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Bryan P. Keenan

Pittsburgh Bankruptcy Legal Blog

Seek immediate legal assistance to stop mortgage foreclosure

One of the most common concerns for Pittsburgh residents who are experiencing financial trouble is losing their home. Being informed that a mortgage foreclosure is imminent or is already in progress can be a frightening experience. Fortunately, there are options for people who are confronted by this difficult reality. Before overreacting or panicking, it is wise to think about the legal remedies that are available to retain one's home. Calling for advice immediately is key to taking advantage of those alternatives.

The law in Pennsylvania says that people who fall behind on a mortgage can face foreclosure in as little as 60 days following a delinquency. The lender is also required to send two notices to the debtor about having missed mortgage payments. In those letters, there are listed ways to avoid foreclosure. In general, there will be between two and four months to pay what is owed to keep the property out of foreclosure. For those who do not pay what is owed, the lender will then seek a mortgage foreclosure. A complaint will be served that this is underway.

What is a Chapter 13 bankruptcy hardship discharge?

When a Pittsburgh resident is struggling financially and is considering Chapter 13 bankruptcy, it is important to get good information and professional advice. There are benefits to Chapter 13 that make it preferable to many debtors when assessed in comparison to Chapter 7. For example, a debtor who uses Chapter 13 can retain certain properties without fear of repossession or liquidation. There will be three or five-year plan to repay the debt by sending payments to a trustee who will in turn send them to creditors. These are the basics. Since situations often differ, there are other factors that should be understood.

Some debtors are confronted with challenges that prevent the completion of the plan. In these cases, it is possible to get a hardship discharge. Once the Chapter 13 bankruptcy plan has been confirmed, there are times when a situation will arise that stops the debtor from being able to complete the plan. If this occurs, the court might grant a hardship discharge at the debtor's request.

What should I know about the Chapter 7 bankruptcy means test?

For Pittsburghers who are facing overwhelming debt and do not have property they want to retain, a Chapter 7 bankruptcy liquidation is the easiest and fastest way to clear debt and get back on stronger financial footing. However, there are basic requirements when filing for Chapter 7. One is the means test. Understanding what the means test is and what steps must be taken is critical to a case.

The means test is used to determine if a debtor qualifies for Chapter 7. The bankruptcy court will first examine the debtor's monthly income for the six months prior to filing. This income will be compared to the state's median income for a family. If it is less than or equal to the median income, then the person can file for Chapter 7. If not, then the next option is to file for Chapter 13. All forms of income will be calculated, including wages, salary, bonuses, commissions, dividends, interest, child support, spousal support, unemployment, pensions, workers' compensation, annuities and more. Tax refunds, Social Security retirement, Social Security disability and Temporary Assistance for Needy Families are excluded.

What are strategies to handle credit card debt collectors?

With companies downsizing and more and more Pittsburgh residents facing diminished or even a complete loss of income, aggressive debt collection is a growing problem. People who are already overwhelmed and worried about how they will make ends meet will have these fears exacerbated by a debt collector calling constantly. Fortunately, there are strategies that a debtor can use to handle debt collectors. Understanding how to do this often requires legal advice.

Many debt collectors are simply doing their jobs, but, in some cases, they can become aggressive and use illegal tactics on consumers who are not aware of their rights. Debtors might be working as employees of a creditor or the debt could have been sold and a company is seeking to collect on its investment. Many people might believe that ignoring the calls is effective. This will not make the calls stop. A better way is to understand what the debt collector is legally allowed to do.

Bankruptcy and tax refunds can affect each other

During income tax refund season, people often make plans about how they want to use the money they will receive. If you are one of the individuals who has crushing debts and will get back a refund, there are some things that you need to think about before you do anything with your income tax refund.

One thing to remember is that if you are expecting a refund, you shouldn't file for bankruptcy until after you receive the money. If you file before, the money will likely be handed over to the trustee to help pay down the debts you owe. Instead, consider these options for using the tax refund.

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.

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Bryan P. Keenan & Associates, P.C.

993 Greentree Road
Suite 101
Pittsburgh, PA 15220

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