What is a foreclosure in Bucks County?

In a foreclosure in Bucks County, the bank or mortgage company to whom you owe money places a lien on the Bucks County real estate if you do not make your agreed upon loan payments. The bank or mortgage company can then initiate the process whereby they can take back your house due to your non payment. This process includes a foreclosure action, which is filed at the Court of Common Pleas in Bucks County. Eventually, if a foreclosure action is granted, a sheriff sale will occur where an individual is evicted from their home.

However, when filing a chapter 13 bankruptcy in Bucks County, if a homeowner can demonstrate ability to make a mortgage payment, then it is often possible to save your home. At the minimum, it will stop foreclosure proceedings temporarily. This is often a sound strategy to afford an owner time to catch up on missed payments or attempt a short-sale.

A foreclosure should be the first sign that you need to call a lawyer in Bucks County about filing a Chapter 13 bankruptcy. If you decide that you do not want to keep the home, you can potentially have the deficiency on the home discharged in a Bucks County Chapter 7 bankruptcy. The Chapter 7 will discharge the deficiency and additional unsecured debt.

Your Bucks County bankruptcy attorney will advise you if this is possible after reviewing your finances.

What is an "Automatic Stay"?

Once a debtor has filed for a Bucks County bankruptcy, an automatic stay is issued. This legal status prevents most, but not all, creditors from taking actions to collect a debt. The automatic stay is a very powerful component of a bankruptcy. The biggest benefit to the automatic stay for Bucks County bankruptcy clients is that it prevents creditor harassment. If a creditor attempts to collect a debt after a bankruptcy is filed (which triggers the automatic stay), they are in violation of the Fair Debt Collection Practices Act.

Secured creditors, upon showing cause, may request that they be exempted in a Chapter 7. This normally occurs after an individual is behind on their mortgage and the mortgage company is pursing a foreclosure. If the Bucks County resident wants to try and keep their home, it may be worthwhile to file a Chapter 13 bankruptcy.

An automatic stay will temporarily halt the foreclosure on a home (if in a Chapter 7), but once the debtor’s bankruptcy is discharged, the creditor can proceed with foreclosure. An automatic stay generally lasts until the debtor’s bankruptcy is discharged. It ends if the bankruptcy is dismissed.

What is a Bankruptcy Discharge?

A "discharge" in a Bucks County bankruptcy means that the debtor is released from liability for certain non-secured debts. Unless a creditor contests the removal of a debt, the discharge generally occurs 60 days after the appearance before the U.S. trustee in Bucks County. The Chapter 7 bankruptcy hearings in Bucks County are held in Trevose. Remember -- there are some debts that are not able to be discharged in a bankruptcy.

The discharge prevents the creditor from taking further action to collect a debt after the automatic stay. This includes eliminating personal contact, phone calls, and mailings by the creditor. Essentially, this is the final step for you to start fresh with your new life. You are assured that no further harassment can occur.

A copy of the discharge is mailed by the bankruptcy clerk to the debtor, the debtor’s bankruptcy attorney in Bucks County, and the debtor’s creditors.

What is a Loan Modification?

A lot of my Bucks County Chapter 13 clients have attempted a loan modification to save their home. So, what is a loan modification?

Essentially, a loan modification changes the terms of the original mortgage. Usually the length of the term (total years) of the mortgage and/or the interest rate are modified so the borrower can fulfill his/her mortgage obligations. Sometimes, but not often, the principal amount owed can be lowered.

It is often difficult to obtain a loan modification. The paperwork can be burdensome and the standards for modification are seemingly high. What occurs frequently is that a client hopes to put their mortgage arrears into a new principle payment through the modification.

If that fails, seeing a Bucks County bankruptcy attorney may provide the Bucks County resident with the opportunity to put their arrears into a payment plan with the trustee to save their home. This may be a great option to save their home from foreclosure and continue to attempt to work on a modification (which I always encourage clients to do).

How Often Can a Bucks County Individual File for Bankruptcy?

There are no legal limits to the number of times a bankruptcy client in Bucks County can file for bankruptcy, but there is a definite and specific time line between the filings. For instance, if you filed for a Chapter 7 you must wait 8 years before you are eligible to file another Chapter 7. You may, however, file a Chapter 13 within the 8 years. Be forewarned that if you file for a Chapter 13 before four years of filing for a Chapter 7, your unsecured debts will not be discharged.

If you filed a Chapter 13 bankruptcy and wish to file another Chapter 13 within a year, you will have to file a motion with the bankruptcy court to extend the automatic stay, which only lasts for 30 days on a second filing (see 11 USC 362 (c) (3)). To be granted the extension, you will have to show a change of circumstances (i.e. reduced expenses, an increase in pay, new family contribution, etc). Your Bucks County bankruptcy attorney can advise you of the best course of action.

What is a Bankruptcy Dismissal in a Bucks County Bankruptcy?

A debtor’s bankruptcy filing in Bucks County can be dismissed or ended in both a Bucks County Chapter 7 and Chapter 13. A dismissal can be either voluntary or involuntary on the debtor’s part.

The following are examples of involuntary dismissal: failure to complete the mandatory credit counseling within 180 days prior to filing, failing to be completely truthful in filling out the information on the bankruptcy forms, failing to attend the meeting of your creditors which is located in Trevose in Bucks County, failure to pay the necessary fees, and in the case of Chapter 13, failing to make your monthly planned payments.

A voluntary dismissal would occur if you change your mind about filing or you realize you are unable to make your monthly payments in a Chapter 13 filing.

Except in the case of fraud, which is a federal violation, a debtor can request a reinstatement of the bankruptcy which, if granted, will not affect the original filing.

What is Presumption of Abuse in a Bucks County Bankruptcy?

In a Chapter 7 filing in Bucks County, the debtor must demonstrate that his/her filing is not an abuse of the bankruptcy laws. A means test has been established with the changes in the 2005 bankruptcy laws. This test will demonstrate that you either have or have not the financial means to repay your debt under Chapter 7.

The means test is based on your household size and the median income for your state. Unfortunately, and what frustrates many Bucks County residents seeking bankruptcy relief, is that Philadelphia and Bucks County salaries are typically higher than other areas of the state. Since incomes from other parts of the state create a lower median, many bankruptcy clients "fail" the means test and must be a Chapter 13 based upon their income over the last 6 months. Even more frustrating, an individual in Levittown must make under $44,897 per year to qualify for a Chapter 7, whereas a resident of Burlington, NJ (which is only 1 mile away!) who is using a Burlington County bankruptcy attorney has to make less than $59,060 to qualify for a Chapter 7. Clearly, the law attempted to make a simple, baseline test that hurts many potential bankruptcy filers. I wish it were based on Zip Code to more accurately reflect the cost of living for geographic areas.

If you cannot qualify under the means test for a Chapter 7, then you may be considered under Chapter 13 or your case may be dismissed by the trustee. A means test is complicated and you should rely on a Bucks County bankruptcy attorney proficient in such matters to help you establish your position in the bankruptcy filing.

What are the fees for a bankruptcy?

For Chapter 7, the court filing fee is $299.00

For Chapter 13, the court filing fee is $274.00

There are also fees for your Bucks County Bankruptcy attorney. These fees vary and will be discussed when you meet with him/her.

Payment arrangements are often possible. In a Chapter 13, it is often possible to roll some of the legal fees due to your attorney into the trustee’s repayment plan. This can be a very powerful way to keep your out-of-pocket costs low.

What is a Trustee?

A bankruptcy trustee, usually an attorney or accountant, is appointed by the United States Department of Justice or by the creditors involved in a bankruptcy case. In a chapter 7 bankruptcy, the trustee reviews your assets and determines which are non-exempt. Most likely in a chapter 7, there are no non-exempt assets. But, if there are, then the trustee is responsible to make sure the assets are sold/liquidated and the proceeds go to the creditors. Sometimes, in lieu of a sale or liquidation, the trustee can set up a payment plan from the debtor to address this non-exempt property. For example, instead of forcing the sale of a non-exempt timeshare, a trustee can set up a payment plan from the debtor to satisfy the excess value.

The role of a trustee in a chapter 13 bankruptcy is more involved. The trustee must approve your repayment plan and receives your agreed upon monthly payments, which are then distributed to the creditors.

It is important for the debtor to remember that the trustee works for the creditors. Therefore, it is in the best interest of the debtor to hire a bankruptcy attorney who is familiar with the process of dealing with the trustee and who will attend the meeting (called 341 meeting and/or a "Meeting of the Creditors") with the trustee.

When filing your bankruptcy in Bucks County, your Bucks County bankruptcy lawyer will inform you about where you will have to meet the trustee. For Chapter 7 bankruptcies, the trustee hearings are held in Trevose in Lower Bucks County. For Chapter 13 bankruptcies, the trustee hearings are held in at the Bourse Building at Independence Mall in Philadephia.