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THE LEGAL EDGE By Thomas P. Heeney, Jr., Esquire and Stephen F.

Gehringer, Esquire Bankruptcy: Myths and Facts In the last article, we discussed the methods by which you might save your hardearned assets from creditors. However, things don’t always work out. Either you did not have an asset-protection plan in place or the one you did have just was not put together well and now your creditors are breaking down your door en masse. Now would be a good time to consult an attorney or an accountant. Better yet, go see both. Both may have one chief suggestion: Bankruptcy. Many hear that word with loathing and feel ashamed to even consider the option. Bear in mind, however, that declaring bankruptcy is solely an economic decision. Not a moral one. The entire purpose of the Bankruptcy Code is to give a second chance to honest people who find themselves in financial trouble. That said, we’d like you to consider some of the myths and facts about bankruptcy: 1. Bankruptcy takes money out of the pockets of honest, hard-working people. Creditors may claim that every unpaid debt they are forced to write off is passed onto everyone else in the form of higher interest rates. Here is the fact: Whether there was a bankruptcy law or not, creditors would still be passing on their losses to you. Why? Bankruptcy is declared by those who have no money. With or without a Bankruptcy Code, creditors know that you cannot squeeze water from a rock no matter how many judgment liens they acquire against debtors. 2. Permitting debtors to declare bankruptcy is eroding the ethics of our entire society. Credit card companies routinely extend credit to those who do not completely comprehend the responsibility or are unable to afford the interest afford it, which is, more often than not, evidenced by their own credit histories or credit applications. Allowing debtors to learn from their mistake and move on through bankruptcy is more positive than letting their debt smother and prevent them from supporting themselves or their families. 3. Those who file for bankruptcy are deadbeats. Creditors approve anyone under the sun for some card they have to offer. They offer credit cards to people with little income. For example, JC Penny once approved me a credit card with a substantial limit. This was when I was 15-years-old and declared with all honesty on the application that I possessed no income whatsoever. I just wanted the free two-liter of Pepsi they were giving away. Credit card companies make the most money from people who (a) use their cards often; and (b) cannot pay said cards off quickly. A member of that class of debtor is not the

C.C. Heeney & Associates. A bankruptcy will stop all of the harassment. At the end of the plan’s term. friends and coworkers. allow the trustee to take possession and sell non-exempt property and distribute the cash to your creditors if they qualify. and you are honestly unable to afford the debt they claim you owe them. high-income earner. Heeney & Associates P. In general. The court must approve this repayment plan that you fund from your normal income.. you will need to consider whether a Chapter 13 bankruptcy is a viable option. Esquire are attorneys of Heeney & Associates. been hit with a hospital bill that their insurance will not cover. There are two types of bankruptcy that are relevant to the average individual: Chapter 7 Bankruptcies. you can only declare a bankruptcy under Chapter 7 once every eight years. is a full service law firm for businesses. professionals and individuals alike. If you are an individual with debts. Chapter 13 Bankruptcies are a form of debt reorganization designed for individual wage earners.4. Once this happens. Those people are not evil. Bankruptcy is not the cause of debt. Jr. but instead is the person with a ignorance of credit cards or possessing middle to low income. Our toll-free number is 1-877-588-8817. They have lost their jobs. A discharge permanently prevents creditors listed by the debtor on his bankruptcy petitions from ever attempting to collect those debts again. Most have found themselves in a situation where they have been blind-sided. The information is not meant to be acted upon without proper legal assistance. Heeney. bankruptcy is an option to explore. Esquire and Stephen F.C. threatening you with lawsuits. and even put a stay on most legal cases (with the notable exceptions of criminal matters. Many do make their monthly payments and honestly try to pay their bills. but the result of it. In return. Gehringer. P. Your lawyer can review your situation and not only recommend whether a bankruptcy is the right option for you. As with all . This gives the debtor a fresh start. but also recommend what form this bankruptcy should take. DISCLAIMER: This column is a service providing only general legal advice. but have filed for a Chapter 7 bankruptcy within the past eight (8) years. also know as “liquidation” bankruptcies. all remaining debt is discharged. How this works is that the debtor and creditors agree on a payment plan. the creditors cease all collection efforts during the repayment period. child support and alimony actions). or suffered some other unexpected loss or change in their life. Bankruptcies are at critical levels and must be curbed. P. If the creditors are calling you constantly. has offices in Boyertown in Berks County and Pipersville in Bucks County. credit-responsible. ABOUT THE WRITERS: Thomas P. all remaining debt (with some exceptions) are discharged. Some may be your neighbors.

. anyone requiring legal help is strongly encouraged to seek the aid of an attorney.such matters of the law.