Why Do People File Bankruptcy?
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At Sadek Bankruptcy Law Offices, we realize that every situation is different. Our debt relief lawyers will take the time to learn about your situation and your goals. Our objective is to explain your legal options and offer the best debt relief strategy for you in the most compassionate and friendly manner possible. Call 24/7 to schedule your meeting with a lawyer.
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Our office understands the financial stress our clients endure. Therefore, in addition to reasonable legal fees, we offer a payment plan to all of our valued clients to make quality legal services most affordable.
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In addition to our primary law office in Center City, Philadelphia, we also have law offices throughout the Greater Philadelphia, Pennsylvania Area and in New Jersey. Our branch offices have contributed to making us the #1 Bankruptcy Filer and debt relief firm in the Greater Philadelphia area. Our goal is to have a convenient location within 20 minutes of where our clients work or reside.
Why File Bankruptcy in Pennsylvania and New Jersey?
Many view bankruptcy as a drastic measure to be avoided at all costs. However, if bankruptcy is as bad as some people make it seem, then why do people file bankruptcy at all? The lawyers at Sadek Bankruptcy Law Offices aim to help clients like you understand complex bankruptcy matters, including why you might file for bankruptcy.
Bankruptcy is a major financial decision, so it’s wise to consider the consequences carefully. However, many of the fears people have about bankruptcy are based on inaccurate or misleading information. There are many valid reasons to file bankruptcy, including financial benefits and more.
To learn more about bankruptcy services near you, call our NJ and PA bankruptcy lawyers today. Schedule a free consultation by calling our Pennsylvania office at (215) 545-0008 or our New Jersey office at (856) 890-9003.
How Can Filing for Bankruptcy Help Me?
Bankruptcy is a legal process that aids debtors in repaying their creditors. Most commonly, bankruptcy provides assistance through restructuring payment plans or by liquidating assets. There are many reasons to file bankruptcy, including financial benefits, protections offered by the U.S. Bankruptcy Code, and reducing debt-related stress.
- Get Stress Relief
The uncertainty and instability of living with financial hardship can cause significant stress. You might worry about losing your house, your transportation, or being able to provide for yourself and your family. Prolonged stress may impact your mental and physical health, making an already difficult situation even harder. Bankruptcy can release you from the burden of financial struggle. Furthermore, the protections offered through the bankruptcy process can allow you to address your financial situation without the additional stress caused by creditor harassment or collections.
- Reduce or Erase Your Debts
Bankruptcy can help you significantly reduce your debts. Both Chapter 7 and Chapter 13 bankruptcy provide debtors with the means to pay creditors while under the protection of the U.S. Bankruptcy Code. Once your case closes, you’ll likely owe considerably less than before.
- Stop Debt Collectors
Bankruptcy can provide immediate relief to those dealing with aggressive debt collectors. As soon as you file your petition, the bankruptcy court will issue an order called an automatic stay. The automatic stay is one of the legal protections debtors are afforded when filing bankruptcy in PA and NJ. It requires all debt collectors, including both secured and unsecured creditors, to immediately cease any debt collection activities. Additionally, creditors may not continue to contact their debtors while the automatic stay is in place.
The automatic stay can be particularly useful for debtors facing creditor harassment or debtors who want to protect their property. If you need help understanding the automatic stay and how it can benefit you, contact the Sadek legal team today.
- Stop Utilities From Being Shut Off
If you have fallen behind on paying your utility bills, you may be interested to learn how bankruptcy affects utility bills in Philadelphia, PA, and New Jersey. The automatic stay that stops creditors from continuing to collect on debts can also temporarily prevent your utilities from being shut off. Additionally, bankruptcy can benefit you in the long term by either helping you pay off what you owe or discharging your utility debts entirely.
- Prevent Home Foreclosure
A perhaps lesser-known benefit of the bankruptcy filing process is how bankruptcy can save your house. In addition to ceasing other forms of debt collection, an automatic stay will immediately stop home foreclosures. By filing a Chapter 13 bankruptcy case, you can continue to make payments towards your mortgage while under the protection of the automatic stay. By the time your case closes, you may have paid enough to avoid losing your home. Debtors can also include a portion of their home’s worth as exempt property during a Chapter 7 bankruptcy case.
- Build Better Credit
It is important to note that bankruptcy, like most forms of debt relief, can have an initial negative impact on your credit report. Both Chapter 7 and Chapter 13 bankruptcy remain on your credit history for several years. However, the long-term benefits of bankruptcy may outweigh that initial impact, especially if significant debts and missed payments have already lowered your credit score. Once you get your financial affairs in order through bankruptcy, you will have a chance to rebuild your credit. To learn more about rebuilding your credit following a bankruptcy in Philadelphia, call the bankruptcy attorneys at Sadek Bankruptcy Law Offices.
- Protect Your Property
By simply filing for bankruptcy, you can protect your property from creditors. The automatic stay temporarily halts all debt collection, including the collection of property. Bankruptcy also provides further property protections depending on the type of bankruptcy you file. For example, Chapter 13 bankruptcy allows debtors to repay creditors without losing their property. Although Chapter 7 bankruptcy requires the liquidation of nonexempt property, the U.S. Bankruptcy Code allows debtors to keep certain types of property.
Bankruptcy can also allow you to protect personal property that is being held as collateral for a secured debt. Debtors can sign a reaffirmation agreement with their secured creditors that ensures they will continue to pay on a certain debt rather than seek to have it discharged through bankruptcy. As long as the debtor continues to pay, the creditor will not seize the secured property.
Why would you want to reaffirm a debt? Reaffirmation agreements often involve essential property that, if lost, would be costly or difficult to replace. For example, you may enter a reaffirmation agreement to protect your motor vehicle.
Why Choose Bankruptcy Over Other Debt Relief Alternatives?
While other forms of debt relief might seem appealing, it is important to educate yourself on how these alternatives work before committing to any plan. Sadek Law’s bankruptcy lawyers aim to help clients make informed decisions and to avoid the worst of the negative consequences associated with debt relief.
Bankruptcy vs. a Debt Management Plan
Many nonprofit credit counseling agencies use debt management plans to help debtors seek financial relief. This is done in a way that’s similar to debt consolidation. Debt management plans allow consumers to merge all of their applicable debts into one structured plan. This allows debtors to make one monthly payment towards all their debts rather than keep track of multiple repayment plans.
While these companies can provide useful services for some, debt management plans are often not the most effective way to repay debts. In fact, you may wind up paying more than you originally owed. Additionally, creditors have no legal obligation to agree to the terms offered by credit counselor companies.
Creditors are, however, legally bound to the terms given by a bankruptcy court and must adhere to the protections offered by bankruptcy, such as the automatic stay. Before you agree to any debt management plan, speak with Sadek Law’s NJ and PA debt consolidation attorneys. Our team will help you understand the pros and cons of debt management, bankruptcy, and more.
Bankruptcy vs. Debt Relief
In your search for financial assistance, you may have learned about debt relief companies such as National Debt Relief, Freedom Debt Relief, and Accredited Debt Relief. These businesses offer to help clients negotiate with their creditors for debt settlement. A successful debt settlement can allow you to settle debts for less than you owe.
However, these companies cannot always secure an agreement from creditors to settle a debt. Creditors do not have to agree to settlement plans. Debt relief companies sometimes charge substantial nonrefundable fees for their services. If the company cannot settle your debts, you will have spent money that could have benefited you more elsewhere. Additionally, debt settlement may hurt your credit report.
Bankruptcy, on the other hand, offers debtors more security than debt relief companies. Federal law requires creditors to follow the bankruptcy process and obey the automatic stay. When bankruptcy discharges debts, you are no longer legally obligated to pay those debts.
Consult with Sadek’s debt settlement lawyers in Pennsylvania and New Jersey to learn more about debt settlement. In addition to helping clients through the bankruptcy process, our team offers assistance to those who were not satisfied with the services of debt relief companies. These include National Debt Relief, Freedom Debt Relief, Accredited Debt Relief, Beyond Finance, and more.
Bankruptcy vs. Loan Modification
Loan modification occurs when a lender agrees to change the terms of an existing loan. The goal of loan modification is to make payments more affordable. Modifications may involve lowering the interest rate or reducing the principal balance. Alternatively, the lender may agree to extend the loan term, allowing the debtor more time to pay.
Those struggling with mortgage payments sometimes seek loan modifications to avoid foreclosure on their homes. However, while modifications may make things easier in the short term, they could hurt you in the long term. For example, the trade-off for lower monthly mortgage payments is usually an extended loan term. You pay less each month, but the total amount you pay over the life of the loan increases.
Loan modification is not the only way to save your house from foreclosure. Bankruptcy provides multiple means to protect debtors’ property from repossession and foreclosure. You can give yourself more time to pay on your mortgage through a Chapter 13 bankruptcy repayment plan. Alternatively, you may be able to include your home as exempt property in a Chapter 7 bankruptcy case. The New Jersey and Pennsylvania mortgage loan modification attorneys at Sadek Law can walk you through the benefits and drawbacks of loan modification.
To learn more about the advantages of filing bankruptcy, and whether Chapter 13 or Chapter 7 could be the right solution for you, call Sadek Bankruptcy Law Offices at (215)-545-0008 for a free legal consultation. We will keep your information confidential.
How to File Bankruptcy in PA or NJ
The first step to filing bankruptcy is to evaluate your financial affairs. You should consider not only your debts, but also your income, assets, and expenses. It is highly recommended to consult with a financial advisor or an experienced bankruptcy attorney before filing. These professionals can help you determine if bankruptcy is the right choice for you and which type of bankruptcy is best suited to your circumstances.
To file for bankruptcy, you must meet various requirements. Prior to filing Chapter 7 bankruptcy, you should complete the Chapter 7 means test. This test assesses your disposable income to determine if you qualify for Chapter 7. Those who do not qualify may still file Chapter 13 bankruptcy. Before filing either Chapter 7 or Chapter 13, debtors must complete a required credit counseling course.
Once you meet the prerequisites, you can submit your petition to a United States Bankruptcy Court. The petition includes multiple detailed forms that inform the court of your financial situation. You must also pay a filing fee to submit your petition.
If the court accepts your case, you will need to attend a meeting of creditors to answer questions about your finances. Debtors must also complete a debtor education course. This course aims to help debtors avoid future financial hardship by offering lessons in debt management, budgeting, and saving.
How Our Philadelphia Bankruptcy Attorneys Can Help
Filing bankruptcy can be a complicated procedure, so it’s important to make sure you have legal help from a qualified bankruptcy attorney. At Sadek Bankruptcy Law Offices, our trusted team of attorneys has many years of experience handling thousands of bankruptcy cases. Specifically, we help clients interested in filing Chapter 7 bankruptcy and Chapter 13 bankruptcy.
We at Sadek Law offer crucial insight into bankruptcy proceedings and provide support to our clients through every step of the process. Our NJ & PA bankruptcy lawyers fill out complicated paperwork on your behalf, ensuring that all the details are correct to avoid costly delays. Our team can assist clients taking the Chapter 7 means test and help them find approved credit counseling and debtor educator courses. We’ll represent you during your meeting with the creditors and through proceedings in federal courts.
Whether you are filing jointly as a married couple, individually, or as a business, you can rely on us. Our team’s familiarity with United States courts, local bankruptcy judges, and the United States Bankruptcy Code has prepared us to build strong bankruptcy cases and achieve favorable results for our clients.
Chapter 7 Bankruptcy and Chapter 7 Business Bankruptcy in NJ & PA
Chapter 7 bankruptcy allows debtors to start with a clean slate after discharging debts. A court-appointed bankruptcy trustee liquidates, or sells, non-exempt assets and uses the proceeds to pay off creditors. After liquidation, the bankruptcy court discharges any remaining qualifying debts. However, not all debts qualify for bankruptcy discharge.
Typically, debts discharged by bankruptcy include unsecured debts such as credit card debt, medical bills, and personal loans. Chapter 7 cannot discharge child support, alimony, or recent tax debts. Additionally, bankruptcy will not discharge criminal fines and penalties. For example, if you owe debts for personal injury caused by drunk driving or because you caused willful and malicious injury to another, you will continue to pay those debts even after bankruptcy discharge.
Bankruptcy matters are often not completely straightforward. That’s why it’s important to consult with Pennsylvania and New Jersey Chapter 7 bankruptcy attorneys throughout the bankruptcy process. Sadek’s bankruptcy lawyers use their understanding of bankruptcy law to ensure that clients get the most out of Chapter 7 bankruptcy. For example, Chapter 7 usually will not discharge student loans. However, if paying a student loan would cause the debtor undue hardship, the court may allow for those debts to be discharged.
Chapter 13 Bankruptcy in NJ & PA
Chapter 13 bankruptcy is well-suited to those who have a stable level of regular income but struggle to keep up with monthly payments. Rather than using property to repay creditors, Chapter 13 allows debtors to propose a new debt repayment plan. If your bankruptcy trustee and creditors accept the new plan, you will have 3 to 5 years to repay your debts. Throughout your case, a trustee will continually monitor your income and ensure that you comply with the repayment plan.
Chapter 13 is most often used to repay secured debts, such as mortgages and other secured loans. If you have missed payments on your home, Chapter 13 can allow you to catch up on those missed payments while protecting your home from foreclosure.
The NJ and PA Chapter 13 Bankruptcy lawyers at Sadek Law strive to make the bankruptcy process as easy as possible for our clients. Allow our team to answer your Chapter 13 bankruptcy questions today.
Ready to Declare Bankruptcy in Pennsylvania or New Jersey? Call the Bankruptcy Attorneys at Sadek Bankruptcy Law Offices Today
We at Sadek Bankruptcy Law Offices believe that no one should have to face financial hardships alone. If you owe money to aggressive creditors and aren’t sure how you’ll make your next payment, our lawyers can help. We treat each case with the personalized attention necessary to offer reliable financial advice. Whether you just need help assessing your financial situation, want to learn about debt relief options, or want to start putting together your bankruptcy petition, you can rely on Attorney Brad J. Sadek and the rest of the team at Sadek Law.
The sooner you contact us, the sooner you can learn if bankruptcy is right for you. Call (215) 545-0008 to reach us in Pennsylvania or (856) 890-9003 to reach us in New Jersey. You can also schedule your free consultation by contacting us online.