Philadelphia Chapter 7 Bankruptcy Attorney
If you have a low income and few assets, you might qualify to file for Chapter 7 bankruptcy, which is considered to be the simplest form of bankruptcy filing. In essence, Chapter 7 bankruptcy works as follows:
- All debts are discharged, with certain exceptions
- From the time you file, repossessions, foreclosures, and garnishments stop
- You do not establish a plan or plan payments
Since the bankruptcy laws were reformed in 2005, there has been a misconception that Chapter 7 liquidation is no longer possible. However, for many individuals, straight bankruptcy remains a viable option. The Philadelphia Chapter 7 bankruptcy lawyers at Cibik & Cataldo, Attorneys at Law, can help determine if Chapter 7 is your best option and if you qualify.
The means test
Federal bankruptcy laws establish a means test that determines whether you are eligible to file Chapter 7. While the means test is based on current income and debt, the allowable net median income varies by state. As of March 15, 2009, the median income for a single wage earner in Pennsylvania is $44,699. A family of two can earn up to $53,011, and the amount increases based on the number of family members.
But, state requirements can change at any time, which is why it is so important to retain a Philadelphia Chapter 7 bankruptcy lawyer who keeps on top of all local changes. The lawyers at Cibik & Cataldo Law Offices stay current with tax to be dischargeable in Chapter 7 of the bankruptcy code, it must meet the following criteria:
- Tax must have become due at least three years before filing bankruptcy
- The return must have been filed at least two years before filing
- The tax must have been assessed at least 240 days prior to filing
- The tax return must not have been fraudulent
If there was a Notice of Tax Lien filed, the debt is considered secured—and even though discharged in bankruptcy, the lien still remains attached to the property. The tax agency cannot attempt to enforce the tax debt. However, the amount equal to the value of the equity in the property at the time of filing of the bankruptcy must be paid when the property is sold.
Since taxes are often not discharged, often an offer in compromise combined with a bankruptcy provides the best relief for a taxpayer with both debt and tax problems.
Free initial consultation
If you are considering Chapter 7 bankruptcy as an option for your debt problems, make sure you choose Chapter 7 bankruptcy lawyers in Philadelphia who understand the local laws and take the time to look at your individual situation to find your best solution. Contact the experienced lawyers at Cibik & Cataldo, Attorneys at Law. We help you find the best fresh start you need.
