All cases start out the same way. The later steps vary by Chapter.

   FIRST: Schedule a meeting. You should schedule a meeting to see if bankruptcy is your the best tool for starting fresh. We offer a free initial consultation for this purpose.

   SECOND: Assemble information and documents for the meeting. Although we can discuss your situation and bankruptcy alternatives generally, the more information and documents you have at the first meeting the more productive it will be, provided, however, if the information is not readily available you should meet anyway. The kinds of information and documents you should try to assemble and bring with you include:

• (a) A list of all of your creditors and balance due each. Eventually we will need to know the account number, the creditor's address, the date(s) the debt was incurred, and the purpose for which you incurred the debt. Some of this information will be on any statements of account, bills, or invoices which you have received and you should bring them also. Note that we need to know about all of your creditors (including secured (mortgage and auto finance), priority (taxes) and general unsecured (such as credit cards)).
  
  
• (b) A list of your major assets (i.e., any items of property individually worth more that $525) and your best estimate of the fair market value of each of those assets).
  
  
• (c) If you are employed, your last two month's worth of paystubs (and if available, the last six (6) months (note that many employers will provide a printout of this information if you do not retain copies of paystubs))
  
  
• (d) A budget of your monthly income (including sources other than employment income such as self-employment income, financial assistances from any source, social security, etc.) and your monthly expenses. Budget Worksheets may help you to prepare the budget by providing categories of income and expenses. The budget does not have to be down to the last dollar, but the more accurate you can be, the more useful it is for you and us.
  
  
• (e) Copies of your last three (3) filed tax returns.
  
  
• (f) Copies of any lawsuits, Sale Notices, demand letters from creditors, taxing body assessment notices, and anything else that has caused you to seek our assistance.
  
  

   THIRD: Prepare the Bankruptcy Paperwork. If it is determined that Bankruptcy is the right tool, you and we work together to prepare the "Bankruptcy Paperwork."

   FOURTH: Attend a Credit Counseling Briefing. At some point, no more than 180 days before the bankruptcy would be filed, and no less than one day before the case can be filed, you will need to attend a credit counseling briefing provided by an approved agency. There is a small charge for this briefing which you will pay directly to the agency. Most agencies offer briefings over the phone and internet. We must be provided a copy of the certificate of completion before the case is filed. A list of approved agencies can be accessed at the United States Trustee Web Site. See Approved Credit Counseling Agencies and scroll down until you find the approved agencies for your state and district (for Pittsburgh it is the Western District of Pennsylvania). As always, we can assist you with this, or answer any questions you may have.

   FIFTH: File the Case. Once you have completed the credit counseling briefing and the paperwork is done (or we agree to file the case before the paperwork is completed (because of an emergency such as a foreclosure sale)), the case can be filed. From there, the steps depend on the Chapter under which you have filed.

An individual contemplating bankruptcy has 4 alternatives. The two main ones are Chapters 7 and 13. Under some circumstances, Chapter 11 may be indicated because of the complexity of the individual's situation or because he or she are ineligible for Chapter 13. The fourth alternative, which is not dealt with in this web site is Chapter 12 which is for family farmers. In many respects Chapter 12 mirrors Chapter 13.

   CHAPTER 7: Chapter 7 is, in bankruptcy lingo, the "liquidation" chapter. In short, this means that all assets of the individual filer having a value in excess of the the allowed exemptions and liens will be sold and the proceeds paid over to the creditors. The individual filer's exemptions can be taken either in cash (up to the exemption cap for that kind of asset) or "in kind" (which means the asset itself if its value is no more than the exemption cap for that kind of asset). Most cases are "no asset," which means there is no value in excess of the allowed exemptions and liens and no assets are sold. For more information about this Chapter see Chapter 7.

All things being equal, you would prefer to be in Chapter 7. Unlike Chapters 11 and 13 which require you to fund a plan, out of your future income, for what could be 3 to 5 years, or more, after the case is filed, Chapter 7 is the quickest route to a fresh start. Note, however, even if preferable, Chapter 7 might not be available to you because of where you come out on the "means" or the "totality of the circumstances" tests. For more on these tests see Section 707(b) Eligibility Tests.

   CHAPTER 13: Chapter 13 is, in bankruptcy lingo, the "wage earners reorganization" chapter (though it is available to any individual with regular "income" that falls within its debt limits and not just to "wage" earners). As discussed above, Chapter 13 requires a individual filer to fund a payment plan out of future income (for a period of 3 to 5 years).

There are three primary benefits to Chapter 13. It provides a individual filer time to cure accrued arrearages on a secured claim or a lease (such as a mortgage on a home, or a secured claim or a lease on a car or business asset). It provides an individual filer an opportunity retain assets in excess of allowable exemptions by, in effect, "buying" them back through the plan payments. Lastly, it provides a path to a fresh start where the individual filer is ineligible for Chapter 7 because of the "means" or "totality of the circumstances" tests. For more information see Chapter 13.

   CHAPTER 11: Chapter 11 is the business reorganization chapter, although it may be utilized by individuals with consumer debts. Like Chapter 13, a individual filer must fund a plan out of future income. Unlike Chapter 13, however, there are no debt limits and there is more flexibility on the timing of payments and the manner of plan funding. Because of the complexity and cost of Chapter 11, an individual with regular income, if eligible, is normally better off in Chapter 13. Chapter 11 is an option, though for the more complicated case. For more information see Chapter 11.

Like most things in life, it depends. Legal services aren’t fast food so we don’t have a menu with prices. Usually, we will be able to quote a flat fee after your free initial consultation. However, we promise competitive rates and our assurance that we will handle all aspects of your case in the most cost-effective manner possible.

There are essentially three groups of costs.

* Filing Fees. Filing fees are paid to the Clerk of the Bankruptcy Court and are the "entrance fee." They vary by Chapter. The filing fee for a Chapter 7 is $299, for a Chapter 13 it is $274, and for a Chapter 11 it is $1,039.00. These amounts are subjected to change from time and time.

* Miscellaneous Expenses. These are additional out of pocket expenses that you may incur in the course of preparing or filing for bankruptcy. They include the cost of the pre-filing credit counseling briefing, and a post-filing debtor education course (more on that below). They may also include property searches, credit reports, appraisals, and other things that come up in the process of preparing for, or properly administering, the bankruptcy case. These expenses are usually not significant.

* Legal Fees. These are what you will pay us to help you prepare for the bankruptcy filing and represent you after the case has been filed. The "no look" fee (i.e., the fee for which no fee application is required) for a Chapter 13 case (in the Western District of Pennsylvania) is $3,100 (provided, however, the final fees may be higher depending on what will need to be done in the case). Ordinarily, a Chapter 13 case will be filed for a partial payment of the fee with the balance collected out of the post-filing plan payments. The amount charged for a Chapter 7 varies by complexity though it is usually less than the cost of a Chapter 13. Unlike Chapter 13, however, the fees for Chapter 7 must, because of the differences between the legal affect of Chapters 7 and 13, be paid before the case is filed.

Fee Agreement. Regardless of Chapter, you are entitled to, and should make sure you get and review, a Fee Agreement. This will detail what and when you must pay. You should also be aware that flat fees will usually not cover everything that might arise in the course of the bankruptcy case. Accordingly, review the Fee Agreement carefully so that you know what is covered and what is not.

NOTE. You have the right to represent yourself in Bankruptcy. See "Disclosures" (which are statutorily required to be provided to consumer debtors) which, among other things, expressly advises you of this right. In other words, your elected representatives in Washington, D.C., want you to know that you have the right to represent yourself in bankruptcy. Although you have that right, you should also be aware that it is dangerous to get into a legal proceeding (which a bankruptcy case most surely is), without legal representation. See also the U.S. Courts website (at http://www.uscourts.gov/bankruptcycourts/prose.html) which points out that "Bankruptcy has long-term financial and legal consequences — hiring a competent attorney is strongly recommended." While we hope you consider us for representation (if you elect to be represented), we are not your only choice. If you cannot afford an attorney - call your local bar association (in Allegheny County that would be the ACBA Lawyer Referral Service at (412) 261-5555) to see if you're eligible for some form of legal aid.

The answer is usually yes, subject to three important caveats.

First, the equity in your house, or car, or other asset(s) you want to retain cannot exceed your exemptions (or what you can afford to pay through a Chapter 11 or 13 plan). There is no general homestead exemption in Pennsylvania - but between the affect of the exemptions which are available, and pre-existing liens, more often than not there is no equity for the bankruptcy estate in the house or the car. If there is, however, then some provision must be made or there is a risk that the property will be administered.

Second, to the extent there are pre-existing liens in the house, car, or other property - you must be able to afford the ongoing payments. If you are in arrears or or your income is less than that needed to remain current on the mortgage or car payments, you may need to consider Chapter 11 or 13 or the surrender of the property. For more, see Liens in Bankruptcy and Reaffirmation.

Third, the "cost" of retaining your house or car cannot be at the expense of your ability to make some distribution to unsecured creditors. In other words, a Court may dismiss a Chapter 7 case (see, for example In re Zayas), or deny confirmation of a Chapter 13 plan (see, for example In re Loper), if it finds that the amount of the mortgage or car payments are "unnecessarily high" and there are reasonable (lower cost) alternatives. If you are living in a house with very high monthly payments, or driving a luxury car (again with very high monthly payments), this might be an issue. For most people it is not. [Note that the effect of high mortgage and car payments is a developing area. In a recent case, In re Johnson, --- B.R. ----, 2008 WL 5265740 (Bankr.S.D.Cal. 2008), the Court held that Congress did not intend that consumers would be denied access to Chapter 7 solely because of the amount of their mortgage payment on their principal residence, and so, in determining whether an “abuse” exists based on the totality of the circumstances of debtors' financial situation, the court may not consider the reasonableness of debtors' mortgage payment.]

As with everything else we offer on this website - this discussion is for general informational purposes. Each situation is different. In order to know for sure how a bankruptcy will affect you and your home and car and other assets, you need to consult an attorney.

In a sense, you appear through the Bankruptcy Paperwork which you help prepare and we file. The Paperwork requires detailed disclosure of a number of items including your assets (and their values), your creditors, and any transfers made prior to bankruptcy. Needless to say, accuracy and completeness are essential.

Beyond the Bankruptcy Paperwork, you will be required to appear at a first meeting of creditors (the Section 341 Meeting). All your creditors receive notice of the meeting and can attend and question you about your financial condition and the bankruptcy. The meeting is conducted by a trustee who typically takes the lead in the examination. The trustee uses the meeting to ask you questions about your Bankruptcy Paperwork, determines if you have or might have assets which exceed the amount of allowable exemptions, and determines (at least in Chapter 7) whether there is anything about your case (including disposable income) that renders you ineligible for Chapter 7.

As a practical matter, creditors seldom appear, and, in a Chapter 7 at least, unless the trustee believes there are nonexempt assets, the questioning is short. In Chapters 11 and 13 the examination will typically be more involved.

Whether you need to make any appearances beyond the first meeting of creditors depends on the Chapter, the issues in your case, and local requirements. To the extent a matter arises in your case which requires your testimony, you will need to appear. This, therefore, is something you should discuss with your attorney.

We the one that actually prepares the Bankruptcy Paperwork (which consists of Schedules, a Statement of Financial Affairs, and other documents that need to be filed as part of bankruptcy case). Your part is to accumulate the information and documents we need to compete that paperwork. We, of course, guide you in the process of accumulating the information and documents.

The Bankruptcy Paperwork does require you to provided a fair amount of detail about your assets (including a list of the assets and the fair market value of the assets), liabilities (including the names, addresses and account numbers for each creditor), income (during the three years prior to the bankruptcy, and month to month beginning 6 months before the bankruptcy is filed), and expenses. The effort is worth it. Not only is this required for the bankruptcy filing, it helps you to get a handle on your affairs, all of which is part of the fresh start. Look at this not as a chore, but as part of the process of starting fresh.

If you are the detail oriented type, and would like to know more about the paper chase that bankruptcy is, see Bankruptcy Paperwork.

Although it is not necessary that the Bankruptcy Paperwork be completed before a bankruptcy is filed (you would have 15 days after the filing to complete the paperwork and could request additional time under certain circumstances), except in an emergency situation the Paperwork should be completed first. If all information and documents required by the Paperwork has been accumulated and reviewed we should be able to identify the issues that might come up in the case. Whether those issues can be resolved prior to the case being filed, you at least want to know about them before the case is filed. If you wait until after the case is filed to accumulate the information you may not know about the issues until after it is too late. Secondly, getting the Paperwork done before the case is filed avoids the pressure created by what is a relatively short deadline.

The Fair Credit Reporting Act (15 U.S.C. §1681 et. seq.) prohibits the reporting of obsolete information about consumers. Obsolete information includes bankruptcy cases filed more than 10 years prior to the report. See 15 U.S.C. §1681c(a)(1). There are, however, exceptions to the prohibition such as reports used in connection with large credit transactions, or certain employment situations.

The related, and more significant, question is whether the bankruptcy will affect your ability to get credit. Whether you can get credit, and the cost (interest rate) of that credit, is a matter between you and your post-bankruptcy creditors. Not surprisingly, the entities willing to extend credit will be fewer, and the costs will be higher (although depending on your circumstances, you may already be at a point where your credit options are limited). On the other hand, if you have achieved the fresh start that bankruptcy is designed to offer, you have a solid foundation from which to begin the process of rebuilding your creditworthiness. By starting off slowly with one or two gas or retailer credit cards (used sparingly and paid on time), and remaining current on your other bills and obligations (particularly your home and car payments), over time your ability to get credit should improve.

In short, it has increased the documentary burdens on individuals filing for bankruptcy and, in so doing, increased the complexity and cost of cases.

Among other things, as a result of BAPCPA:

(a) Individual debtors must generally undergo a credit counseling briefing before they file for bankruptcy, and must complete a separate financial management course after the bankruptcy has been been filed (and before they are discharged). We can assist you in locating an approved agency or you can go to Credit Counseling Agencies, for prepetition credit counseling, and to Debtor Education Providers for approved providers of post-petition financial management. If you go to the web site, scroll down until you get to the providers for your district (cases filed in Pittsburgh are in the "Western District of Pennsylvania").

(b) Individual individual filers must undergo a "means test" in order to determine whether a presumption of abuse exists in Chapter 7, or the minimum duration of a plan and the presumptively allowable expenses in Chapter 13. The "means test" is based on income received within 6 months of the case filing together with secured debt and certain additional allowances. For more information see Section 707(b) Eligibility Tests.

(c) Individual individual filers in Chapter 7 must agree to reaffirm secured debt or assume leases in order to retain the property, i.e., there is no longer the option to retain and remain current.

(d) Nondischargeable debts have been expanded in all Chapters.

(e) The ability to "strip down" recent undersecured car loans in Chapter 13 has been limited.

(f) U.S. Trustees are required to engage in random audits of the information contained in the Bankruptcy Paperwork. For more information on the random audits see the U.S. Trustee press release at Random Audit Press Release. The documents to be requested as part of an audit will include six (6) months of pre-bankruptcy pay stubs and account statements. See Form of Document Request. For more information see U.S. Attorney Bulletin Excerpt.

(g) Additional disclosures are required to be provided to individual filers by trustees, the court and attorneys which result in additional documents that must be read and signed off on by individual filers.

Again, we work with you to ensure compliance with all the rules and requirements of bankruptcy.

NO. Sorry to shout, but this is important.

Think about it. Would it make sense for the law to permit people to transfer away assets before they file bankruptcy, or otherwise hide or omit assets, in order to keep those assets out of the hands of the trustee (and their creditors)? Of course not!

A whole bunch of bad things happen if you transfer an asset, in contemplation of bankruptcy, with the intent to hinder, delay or defraud your creditors or the bankruptcy trustee. For one, the asset may be recovered (and you will denied any exemption you might have otherwise had in it had you not transferred it away in the first place). Secondly, you may be denied a discharge. So, you would not only lose the asset, you would lose the entire benefit of the bankruptcy. Still further, the matter may be referred for a criminal investigation and prosecuted as a bankruptcy crime. (For more on bankruptcy crimes, see, U.S. Attorney Bulletin Excerpt.) Criminal referral is the worse case, but if that happens you lose the asset, lose the discharge, and possibly lose your freedom.

Remember why you are reading this in the first place. You want to start fresh. Don't risk that by transferring assets or omitting information from your Bankruptcy Paperwork.

Even though debts aren't assets, and the omission of debts may not have been done with the intent to hinder or delay or defraud, it's still prohibited. You can reaffirm the debt if you feel the need. To the extent you feel morally obligated to pay the debt, because it was a loan from a family member or friend, there is nothing in bankruptcy which prohibits you from doing so after your case is concluded whether or not you formally reaffirm it.

The overriding rule is full disclosure. Unlike, perhaps, most rules of life, this is one for which there are NO exceptions. (There we go, shouting again. Sorry).

A determination of whether you would be helped by a bankruptcy filing requires us to meet and discuss your particular circumstances (such as your particular assets, liabilities, income and expenses, and what it is you are looking for in your fresh start).

Some additional things which we may discuss, and which may affect the determination of whether bankruptcy will help you are:

• Alternatives to Bankruptcy. The best time to consider whether bankruptcy can help to resolve financial problems is when there are alternatives. Alternatives can include attempts at comprehensive out-of-court workouts, forbearance arrangements with key creditors, doing nothing and hoping that the problem passes, etc. Of course, bankruptcy may remain the best strategy.

• Pre-bankruptcy Planning. Is there any pre-bankruptcy planning which needs to be done. While both the bankruptcy and criminal law prohibit pre-bankruptcy transactions done for fraudulent purposes, there are, in some cases, things which can and should be done prior to the bankruptcy filing to enhance your fresh start.

• The risks of Bankruptcy. You need to be aware of the risks of the bankruptcy as well as the potential benefits. For example, risks include, but are not limited to: (i) assets which you may want to retain may be sold if they have equity and you cannot "repurchase" them in a Chapter 11 or 13 Plan; (ii) you may be denied a discharge if you engage in any wrongful conduct in relation to the bankruptcy case such as failing to disclose assets or failing to cooperate with the trustee; (iii) not all debts are discharged by a bankruptcy such as debts owed to creditors who are not given notice of the bankruptcy, debts arising from fraudulent or other wrongful conduct, certain tax and support obligations, etc.; (iv) the bankruptcy may spawn unanticipated litigation that increases the (legal) cost of the bankruptcy case; and (v) you may be denied credit for some period in the future (beyond that which would otherwise have been the case).

• The Bankruptcy Tradeoffs. Bankruptcy entails tradeoffs. As is the case with the risks, you must be aware of the tradeoffs. By filing bankruptcy you obtain the benefit of the automatic stay and get access to the various tools provided by the Bankruptcy Code to accomplish a fresh start. In return you will, among other things: be subjected to examination by your creditors at a first meeting of creditors (Section 341 meeting), and in possible Rule 2004 depositions; be obligated to make full disclosure of all assets and liabilities and all other aspects of your financial affairs; have subjected substantially all of your assets to the jurisdiction of the bankruptcy court; and have many of your business and/or financial decisions be second guessed, particularly in the context of Chapters 11 and 13. In order to make effective use of your bankruptcy it is necessary for you to appreciate the existence of the tradeoffs.