There is no doubt that a person files for bankruptcy when they are not in the best financial position.  Accordingly, a question that we are asked daily is “How much are bankruptcy fees.”  First, the court filing fees including credit counseling, debtor education and a credit report total about $400.00 for a Chapter 13 and Chapter 7 Bankruptcy.  In addition is the bankruptcy attorney fees.  The attorney fees at Sadek Law Offices, LLC cover fielding all creditor phone calls and written correspondence, assistance in gathering necessary documentation, answering all client bankruptcy related questions, preparation of the Bankruptcy Petition, attendance at a 341 Meeting and for a Chapter 13 Bankruptcy, representation throughout the confirmation process and hearing.  For the most simple Chapter 7 Bankruptcy cases, our law office charges a minimum of $1,250.00.  For a Chapter 13 Bankruptcy the fees are standardized by the United States Bankruptcy Court at $3,000.00 or $3,500.00, depending on the client’s income level.  However, our office generally requires half of the Chapter 13 fees up front.  To determine a fair and accurate attorney fee an initial in-office consultation is necessary.  At the initial consultation it is first determined whether a bankruptcy filing is most beneficial to the individual facing a financial hardship and thereafter which Chapter of Bankruptcy is the best fit for the client.  The complexity and amount of debt one is due and owing will assist in determining a more precise legal fee.  For an exact price on a bankruptcy filing and a payment plan to help make it affordable, you may contact our law office to schedule a FREE initial consultation.

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

 

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Chapter 13 Bankruptcy filers generally have to pay a regular monthly
payment to the Chapter 13 Trustee. The subject monthly payment is determined by the amount necessary to cure mortgage arrears over a period of up to 5 years or disposable monthly income, in the event any exists. The Bankruptcy Code strictly regulates for the distribution of payments in a Chapter 13 Bankruptcy. Priority debts, including administrative expenses, family support obligations (child support and alimony), and recent tax obligations must be paid in full. However, there is no requirement that under the plan that unsecured debts such as credit cards, medical bills, personal loans, payday loans and utilities need to be paid any amount in a Chapter 13 Plan. In the Eastern District of Pennsylvania, sometimes a Chapter 13 Debtor may reduce their unsecured debts to zero percent repayment through through a Chapter 13 Plan. The reduced unsecured payment can save a Chapter 13 filer a tremendous amount of money in interest, fees, costs and penalties all associated with unsecured debts. Each individual or family’s situation is different, however if you are considering filing a Chapter 13 filing, our office a free initial consultation with a lawyer who can analyze your situation and how a Chapter 13 repayment PLan can be beneficial to you.

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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On or about January 17, 2012, Sadek Law Office filed an adversary proceeding against a major mortgage servicer for among other things, stripping a wholly unsecured junior mortgage lien. The subject real property at issue was valued less than the first mortgage amount of $180,000.00 thereby deeming the second mortgage lien as “wholly unsecured.” Through an adversary proceeding to determine secured status filed in The United States Bankruptcy Court for the Eastern District of Pennsylvania it was determined that the the $48,440.42 second mortgage balance shall be paid only as an unsecured creditor through the Chapter 13 Plan. The delighted homeowners now owe significantly less on their real property and have reduced their monthly payments accordingly.

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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As the year 2011 comes to an end I, Brad J. Sadek, managing attorney, would like to extend thanks to our staff of attorneys and paralegals for another successful year.  Further, I would like to extend my gratitude to our clients whom we get the pleasure of providing legal assistance to.  As we enter our seventh year of practicing as Sadek Law Offices, LLC we look forward to practicing in Bankruptcy Law, Family Law, Real Estate Law and adding a Social Security Disability Law practice to best serve our clients needs.

Over the past year our practice has expanded by adding branch offices in Northeast Philadelphia and Allentown, Pennsylvania. By adding branch offices, we have expanded the geographic scope of our law practice while adding convenience to clients throughout the Eastern District of Pennsylvania.  From our branch offices we are able to meet with clients and perform the high degree of legal service that our clients deserve.

Lastly, in early 2011 we will be updating our website in effort to stay on the forefront of technology.  Although law does not change at a rapid pace, our small law firm is able to quickly adapt to the legal needs of our clients.  I can assure our readers and clients that the one thing that will never change is the commitment to providing excellent legal services.

In conclusion, I wish everyone a healthy and happy new year in 2012.

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Pennsylvania law only permits wage garnishment in very limited circumstances.  Under Pennsylvania law, an employee’s wages, salaries and commissions may be taken (garnished) to satisfy the following types of debts due and owing:

1. Judgments for child or spousal support,

2. Obligations relating to a final distribution in divorce,

3. Back rent on a residential lease,

4. PHEAA Student Loans,

5. Restitution for criminal matters, and

6. Certain Taxes.

Although there are only limited circumstances where a creditor may garnish wages, in Pennsylvania a judgment creditor may seek to garnish money in your bank account.  Meaning if one owes a credit card a judgment in the amount of $3,000.00 and has $1,000.00 deposited from their employer in the form of wages, the entire deposit may be subject to garnishment.  If one is facing a possible lawsuit or bank account garnishment in Pennsylvania it is important that they seek the advice of a lawyer

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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A Chapter 13 bankruptcy, as previously discussed in blogs and on theprimary website, www.sadeklaw.com, is a repayment plan in bankruptcy.  The repayment plan is the most distinguishing characteristic of a Chapter 13 Bankruptcy Proceeding.  The repayment plan, generally, rather than being based on what is due and owing, with respect to unsecured debts, is based on affordability on an ongoing monthly basis.  There are several reasons why a person or married couple may file a Chapter 13 Bankruptcy, however, in my Pennsylvania Bankruptcy law firm, I see three most common situations.
1. Stay Foreclosure Foreclosure or Tax Sale of Real Property,
2. Repayment of debt based on non-exempt equity in real or personal property and
3. Repayment of Debt based on means testing disposable income.
A Chapter 13 Bankruptcy may be filed to stay mortgage foreclosure or tax sale up until the time the sheriff sale takes place.  In Chapter 13 bankruptcy an individual or a married couple would repay all mortgage arrears and/or tax deficiencies due and owing over a period of three to five years, depending on monthly disposable income.  The filing of a Chapter 13 Bankruptcy, by virtue of the automatic stay imputed under Section 362 of the US Bankruptcy Code, stays the foreclosure or tax sale.  Moreover, unsecured debt, including but not limited to credit cards, personal loans, utilities, judgments and medical bills are paid back based on affordability.  Sometimes Petitioners in Chapter 13 Bankruptcy pay nothing back to unsecured creditors.
The current federal exemption for equity in real property is $21,625.00, per person on the deed.  Meaning a couple whether filing jointly or not has a combined exemption of $43,250.00 for their personal residence.  For example, a couple with a mortgage of $100,000.00 and a house worth $143,250.00, would be deemed to have no non-exempt equity in their primary residence.  However, if the value of the house was higher, then the individual or couple would pay debts back only up to the non exempt equity in the subject primary residence.
Lastly, Chapter 13 Bankruptcy is supposed to be based on the Debtors’ best efforts to repay.  Accordingly, there are means testing figures, updated annually for inflation.  Such figures consider family size and reasonable and necessary expenses to determine, what amount, if anything needs to be paid towards debt on a regular and monthly basis through Chapter 13 Bankruptcy.  The lawyers at Sadek Law Offices are well versed in Pennsylvania means testing and will give an honest legal opinion regarding required payments and savings in Chapter 13 Bankruptcy.

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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On November 10, 2011, new median income standards for Pennsylvania were released.  These figures are important because if the household income, based on family size is lower than the median income, there is no presumption of abuse in a Chapter 7 Bankruptcy.  Further, depending on the situation a Petitioner may be eligible for a three year plan in Chapter 13 Bankruptcy.  Although the following median income standards are very important there are numerous other factors needed to determine whether an individual or marries couple qualifies for bankruptcy protection, and if so, what Chapter of the Bankruptcy Code would be most beneficial. 

Pennsylvania Median Incomes:

One person Household Median Income: $45,092

Two Person Household: $53,091

Three Person Household: $66,487

Four Person Household: $76,682

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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Generally, a Judgment creditor is able to freeze a bank account and collect funds up to the amount of the judgment debt.  However, funds derived from certain sources, such as Social Security Disability, Social Security Income and Veterans Benefits are exempt from collection by Judgment Creditors.  Now, the onus is on the bank to determine the sourse of the funds and determine whether the funds are exempt from collection.  This saves the account holder the hassle and time of objecting to the collection of the subject funds.  The protection of the Federal Benefits is contingent upon having the funds electronically deposited and the funds must be deposited within the past two months to be exempt from collection.  For more information on protecting your income, please contact Sadek Law Offices, LLC at 215-545-0008. 

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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A hardship discharge in bankruptcy is governed by 11 USC Section 1328(b).  A hardship discharge comes into play after a Chapter 13 bankruptcy plan has already been confirmed by the Bankruptcy Court and at some point during the course of the repayment plan the Debtor or Debtors face an unforeseen unfortunate circumstance.  A job loss or health problem are the most prevalent reasons for petitioning the Bankruptcy Court for a hardship discharge in bankruptcy.  In order to receive a hardship discharge the following elements must be met:

1. The Debtors(s) has experienced a circumstance beyond his or her control that makes it impossible to continue to make Chapter 13 payments,

2. The payments made into the plan are at least the total amount that the creditors would have received through a Chapter 7 Bankruptcy, and

3. It is not feasible to otherwise modify and continue paying towards the confirmed Chapter 13 payment plan. 

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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Section 506 of the US Bankruptcy Code allows for certain secured debts to be altered based on the value of the underlying collateral. This is referred to as “cramming down” or “stripping off” a secured loan. An example of using 506 to “cram down” a loan would be where the debtor has a car they purchased for $15,000.00. However, at the time of filing, the fair market value of the car is only $10,000.00. They still owe $12,000.00 on the car. Under the 506 cram down, the secured part of the debt is only $10,000.00 and the rest is treated as unsecured in the Chapter 13 plan. For a car, this can only be done on vehicles purchased more than 910 days (about 2.5 years) prior to the bankruptcy petition is filed. On other secured items, there is no such limitation with the exception of real property.

There no longer is an ability to “cram down” a debt voluntarily secured against your home. This is where “lien stripping” comes into play. If your home is now only worth $150,000.00 and your first mortgaged loan payoff is $155,000.00, then any other debt secured against the house is considered to be wholly “under water”. So if there is a second mortgage such as a home equity line of credit, that is completely “under water” in terms of equity in you home, then under 506 it can be treated as wholly unsecured through the plan.

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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