Bankruptcy

  • Bankruptcy law provides for the reduction or elimination of certain debts, and can provide a timeline for the repayment of non-dischargeable debts over time.  It also permits individuals and organizations to repay secured debts - typically debts with real estate and vehicles pledged as collateral - often on more favorable terms to the borrower.

  • Bankruptcy proceedings are supervised by and litigated in the United States Bankruptcy Courts.  These courts are a part of the District Courts of The United States.  The United States Trustees were established by Congress to handle many of the supervisory and administrative duties of bankruptcy proceedings.  Proceedings in bankruptcy courts are governed by the Bankruptcy Rules which were promulgated by the Supreme Court under the authority of Congress.

  • Bankruptcy comes in five varieties:

    • Chapter 7 - This provides for the cancelation of unsecured debts, such as credit cards and personal loans.  Secured debt is typically unaltered, meaning that the collateral remains in the borrower's possession as long as timely payments are being made.  Chapter 7 is always available to individuals with primarily business debts and corporations.  Otherwise, individuals cannot file a Chapter 7 petition unless they meet certain income requirements.

    • Chapter 9 - This chapter deals with the reorganization of municipalities and related local entities, like county-owned hospitals and school districts.  Individuals and corporations cannot file bankruptcy under Chapter 9.      

    • Chapter 11 - This is the most comprehensive chapter of the Bankruptcy Code.  It provides a myriad of options to reorganize debt, i.e., by repaying some debts, cancelling others and restructuring the remainder.  Although individuals can file for Chapter 11 relief, the relatively high filing fees and administrative costs lead most individuals to favor Chapter 7 or Chapter 13 bankruptcies.

    • Chapter 12 - This chapter provides for the restructuring of debts for family farmers.  Only family farmers are eligible and, though not analogous, it shares many characteristics with Chapter 13 bankruptcy.

    • Chapter 13 - Chapter 13 permits the discharge of some debts, as well as the repayment of others over a period of three to five years.  It may also permit a reduction in principal owed on secured debts, or the elimination of these debts altogether.  It can also be used to structure a repayment plan for debts that cannot be discharged in bankruptcy.  Only individuals are permitted to file under this chapter, and there are some, albeit limited, income and debt qualifications.

  • Typically, recent tax debts as well as child support, criminal restitution and student loans will not be discharged - i.e., eliminated - by a bankruptcy petition unless they are repaid in full by the borrower during the course of the bankruptcy.  At the same time, individuals are permitted to keep certain assets without regard to the type of bankruptcy that they file.  For example, Individual Retirement Accounts (IRA's) are protected under 11 U.S.C § 522(d) and thus cannot be involuntarily used to repay creditors in a bankruptcy.  Varying levels of home equity are also often protected, as often are motor vehicles in varying amounts.   

​​​​© 2017 by the Law Offices of Max C. Feldman

Proudly serving the cities of Aliquippa, Arnold, Beaver Falls, Butler, Clairton, Connellsville, Greensburg, Indiana, Jeannette, Latrobe, Lower Burrell, McKeesport, Monessen, Monongahela, New Kensington, Pittsburgh, Uniontown, Washington; the boroughs of Ambridge, Apollo, Aspinwall, Avalon, Baden, Baldwin, Beaver, Belle Vernon, Bellevue, Bentleyville, Bethel Park, Blawnox, Brackenridge, Braddock Hills, Braddock, Bradford Woods, Brentwood, Bridgeville, Bridgewater, Burgettstown, California, Canonsburg, Carnegie, Castle Shannon, Charleroi, Cheswick, Churchill, Coraopolis, Crafton, Delmont, Donora, Dormont, East McKeesport, Washington, Economy, Edgewood, Edgeworth, Elizabeth, Ellwood City, Emsworth, Etna, Evans City, Export, Finleyville, Ford City, Forest Hills, Fox Chapel, Franklin Park, Freedom, Freeport, Glassport, Green Tree, Harmony, Heidelberg, Homestead, Hookstown, Houston, Irwin, Jefferson Hills, Kittanning, Leechburg, Leetsdale, Ligonier, Mars, McDonald, McKees Rocks, Midland, Millvale, Monaca, Monroeville, Mt. Pleasant, Munhall, Murrysville, New Brighton, New Stanton, Oakdale, Oakmont, Pitcairn, Pleasant Hills, Plum, Rochester, Saxonburg, Scottdale, Seven Fields, Sewickley, Shippingport, Slippery Rock, Swissvale, Tarentum, Trafford, Turtle Creek, Vandergrift, Verona, West Mifflin, White Oak, Whitehall, Wilkinsburg, Zelienople; the Allegheny County Townships of Aleppo, Baldwin, Collier, Crescent, East Deer, Elizabeth, Fawn, Findlay, Forward, Frazer, Hampton, Harmar, Harrison, Indiana, Kennedy, Kilbuck, Leet, Marshall, McCandless, Moon, Mt. Lebanon, Neville, North Fayette, North Versailles, O'Hara, Ohio, Penn Hills, Pine, Reserve, Richland, Robinson, Ross, Scott, Shaler, South Fayette, South Park, South Versailles, Springdale, Stowe, Upper St. Clair, West Deer, Wilkins, the Armstrong County Townships of Bethel, Boggs, Bradys Bend, Burrell, Cadogan, Cowanshannock, East Franklin, Gilpin, Hovey, Kiskiminetas, Kittanning, Madison, Mahoning, Manor, North Buffalo, Parks, Perry, Pine, Plumcreek, Rayburn, Redbank, South Bend, South Buffalo, Sugarcreek, Valley, Washington, Wayne, West Franklin, the Beaver County Townships of Brighton, Center, Chippewa, Darlington, Daugherty, Franklin, Greene, Hanover, Harmony, Hopewell, Independence, Marion, New Sewickley, North Sewickley, Patterson, Potter, Pulaski, Raccoon, Rochester, South Beaver, Vanport, White, the Butler County Townships of Adams, Allegheny, Brady, Buffalo, Butler, Center, Cherry, Clay, Clearfield, Clinton, Concord, Connoquenessing, Cranberry, Donegal, Fairview, Forward, Franklin, Jackson, Jefferson, Lancaster, Marion, Mercer, Middlesex, Muddy Creek, Oakland, Parker, Penn, Slippery Rock, Summit, Venango, Washington, Winfield, Worth, the Fayette County Townships of Brownsville, Bullskin, Connellsville, Dunbar, Franklin, Georges, German, Henry, Clay, Jefferson, Lower Tyrone, Luzerne, Menallen, Nicholson, North Union, Perry, Redstone, Saltlick, South Union, Springfield, Springhill, Stewart, Upper Tyrone, Washington, Wharton, the Washington County Townships of Amwell, Blaine, Buffalo, Canton, Carroll, Cecil, Chartiers, Cross Creek, Donegal, East Bethlehem, East Finley, Fallowfield, Hanover, Hopewell, Independence, Jefferson, Morris, Mount Pleasant, North Bethlehem, North Franklin, North Strabane, Nottingham, Peters, Robinson, Smith, Somerset, South Franklin, South Strabane, Union, West Bethlehem, West Finley, West Pike Run, the Westmoreland County Townships of Allegheny, Bell, Cook, Derry, Donegal, East Huntingdon, Fairfield, Hempfield, Irwin, Ligonier, Loyalhanna, Mount Pleasant, North Huntingdon, Penn, Rostraver, Salem, Sewickley, South Huntingdon, St. Clair, Unity; and the counties of Allegheny, Armstrong, Beaver, Butler, Fayette, Greene, Indiana, Lawrence, Somerset, Washington, and Westmoreland.

CONNECT WITH US:

  • Facebook - Black Circle

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.