Attorney John Melaragno has represented individuals, couples and businesses in Chapter 7, Chapter 13 and Chapter 11 Bankruptcy cases since 1997. In addition, Attorney Melaragno has served on the Panel of Chapter 7 Trustees for the Bankruptcy Court of the Western District of Pennsylvania since 2004. As a Chapter 7 Bankruptcy Trustee, he has been assigned to oversee the administration of one-half of the Chapter 7 Bankruptcy cases filed in Erie, Warren, Forest, Elk, McKean and Crawford counties. Serving as a Chapter 7 Trustee and a Bankruptcy Attorney, has allowed him to handle over 6,000 bankruptcy cases over the years!
Having been involved in that many cases has provided Attorney Melaragno with the real world experience of handling the majority of issues that might arise in a bankruptcy case.
Katie Rougeux has been Attorney Melaragno's Paralegal since 2007. Katie works closely with clients to ensure that all necessary information and documentation is provided so she can accurately draft the Bankruptcy Petition and Schedules. Katie also assists with the administration of the Chapter 7 Trustee's Bankruptcy Cases that Attorney Melaragno oversees.
We are pleased to announce that John C. Melaragno has been selected as one of the Top 100 Bankruptcy Lawyers in the Commonwealth of Pennsylvania by the American Society of Legal Advocates. www.societyoflegaladvocates.org
Chapter 7: Liquidation
Chapter 7 Bankruptcy is for individuals and businesses that are unable to pay their debts while trying to maintain their bills. Filing for bankruptcy does not mean you will lose everything. There are certain exemptions that allow you to protect your assets.
Chapter 13: Reorganization
Chapter 13 Bankruptcy allows a person or sole proprietorship that has regular monthly income to prepare a Plan to pay back (some or all of their debt) over a period of 3 to 5 years. The Chapter 13 allows a debtor to catch up on any amounts past due on a mortgage over the 3 - 5 years of the Plan.
Not sure which chapter is right for you? Call our office today for a free consultation.
Frequently Asked Questions
What is Bankruptcy?
Bankruptcy is a legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy begins with a petition filed by the debtor. All of the debtor's assets are measured and evaluated. The person filing for Bankruptcy may claim exemptions in their assets to protect some or all of the equity in their assets. In a Chapter 7 proceeding, any assets that cannot be fully exempt may be liquidated and the proceeds would be used to repay some or all of the debt. In a Chapter 13 proceeding, the Debtor prepares a Plan whereby they detail how they will pay some or all of their debts over the life of the Plan. The amount that must be repaid is based upon the value of the non-exempt assets, the income and expenses of the Debtorâ€™s household and other factors.
Upon the successful completion of the bankruptcy proceeding, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.
What is an Exemption?
The Bankruptcy Code allows a Debtor to utilize one of two exemptions schemes, State or Federal. The State Exemptions in Pennsylvania are very limited, but if one is filing jointly with a spouse, may provide an advantage over the Federal exemptions in certain circumstances.
The Federal Exemptions provide a list of items that may be claimed as exempt and establish a maximum dollar amount of each exemption for each listed category of property.
An exemption is applied to the equity in property. Equity is the difference between what property is worth and any secured claims or liens on the property.
For example: Joe owns a 2012 Ford Escape worth $15,000.00. Joe owes Ford Motor Credit $10,000.00 on the Escape, and Ford Motor Credit is holding the title/noted as a lien holder on the title to Joeâ€™s Ford Escape, this makes Ford Motor Credit a secured creditor. Under those facts, there is $5,000.00 of Equity in the Ford Escape ($15,000 Value - $10,000 secured debt).
Will Bankruptcy eliminate Secured Claims?
Typically, Bankruptcy does not eliminate secured claims. If there is a mortgage on your house and you want to keep your house, you will have to continue to make the mortgage payment. If you have a car and have a loan on the car and the car was pledged as collateral for the loan, then you will have to continue to make payments on the car to keep the car. There a limited circumstances where one may be able to eliminate a 2nd or 3rd mortgage on a residence in a Chapter 13 Bankruptcy.
Which Bankruptcy type or chapter should I file?
It depends on your specific situation and circumstance as to which chapter may suit your needs. The best way to find out is to give our office a call to set up a free consultation. The attorney will evaluate your situation and determine which chapter, if any, would be most appropriate for you. Sometimes a Bankruptcy filing is not the answer, if that is the case, we will tell you that too.
How often can you file for bankruptcy?
A Chapter 7 Bankruptcy can be filed every 8 years from a previous Chapter 7 filing, or 6 years from a prior Chapter 13 filing.
A Chapter 13 Bankruptcy can be filed 4 years from a prior Chapter 7 filing, or 2 years from a prior Chapter 13 filing.
What do I need to begin the bankruptcy process?
The first step is just calling our office and setting up a free consultation. Once you meet with the attorney and he evaluates your situation, he will give you specific list of all of the information you will need to provide.
Following is a list of some of the documents you will need:
- Mortgage Statements and any Foreclosure or Sheriff Sale Information
- Retirement/Pension Statements and all investment accounts
- Life Insurance Policy Statements
- Vehicle Statements/Coupon Books
- Proof of debt
- Proof of Income
- Federal Tax Returns and W-2's
- Bank statements
- Current Domestic Support Court Order
What happens if one spouse files for bankruptcy and not the other?
If there is joint debt, the spouse who did not file for Bankruptcy will still be obligated to pay for any debt in joint name. If you are married, it is important to discuss whether or not there is joint debt and whether or not both spouses should file at the same time.
Can all of my debts be discharged?
No. There are some debts that are nondischargeable such as taxes, fines, student loans, and domestic support obligations. There are instances where these debts may be dischargeable, but in general, they will not be.
Will I lose all of my assets and property if I file for Bankruptcy?
No. There are Federal or State exemptions that allow individuals to keep certain property up to a certain amount.
Do I have to file bankruptcy on all the accounts I owe, or can I keep some?
You are required to list all debts that are owed at the time of filing. There are options that may allow you to opt to keep some debts by "reaffirming" the specific debt, but that is typically only done with secured claims and lenders typically do not offer reaffirmations on credit cards or other unsecured debt.
Will I lose my retirement accounts?
Normally you will not. There are broad exemptions that will allow you to protect your retirement accounts. Unless you made significant, unusual contributions to your retirement accounts prior to the bankruptcy filing, you will be able to retain them.
Will I lose payments from Social Security?
No. Social Security benefits are protected from assignment or garnishment.
Will I lose my home if I file for bankruptcy?
A pending foreclosure is one of the main reasons an individual would file a Chapter 13 Bankruptcy. So, if you are behind on your mortgage, in a Chapter 13 Bankruptcy, you have the ability to stop the foreclosure, and propose a Plan to cure the past due amounts.
If you are current on your mortgage, then you may keep your home, as long as you continue to make your payments on the mortgage and there are sufficient exemptions to protect the equity in the home, in either a Chapter 13 or Chapter 7 case.
Can a creditor continue to contact me after I've filed for bankruptcy?
No. Once you file for bankruptcy you will be protected from the creditors continuing to collect any debts that were owed at the time of filing the bankruptcy. If the creditor contacts you after it receives Notice of the filing of your bankruptcy make sure to give them your case number and filing date. Contact your attorney if the creditor persists to contact you after you have given them the filing information.
Who lets my creditors know I've filed for bankruptcy?
The Bankruptcy Court will mail out notice to all of your creditors listed on your petition and schedules once your §341 Meeting of Creditors is scheduled.
What does a Trustee do?
A bankruptcy trustee is an official appointed by the office of U.S. Trustee to administer bankruptcy cases. The Trustee's tasks include reviewing the debtorâ€™s petition and schedules after they are filed with the court, conducting the §341 meeting of creditors and managing the filer's bankruptcy estate. The Trusteeâ€™s main goal is to identify and liquidate assets for the benefit of creditors.
What is a reaffirmation agreement?
A Reaffirmation Agreement is an agreement between you and your lender with respect to a secured claim. As we previously discussed, a secured claim is a claim on which you have pledged collateral to the lender, i.e. a home or a vehicle. That pledge of collateral â€œsecuresâ€ your personal promise to pay. Therefore, if you do not pay the debt owed to the creditor, then they have the right to repossess and sell the collateral. The Bankruptcy filing eliminates your personal obligation to pay the debt, however, it does not eliminate the lien created by your pledge of the collateral. Therefore, if you want to keep the collateral, you must continue to pay the creditor the regular monthly payment when it is due. The Reaffirmation Agreement is a formal Agreement that must be approved by the Bankruptcy Court that indicates you and the creditor have reached an agreement as to how the loan will be treated, post-bankruptcy.
** We are a debt relief agency. We help people file for relief under the Bankruptcy Code **