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Greensburg Pennsylvania Legal Blog

Personal bankruptcy mostly impacts middle class

Sometimes, consumers in Pennsylvania and elsewhere end up experiencing serious financial trouble. In these situations, seeking personal bankruptcy may be the best option. Although broke celebrities and failing companies often come to people's minds when they hear the word bankruptcy, the reality is that bankruptcy filings occur most frequently among Americans in the middle class.

In many cases, the middle-class individuals who decided to file for bankruptcy had attended college, worked hard, purchased a home and even had children. However, their financial situations took a turn for the worst due to the loss of a job or even a medical problem. In fact, medical debt is apparently involved in the majority of U.S. bankruptcy filings. Other situations that may lead to bankruptcy include a divorce or the death of a primary or sole breadwinner.

Alimony deduction's disappearance may affect divorce mediation

Dissolving a marriage in Pennsylvania is not a simple process. However, it can be even more harrowing from a financial standpoint for the spouse who decided to stay home with the children and thus does not generate any income. This is true whether the couple decide to go through divorce mediation or go to trial to tackle their financial issues. Fortunately, alimony may help the non-earning parent financially after the marital breakup. Unfortunately, the future disappearance of the alimony deduction may cause more financial issues for both spouses, which is why it has sparked criticism.

For over 75 years, it has been possible to deduct alimony payments from the paying spouse's income. At the same time, these payments have been treated as taxable income to the spouse receiving them. However, for tax years after 2018, this deduction will no longer exist.

Tips to help naviagte personal bankruptcy successfully

Nobody embarks on adulthood with the goal of becoming bankrupt. Unfortunately, sometimes filing for personal bankruptcy is unavoidable due to credit card debt that has gotten out of hand, job loss or medical bills. Here are a few tips for dealing with bankruptcy in Pennsylvania.

First, understanding the two principal types of personal bankruptcy is paramount before moving forward. These are Chapter 7 and Chapter 13 bankruptcy. With the former, a consumer will likely be able to discharge most unsecured debt, based on whether he or she qualifies under a certain means test. Meanwhile, with the latter, the consumer can typically keep his or her assets but will be required to meet the terms of a repayment plan proposed by the consumer and approved by the court. The plan generally remains in effect from three to five years.

The health care planning tools you may need in the future

Pennsylvania readers know that estate planning is an important step, but some people need more than just a will. A will is the basic step in having an estate plan, but you would be wise to think about more than just having a plan for deciding where your assets and money will go.

Many people find it beneficial to add some health care planning measures to their estate plan. Through a living will and a health care power of attorney, you can outline what type of medical care you may want in the event of incapacitation in the future. Just like you have the right to decide what you want to happen to your property, you have the right to decide what you want to happen to your body.

Property division involving retirement funds can be tricky

An increasing number of married couples are deciding to call it quits near retirement age. After all, by this stage of their lives, their children no longer live with them, so child custody is not an issue. However, the main issue is whether the divorce process, which involves property division, will prevent them from being financially prepared for their golden years in Pennsylvania.

During a divorce proceeding in Pennsylvania, a couple has to divide their assets in an equitable manner. These assets can include a 401(k) plan, an individual retirement account (IRA), 457 account, a 403(b) account or a pension. Unfortunately, a gray divorce, or a divorce that happens later in life, endangers both parties' retirements, as the two individuals might end up living on only half of the income they had expected to receive during retirement.

If counseling doesn't work, try divorce mediation

Getting divorced in Pennsylvania can be one of the most difficult emotional and financial events one may experience. However, sometimes, it is unavoidable, in which case going through divorce mediation or traditional divorce litigation is necessary. However, in other cases, couples may want to try counseling first before filing divorce papers.

If a couple decides to try counseling as a last-ditch effort before getting a divorce, choosing a professional whose specialty is in family systems is critical. This type of counselor can help both spouses to evaluate where they came from. After all, where they came from informs how they see the world around them, including their value as well as their images of how a relationship should be.

Personal bankruptcy quite different from business bankruptcy

Sometimes, people in Pennsylvania find themselves struggling to stay on top of their debt. Fortunately, if they can no longer stay afloat, they no longer have to try to do so on their own. Filing for personal bankruptcy may provide the financial relief they so desperately need.

When people think about bankruptcy, Chapter 11 bankruptcy -- which companies file -- often comes to mind. This process involves reorganizing and financially restructuring until a company is in a better position to repay its debtors. However, the personal bankruptcy filing process is far different.

Property division steps may need to be taken after divorce, too

Navigating a marital breakup in Pennsylvania can certainly be emotionally trying, but it can be just as challenging financially. After all, divorce is essentially a process that untangles two lives that have become intertwined with each other perhaps over the course of years or even decades. However, the hard work that comes with divorce, such as facilitating fair property division, does not stop once the divorce has been finalized. A couple of essential steps are important to take after the breakup is final, too.

First, when it comes to retirement accounts, equalizing them or dividing them properly after the divorce is important. This is possible by making sure that a prepared QDRO, or a qualified domestic relations order, is implemented. It is not enough for a judge to sign this type of judgment. Rather, it has to be executed appropriately so that pension and/or 401(k) funds end up in the proper places.

Have questions about collaborative divorce? Keep reading

Like many other couples in Pennsylvania, you and your spouse may have agreed to part ways. Because you have children, you want to make sure that you make the divorce process as stress-free and smooth as possible.

You may consider using mediation to help you reach an agreement, but after hearing about collaborative divorce, you want more information about it in order to determine whether it would provide you more benefits and a better result. If this sounds familiar, the information below may help you make your choice.

Dogs treated as assets during property division

Man's best friend can clearly add value to the lives of a married couple's lives, so understandably, the couple may be at odds about who gets to keep the dog following a divorce. In family court, dogs are treated as assets during the property division process in Pennsylvania. However, the spouses can decide how they want to handle the ownership of such an asset, in a manner that satisfies both sides.

For instance, perhaps both spouses are attached to Rufus. They can come up with their own joint custody agreement involving the dog during their divorce proceeding. With this agreement, they can essentially send the pet back and forth between them so that it spends time with both parties in their homes. If the exes are not on speaking terms, they can even drop the dog off at the other party's house when the other party is not home or make other suitable arrangements.

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