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Bryan P. Keenan

Pittsburgh Bankruptcy Legal Blog

Difficulty saving money could be a sign of future debt problems

The holiday season often leads to financial difficulty, particularly for families that already have a relatively tight budget. Many people feel obligated to travel to visit family members in November for Thanksgiving and in December for Christmas. It isn't hard to imagine how all of that travel could destroy someone's budget.

Even if you don't have to travel far to visit loved ones, you will likely still need to purchase gifts, which can often mean assuming credit card debt for several months. As if that weren't difficult enough, if you host the holiday gathering, you will also have to provide refreshments and lodging for your family out of town.

Medical expenses and credit card debt are a troubling combination

Pittsburgh residents can find themselves facing overwhelming debt for many reasons. Two of the most common are medical expenses and credit card debt. Individually, these are worrisome. When people use credit cards to pay for medical care, they can quickly run up massive bills with few ways to get out of debt. When dealing with this stressful situation, having legal advice from a law firm experienced in helping people with medical and credit card debt might be beneficial.

A recent survey from CompareCards indicates that one-third of consumers who have credit card debt have accrued a balance by paying for medical expenses. Even more troubling, nearly 10% of people who paid for medical costs using a credit card have amassed at least $10,000 in debt. Considering the interest rates on credit cards, even for those with good credit, it will take significant time to pay off that debt.

Should I worry about a Chapter 7 bankruptcy discharge revocation?

Pittsburgh residents who file for Chapter 7 bankruptcy do so under the belief that their debts will be cleared after the process is completed. Once they have followed all the requirements of a Chapter 7 liquidation, they have a reasonable belief that they can move forward. Still, there are concerns that debtors might have even after they have completed their filing. One concern is that the Chapter 7 approval might be revoked.

Understanding the circumstances under which the discharge can be revoked is useful if there is an attempt on the part of the bankruptcy trustee to do so. The trustee or a creditor can ask that the court revoke the discharge if it was obtained through fraudulent means. For example, if the person did not inform the court of property that would have been subject to liquidation had the court been aware of it, the discharge could be revoked.

Survey shows young people continue to have problems with debt

Many people in various age groups are experiencing problems with credit card debt for a variety of reasons. Frequently mentioned in these discussions are millennials. While these individuals need help getting on stronger financial ground, the strategies used to achieve this goal are universal, regardless of the circumstances. Legal advice can be beneficial to clear debt.

In a recent survey, 51.5% of people who took part stated that they had credit card debt. Of the participants, 54% told the researchers they owed less than $5,000 in credit card debt. The rest owed more than $5,000, with 9% owing between $10,000 and $20,000; 4.5% owing $20,000 to $30,000; and 4.5% owing over $30,000.

Personal bankruptcy and its impact on credit scores

Regardless of the level of debt a Pittsburgh resident has, one of the main obstacles to moving forward with personal bankruptcy is concern about how it will damage credit. This is true whether it is a Chapter 7 bankruptcy in which there is a liquidation of the person's assets; or a Chapter 13 bankruptcy where a payment plan is initiated and the person makes reasonable payments that he or she can afford, generally over a five-year period.

This is an understandable worry and it is important to think about how the credit reports will be affected. Often, people find that the positives of a bankruptcy far outweigh the negatives such as credit issues.

Questions to ask when calling an attorney for bankruptcy help

You've finally come to the realization that bankruptcy may be the only way to escape your debt and live a better financial life in the future. While it's a stressful time, taking the right steps at the right time will help ease the tension and put you on the right path to success.

While you have the legal right to file for bankruptcy on your own, it's typically best to consult with an experienced attorney. Here are some of the many questions to ask when discussing your situation with a bankruptcy attorney for the first time:

  • Does it make sense for me to file for bankruptcy? You've done your research, but you still don't know everything about bankruptcy law. Your attorney can review the basics of your situation, and then provide feedback on whether Chapter 7 or Chapter 13 makes sense at the present time.
  • What type of bankruptcy is the right choice? There are many differences between Chapter 7 and Chapter 13 bankruptcy. For example, you can discharge some or all of your debt in Chapter 7, thus giving you a fresh start. But with Chapter 13 bankruptcy, you're required to use a repayment plan to pay back some of the money you owe.
  • How long does bankruptcy take? This depends on a variety of factors, including the type of bankruptcy. Chapter 7 bankruptcy is the quicker of the two, with the process typically coming to an end within six months. With Chapter 13 bankruptcy, you can expect your repayment plan to last three to five years.
  • What's the best way to prepare for bankruptcy? There are things you should and shouldn't do as you close in on bankruptcy. It's critical to collect all necessary financial records, such as tax returns, pay stubs and bank account statements. At the same time, you want to avoid things such as gifting assets in an attempt to hide them from the court.

Credit card debt is a growing concern for younger adults

In Pennsylvania and across the United States, credit card debt, student loans and other financial concerns are gaining greater attention. People are seeking strategies to get back on stronger financial ground as researchers examine the cause and effect of these financial factors. While recent studies and stories have centered on millennials and their debt woes, Generation Z was found to have problems of its own despite being a few years behind their older counterparts. Regardless of the age range of the debtor, credit card debt is a worrying problem and legal assistance might be useful to get it under control.

As millennials owe nearly $28,000 in debt, Gen Z -- whose maximum age is 22 -- are in debt for just shy of $15,000. The study was conducted by Northwestern Mutual. An advisor for the company states that this is now a normal part of life. People who complete their schooling and have yet to begin work are already in debt. This is a radical change from three decades ago.

Chapter 7 bankruptcy might be preferable to other debt solutions

When a person is dealing with significant debt in Pittsburgh, they might feel a reluctance to consider personal bankruptcy. Television, the internet and other media entities have many advertisements that extol the virtues of alternatives to bankruptcy, while claiming that bankruptcy will be a negative. It is important to understand the truth about Chapter 13 bankruptcy and Chapter 7 bankruptcy before turning to ideas that can do little more than make the financial problems worse.

Many companies will push debt consolidation. With this strategy, the person's financial obligations will be packaged into a single loan. There will be a monthly payment, and it is perceived to be a lower amount than what the person is otherwise paying. Credit counseling services will assist the debtor in a reorganization of the financial situation with a plan to pay the debts without needing to go through bankruptcy. Some will suggest the person get additional loans to pay off what is owed and steer clear of bankruptcy. Examples include borrowing money on the equity of a home, borrowing against assets or getting a second mortgage.

Getting back on track after Chapter 7 bankruptcy

For those in Pittsburgh who are experiencing financial trouble and are considering bankruptcy, their concerns go beyond the process of bankruptcy itself. Their worries extend to what happens after they have filed. This is true whether it is a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. When considering how to get back into a better financial situation after the bankruptcy filing has been completed and approved by the court, it is wise to know the fundamental ways to rebound.

It is not uncommon for people who have filed for bankruptcy to experience improved credit relatively quickly -- within a year or two. To make sure things are progressing, it is important to keep up to date on credit by paying attention to the credit report. If there are issues or inaccuracies, they can be addressed. Often, people will try to expedite their credit improvement by using one of the frequently advertised credit repair companies. These will come in droves after the filing. Some are legitimate, but many are simply seeking money and do not do anything to help the debtor.

Can filing for bankruptcy help me with my IRS tax debt?

The Internal Revenue Service (IRS) can spark fear in a person just by sending a letter or making any type of contact about IRS tax debt. Pittsburgh residents who are dealing with this issue and are told they owe payments on their taxes will be worried about what the future holds. This is compounded if they are already having financial problems and cannot make their payments for credit cards, mortgages, automobiles and more. Fortunately, bankruptcy can help with tax debt.

The circumstances must be right for this to be done and it is not always possible, but when there are concerns about this problem, legal advice is essential. Generally, it is easier to discharge tax debt with a liquidation bankruptcy through Chapter 7.

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Bryan P. Keenan & Associates, P.C.

993 Greentree Road
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Pittsburgh, PA 15220

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