This type of issues is rooted in the bankruptcy rules.  First, Rule 4002(a) creates a requirement that a debtor puts their property and their exemptions (claimed under section 522) in the applicable time limit stated in Rule 2001.  

Rule 1007(c) states that a debtor in a voluntary case (the most common) is required to file a list of their exemptions within 15 days of the petition being filed (but your Chester County bankruptcy lawyer in an emergency filing may push the deadline back via Rule 1007(c)).  This extension may be granted only on motion for cause shown on notice to the U.S. Trustee and with a host of other complicated rules. Trust your lawyer to get this done if necessary.   

Bankruptcy Rule 1007(c) provides that a schedule of exemptions filed prior to the conversion of a case to another chapter (either 7 or 13) is deemed filed in the converted case unless the court directs otherwise.  But, if your lawyer doesn't get the exemption, it will be interpreted as a waiver of exemptions (note:  This never happens if your Chester County lawyer is halfway decent).  

I sometimes get calls from individuals in Bucks County.  I received a call from a Bucks County criminal lawyer this week.  He was inquiring about whether his client could file for bankruptcy at the conclusion of his criminal case.  

The bottom line:  The court costs and fines and restitution are not discharged in a Chapter 7 bankruptcy.  They are deemed automatically non-dischargeable.  Similar to child support for a Bucks County divorce lawyer, a person can not get a fresh start on child support.  It is public policy.  

Traffic fines are a little different and you should consult a Bucks County bankruptcy lawyer to see if you can get that debt discharged in a bankruptcy.  Of course, there is the potential to repay the debt in a Chapter 13 plan.  You have a lot of options with a great bar association over in our sister county and it would make sense to seek appropriate legal advice to make sure you protection yourself legally.  

State exemptions is the predominant exemption law applicable in bankruptcy cases as the majority of state legislatures have opted out of authority (remember - Pennsylvania has not). As a state legislature amends an exemption statute, the amended exemption becomes applicable to bankruptcy cases filed after the amendments effective date. Those living within an opt out state are therefore subject to such changes made in state exemptions laws. The opt out, however, does not affect the federal non-bankruptcy exemptions that may be available to a debtor with an opt out state. Again, you and your Chester County bankruptcy lawyer should explore the limited reasons why you may want to choose the state exemptions in your bankruptcy.  

The language of the code permits the state legislature to prohibit use of only bankruptcy exemptions under 522(d). The state may not, therefore, prohibit bankruptcy debtors who are living within that state from claiming other federal exemptions that are not found in the bankruptcy code. 

Any doubt about this confinement of the states to opt out of section 522(d) only was answered implicitly by the Supreme Court's decision in Owen v. Owen, where "Petitioner purchased his Florida condominium in 1984 subject to respondent's pre-existing judgment lien, and the property first qualified as a homestead under a 1985 amendment to the State's homestead law". The fact that the state legislature has opted out of the section 522(d) bankruptcy exemptions does not deprive the bankruptcy court of subject matter jurisdiction over the exempt property, at least until it has been determined to be exempt in fact, either by the absence of timely objections or by the courts ruling upon objections favorably to the debtor. The exemption, once allowed, acts to revest that property in the debtor.

Here's a quick overview of the automatic stay in bankruptcy.  It is a powerful reason for Chester County families to file a bankruptcy with a Chester County bankruptcy lawyer.  As most people know, the automatic stay will stop most civil legal proceedings (i.e. lawsuits from creditors such as credit card companies).  It will not stop/stay paternity, support or alimony proceedings.  

It will stop most "execution" proceedings (there are limitations for evictions) and they may compel restoration of utility service (i.e. your PECO services).  For an eviction based on "judgment of possession", the automatic stay does not go into effect unless the debtor pays the rent which will become due within 30 days after filing and files a certification that the debtor is entitled to cure the default.  Obviously, for strategic purposes, a bankruptcy should be filed before a judgment of possession is entered.  

The automatic stay may be limited if you filed a prior bankruptcy.  Specifically, the automatic stay will only last for 30 days if you had one prior dismissal within the year prior to the new filing.  Your bankruptcy lawyer in Chester County could file a motion to extend the automatic stay which could potentially extend this time limitation.  

If there are two or more dismissals within the year prior to the new filing, the stay does not go into effect unless the court imposes it.  

After your Chester County bankruptcy, you should read my posts on the best ways to get a mortgage (Part 1, Part 2).  

You will also have to get a Realtor.  My first and biggest rule is this -- get a full-time Realtor.  You picked a Chester County bankruptcy lawyer because they focused on bankruptcy.  You did not go to a Bucks County criminal defense lawyer for your bankruptcy.  Thus, you should pick someone who sells real estate full-time.  This is not a hobby and it is not something you should do just to help out a neighbor or friend.  The Realtor needs to see deals, transactions, and issues in volume.  Part-timers do not cut it when it comes to protecting you and getting the best deal.  

You will also want a Realtor who knows a lot about people buying homes after a bankruptcy.  Find out if they know a lot about FHA mortgages.  Make they set you up with the Multiple Listing Service (known commonly as MLS) and offer you robust options, including flexibility in home visits.  

You will want to get their opinions on pricing of various homes.  Most importantly, make them substantiate the opinion.  This is typically done via comparisons ("comps") of other homes in terms of condition of homes, past sales, etc.  Stay on top of the person -- you need to make sure you get the best deal possible to get your life moving in a positive direction.  

As I continue to blog, I get questions that are great.  I find that I make some assumptions that people understand certain issues, but they may not.  Today, an old client came in to discuss credit after their bankruptcy.  They wanted to know what an FHA loan is.  

As I previously blogged on the best ways to get a mortgage (Part 1, Part 2) after a bankruptcy, I mentioned that is most likely that people will best qualify for an FHA mortgage 24 months after their discharge date because the down-payment requirements are best suited for a person coming out of a bankruptcy.  

If you need a good mortgage person, make sure you call your Chester County bankruptcy lawyer to see if they have a good referral for you.  

Chester County Bankruptcy Petition

Bankruptcy petitions must be properly and completely prepared, both in their totality and in their technical aspects.  The bankruptcy clerk may reject a petition if they are not technically correct.  This one one of the big reasons why you hire a Chester County bankruptcy lawyer to help you with the bankruptcy process.  The forms include the schedules (A-J), the Statement of Financial Affairs, and the Means Test Calculation.  

Other Requirements for a Chester County Bankruptcy Petition

A bankruptcy attorney must sign every petition, pleading, and motion.  You must also sign the bankruptcy petition and your attorney must maintain that original document.  This requirement is controlled via Rule 1008.  

If your bankruptcy forms are incomplete or incorrect, you may be deprived of rights or property to which you may otherwise be entitled to.  Or, in the alternative, your attorney may be sanctioned or may have to file additional motions or amended schedules and statements to correct the problems.  Thus, it makes sense for time, economics, and professional obligations, to prepare these forms properly and correctly.  

This is an important case regarding the exemption of annuity payments.  Essentially, the Chapter 7 Trustee objected to the debtor exempting annuity payments they were receiving from an auto accident.  The payments were part of a structured settlement where she would receive lump sum distributions at 3 year intervals.  

The court held that the debtor's right to receive the distributions were not exempt.  It recognized that she did not "own" the annuity contract and the contract was not part of the bankruptcy estate, but her "interest" in the "stream of payments" was property of the estate. 

To me, as a bankruptcy lawyer in Chester County, this seems like a no-brainer.  I would have made sure to have the client recognize that it was likely that the payments would not be exempt as they most closely reflect income/inheritance.  

Debt-to-Income Ratio Questions

I had somebody write in after I discussed conventional and FHA mortgages after a bankruptcy.  I represented them as a Chester County bankruptcy lawyer.  

They wanted to know two things:

1)  What is the debt-to-income ratio?  

2)  What number do the mortgage companies like to see?

First, the debt-to-income ratio is the measure of your debt payments to the recurring monthly income you have.  The higher the number/ratio the more difficult it is for a person to meet their debt obligations.  It is expressed as a decimal or a percentage.  If you have no debt payments, your debt-to-income ratio will be 0.  

You can find a pretty rudimentary calculator for the debt-to-income ratio here.  

For mortgages, FHA mortgages don't like to see anything higher than 28% on FHA mortgage loans for the debt-to-income ratio.  For conventional mortgages, it normally can't be higher than 36%.  

I previously discussed finding Realtor to purchase a home after your bankruptcy.  But, a big question remains -- Should you tell them about your bankruptcy?  

Here are my thoughts -- I would not immediately volunteer the information.  I would first vet them for their professionalism and experience.  Then, I would line up a mortgage professional to get you a pre-approval letter.  If you are not beyond your 24 months, you won't be able to get a pre-approval letter yet.  

I would then approach the Realtor with "your story".  Explain why (but keep it brief) you went into bankruptcy (i.e. medical, job loss) and what has changed to make a home purchase possible.  Present your budget and your income.  Explain what you can afford and why.  Explain your timeline to purchase, where you want to purchase, and your long-term plan.  The more, organized information you can provide, the better.