In Philadelphia, there are 26 nonprofit public interest legal organizations that provide a wide variety of legal services to Philadelphians whose incomes fall below the federal poverty guidelines. These organizations specialize in delivering an evaluation and, if needed, representation in a legal problem that clients present. In Philadelphia, poor individuals are able to obtain excellent and significant legal representation from the experienced and dedicated staff members of these legal services organizations.

The Consumer Bankruptcy Assistance Project (CBAP) offers expert legal representation in debt counseling linked to pro bono Chapter 7 bankruptcy to Philadelphians with low incomes. Some unfamiliar with the challenges of living below the federal poverty guidelines are confused when learning about CBAP’s mission.

It is precisely the population that CBAP serves that may need the power of Chapter 7 bankruptcy the most. Our clients face financial ruin due to multiple reasons. They are attempting to stretch inadequate incomes to cover their bare essentials such as food, rent, medications and utility bills. At the same time, our clients suffer further financial difficulties as the result of unanticipated catastrophic life events, such as a change in marital status, interrupted child support, injury on the job or loss of employment, serious illness or funeral costs.

At any given time, CBAP has approximately 20 percent high-priority cases that require quick legal action to provide individuals with substantial relief. One of our recent clients, a 45-year-old woman, sought legal assistance because she was overwhelmed by her utility bills. Her electricity had been turned off and, in her case, this was a life-threatening situation. Our client required consistent nebulizer treatments to control her severe asthma.

In accordance with the Pennsylvania regulations governing public utilities, the local utility companies permit customers to maintain their utility service if they are able to provide medical certification from their doctor stating that they have a serious medical condition. Customers may receive a limited number of certifications, which will prevent utility service termination. Our client had surpassed the permitted number of certifications and had lost her electric service and, in addition, she had received notification that her water service was soon going to be terminated. CBAP assisted the client in filing for a Chapter 7 bankruptcy.

Under Sections 362 and 366 of the Bankruptcy Code, utility service must be restored. Much to the client’s delight and relief, within 24 hours, the electric company had restored her electric service. Because the electricity was re-established, the Philadelphia Water Department permitted the client to enter a payment agreement to maintain her water service. Her discharge, as set forth in Section 727 of the Bankruptcy Code, provided her with a fresh start for her financial situation.

CBAP’s clients have difficult financial problems and inconsistent income to address their financial situations. But, at times, these clients are able to tackle their debts and financial circumstances in a variety of ways. After obtaining more information on their legal rights through debt and budget counseling, some individuals realize that they simply do not have the income to pay their creditors since they must have income to pay for their essentials. These clients do not carry any secured debt or have bank accounts so they have little risk of successful collection attempts. Other clients successfully enter into utility company payment plans after reviewing their monthly budgets and carefully examining their options. Still, other clients decide to file for Chapter 7 bankruptcy because it is their only legal option available to stabilize their finances for the future.

CBAP’s clients generally face multiple thorny and complex legal issues that emerge in the course of their bankruptcy case. This year, CBAP represented a 60-year-old woman who was very ill, required a wheelchair and was living alone in her home. Under the Bankruptcy Code, a debtor may own a home provided it does not have too much equity. This particular client’s home was in such poor condition, it had a market value of $9,000. The woman needed legal assistance because her electricity had been shut off, she had a $52,000 lien against her property due to an unpaid medical bill along with several other liens, and her financial stress was contributing to her deteriorating health.

CBAP filed a Chapter 7 bankruptcy petition for the woman. Again, under Section 366 of the Bankruptcy Code, her electricity service was restored. Furthermore, under Section 522 of the Bankruptcy Code, CBAP was subsequently able to have the liens removed from her home. Under Section 362 of the Bankruptcy Code, the client greatly benefited from the automatic stay. All collection activity ceased, the client was able to stabilize her finances and the Chapter 7 bankruptcy profoundly improved her quality of life.

In 2012, the Consumer Bankruptcy Assistance Project is celebrating its 20th year of operations offering much needed financial literacy services linked with pro bono Chapter 7 bankruptcy representation. We will continue to assist Philadelphia residents as they utilize the power of the Bankruptcy Code to eliminate their debts and improve their lives. •