Bankruptcy in Pennsylvania
Are you contemplating bankruptcy or hiring a bankruptcy attorney in , Pennsylvania? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.
Types of Bankruptcy in , Pennsylvania
Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In , PA to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.
Pennsylvanians have two courts with jurisdiction over this type of legal concern. Summons to appear can come from the United States Bankruptcy Court of the District of Western or Eastern Pennsylvania.
Chapter 7 Bankruptcy
Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.
The United States Bankruptcy Court of the Eastern District of Pennsylvania provides a checklist. Along with the usual information about your finances, a $338 fee is due upon filing. If that represents a financial burden, it can instead be paid in installments. Additional documents due initially include:
- Statement About Your Social Security Numbers
- Certificate of Credit Counseling and Debt Repayment Plan
- Creditor Matrix Pursuant to Local Bankruptcy Rule 1007-3
- Voluntary Petition for Individuals Filing for Bankruptcy
- Initial Statement About an Eviction Judgment Against You
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.
According to the United States Bankruptcy Court of the Eastern District of Pennsylvania, businesses usually file for Chapter 11. Approval of a petition depends on the endorsement of the repayment plan. Unlike most bankruptcies, a trustee is not necessary unless a judge orders one to get involved.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In , PA after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.
Filing for Chapter 13 comes with a fee of $313 payable to the United States Bankruptcy Court of the Eastern District of Pennsylvania. The timing of your paperwork matters because failing to file within time limits can result in a dismissal of your case.
The Bankruptcy Process in , Pennsylvania
There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.
In to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.
Pennsylvania law has some exemptions for your property, but federal options are more generous. You can choose property up to $300 regardless of its classification, but this is low compared to other states. Other categories allowed under legislation at the time of writing include:
- Pensions and retirement funds
- Wages held by an employer
- Clothing, religious texts, and school textbooks
- Public benefits like workers’ compensation or unemployment
- $100 per month from insurance payouts or annuities
At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.
Work With an Experienced , Pennsylvania Lawyer
Hiring a local bankruptcy lawyer in during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Pennsylvania attorney can also offer you guidance to improve the outcome of your case.
Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Pennsylvania state lines.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!