When Pittsburghers suffer an illness, condition or injury, their main concern should be getting the proper treatment and getting well. Whether that requires hospitalization, surgery, or ongoing care, finances should not factor in the equation. In practice, however, finances are a constant worry, and with good reason. People who need medical care can accrue massive medical costs. This is when bankruptcy may be a wise decision to get back on stronger financial footing.

A recent study discovered that two-thirds of bankruptcy filings were linked to medical issues. This is connected to both the cost of the medical care itself and the lost wages because of time missed from work. More than a half-million families each year decide bankruptcy is the preferable option to clear their medical costs. There were other reasons people filed for bankruptcy: an inability to pay a mortgage; not staying within their means; assisting others financially; student loans; and marital breakdowns. However, medical bills are by far the biggest problem for debtors.

What can debt collectors not do regarding credit card debt?

Pittsburghers who find themselves in overwhelming credit card debt they are unable to pay might be under the impression that they have put themselves in that position and they deserve whatever punishment they get. That can include simply accepting debt collectors calling at all hours and harassing them. However, simply being in credit card debt does not mean that a person should be subjected to abuse and face legal violations. Understanding what debt collectors are not allowed to do regarding a debt based on the Fair Debt Collection Practices Act when communicating with the debtor is imperative to put a stop to the behavior and a legal professional experienced in helping people with their debt problems is key to this.

The debt collector cannot communicate with a debtor at unusual times or places where it is known to be inconvenient. Unless there is knowledge otherwise, that means the collector should function under the assumption that there should be no calling before 8 a.m. and after 9 p.m. where the debtor is located. If the debt collector is aware the debtor has legal representation and knows how to get in contact with that legal representative, the legal representative should be called instead of the debtor unless there has been a reasonable and unsuccessful attempt to contact the attorney. The debt collector cannot call the debtor at his or her place of employment if it is known such calls are prohibited from the employer.

What is the role of the trustee in a Chapter 13 bankruptcy?

For Pittsburgh residents who are considered wage-earners and have property that they would like to retain but are in heavy debt with no viable alternatives to pay it, Chapter 13 bankruptcy may be a useful option to get back on stronger financial footing. There are many aspects of a Chapter 13 filing that should be gauged before moving forward with it. One that is not overtly problematic, but should be understood is the role of the Chapter 13 trustee. The trustee is integral to the success of the filing and cannot be ignored.

In general, the trustee oversees the bankruptcy. Whereas a Chapter 7 bankruptcy -- also referred to as a liquidation bankruptcy -- requires that property with any value the debtor has will be sold to pay back creditors, a Chapter 13 is a reorganization bankruptcy that allows the debtor to retain such properties. That can include a car or a home. With that, the trustee will essentially be tasked with receiving the monthly payments from the debtor over the three or five years for which the payment plan lasts and then distributing these funds to the creditors.

Bankruptcy can help Pittsburghers with IRS tax debt

With the dawn of a new year, celebrations quickly recede into the past and everyday concerns for the present and future rise again. Part of that is inevitable worry about tax time in April. For some Pittsburghers, this is based on being behind in tax payments. Those who are confronted with IRS tax debt could think about the potential penalties they will face if they do not pay, but are also thinking about not having the funds to clear that debt.

Often, people will avoid the thought of bankruptcy thinking negatively about it without truly understanding how it can benefit them in their situation. It is in these cases where a legal professional experienced in bankruptcy cases can help. It is possible to discharge tax debts by filing for bankruptcy. This can be done with Chapter 7 or Chapter 13 filings. It is vital to remember that there are different criteria with Chapter 7 and Chapter 13 and IRS tax debt. Debtors should also remember that certain debts such as secured liabilities and tax liens cannot be discharged.

Little purchases on credit can add up to big debt over time

Most people facing significant debt accumulate it over time. There are individuals who have some kind of catastrophic event, such as a car crash, that directly leads to financial duress. For most other people, debt is a slow trickle that eventually builds into a unstoppable deluge.

Debt is quite common among most American households, even when there is more than one wage earner in the house. All you have to do is spend a little bit more than you make every month to find yourself underwater in debt eventually.

Does reaffirming let me keep property in Chapter 7 bankruptcy?

Pittsburgh residents who have found themselves facing financial struggles that they cannot handle and see no other alternative will consider Chapter 7 bankruptcy. For many, this is a wise decision so they can restart their financial lives and move on without the endless worry and creditor harassment they were confronted with at the apex of the situation. However, when deciding to file for Chapter 7, it is important to understand that the entire process is based on liquidation of any property that is of value after which the debtor will no longer be responsible for the various debts. If there are properties that the person wants to retain, it is possible to do so by reaffirming it and paying it.

When reaffirming a debt, the debtor comes to an agreement with the creditor that the debtor will still be liable and pay some or all of what is owed for the item. This is usually a debt that would be discharged with the property surrendered. It can be a home, a motor vehicle and other pieces of property. The creditor agrees not to repossess the property provided the debtor makes the payments. When reaffirming a debt, it is vital to do so before there is a discharge.

Why credit scores matter in retirement

There are many myths out there about retirement. One is that once a person is in retirement and in his or her later years, his or her credit score stops being impactful.

On the contrary, the reality is that there is no age at which credit score suddenly becomes completely unimportant. There are many ways that this score can have major impacts on the lives of retirees.

6 important points to know about filing for bankruptcy

Many factors can lead to a person needing to file for bankruptcy. No matter what brought you to the point of considering this action, several key points can help you determine whether you should file your petition.

In some instances, there are other options that might work to get you out of this tough financial spot.

Are you concerned about these Chapter 7 bankruptcy drawbacks?

If you are considering filing for Chapter 7 bankruptcy, you'll want to compare the pros and cons before pushing forward. Only then will you feel 100 percent confident in your decision and comfortable with what's to come in the near future.

It's natural to be concerned about potential Chapter 7 bankruptcy drawbacks. Fortunately, once you learn more about these, you may find that they don't have nearly as big of an impact on your financial future as you thought.

Know the red flags of debt negotiation programs

If you are saddled with burdensome debt, the promises of a debt negotiation program may sound all too appealing. Don't be fooled, though: Debt negotiation programs are usually risky ventures that can significantly harm your credit. In some cases, they can even increase your debt.

A debt negotiation program, or a DNP, is an organization that claims to help its clients get rid of debt. They often market themselves as fast, easy ways to completely get rid of your debts. DNPs use this rhetoric to prey on debt-ridden consumers who are vulnerable and desperate for quick solutions. In order to avoid these potentially harmful programs, it is important to recognize their warning signs.

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Bryan P. Keenan & Associates, P.C.

993 Greentree Road
Suite 101
Pittsburgh, PA 15220

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