Chapter 13 Bankruptcy

Are you considering filing for Chapter 13 bankruptcy in Philadelphia, Pennsylvania? Our bankruptcy attorneys are here to help you. There are several benefits of filing for bankruptcy. Despite common myths about how bankruptcy damages your credit, in most circumstances, consumers’ credit scores often improve after having their qualified debts discharged.

If you are interested in learning more about various debt relief programs offered to Philadelphia residents, contact our bankruptcy attorneys for legal guidance and advice. We provide free legal consultations to Philadelphia residents interested in filing Chapter 13 bankruptcy.

Key Differences Between Chapter 7 and Chapter 13 Bankruptcy

Chapter 13 bankruptcy is often referred to as the “wage-earners” plan. It enables consumers with steady income to repay all or a portion of their debts to creditors within a 3 to 5 year period.

Under chapter 7 bankruptcy, all qualified debts are completely discharged within 60 to 90 days of attending the creditor’s meeting. Debtors are also allowed to claim exemptions under state or federal law to protect certain property from liquidation to repay debts to creditors. Under chapter 13 bankruptcy, all qualified debts are discharged upon the successful completion of a repayment plan.

Which Chapter is Right for You?

There are several benefits of filing for chapter 7 and chapter 13 bankruptcy. Depending on your annual income, you may be required to file for chapter 13 bankruptcy. A key benefit of filing for chapter 13 bankruptcy is being able to keep your home if you are behind on mortgage payments, while making the regular mortgage payments throughout the duration of the repayment plan.

How to File for Chapter 13 Bankruptcy in Pennsylvania

The means test under chapter 13 bankruptcy affects the length of your repayment plan. A debtor usually proposes a 3 to 5 year repayment plan to the bankruptcy court. The debtor’s monthly disposable income will need to be calculated to determine how much money he/she can afford to pay creditors throughout the duration of the plan. If the debtor earns more than the median income for their family size in Pennsylvania, he/she will have to file a 60 month repayment plan. Debtors who earn less than the median income for their state of residency family size must file a 36 month plan.

Once we assist you through the means test, you will take a credit counseling course before filing your petition. Upon providing proof that you completed the credit counseling requirement, our Philadelphia bankruptcy attorney will begin to prepare your bankruptcy petition.

If you retain our attorneys as counsel, we will schedule a consultation with you to thoroughly review your financial history. We will act with haste to file your petition in order for the automatic stay to be implemented to protect you. The automatic stay will stop creditor harassment, wage garnishment, collections and sheriff sales.

You will be required to attend a “341 meeting of creditors.” During the hearing, an appointed trustee will ask you various questions regarding your financial history including information about your repayment plan. After this meeting, you’re appointed trustee and creditors will appear in court to discuss your repayment plan prior to approval.

Once your plan is approved, you will make fixed payments to the bankruptcy trustee over a designated period of time. The trustee will be charged with distributing the payments to your creditors. All of your qualified debts will be discharged upon the completion of your repayment plan.

Which Debts are Dischargeable in Chapter 13 Bankruptcy

Not all debts are discharged upon the completion of your Chapter 13 repayment plan. Many eligible debts will be discharged however such as card debts, medical bills, personal loans, unsecured loans and deficiency debts on foreclosures and vehicle repossessions.

Debts that are not discharged under chapter 13 bankruptcy consists of the following: back child support and alimony, student loans and recent back taxes.

How to Repair Your Credit After Bankruptcy

You can utilize several financial tools to repair your credit after declaring bankruptcy. For example, there are credit reporting agencies that factor in non-traditional bill payments into your credit report.

In addition, you can obtain a credit card with a low limit to make charges on in which you have the cash to immediately pay off your card with. Your interest rate may be high during the first year of using the card, but if you routinely pay your bill on time, you can request for the credit card company to lower your interest rates. Alternatively, if you do not carry a balance on the card you will not have to worry about the high interest charges while rebuilding your credit score.

Rebuilding your credit will take time and patience. Make sure you stay away from predatory lending scams and routinely review your credit report to check for errors impacting your report. Our attorneys are here to help you get out of debt and stay that way.

Contact Our Philadelphia Chapter 13 Bankruptcy Attorneys

Our Philadelphia bankruptcy attorneys have years of experience helping consumers find the right debt relief options that best suit their financial situation. You do not have to go another day worrying about how you are going to make ends meet. We can help end creditor harassment and regain your financial freedom. Contact us today to schedule a free consultation.

“We are a debt relief agency. We help people file for relief under the U.S. Bankruptcy Code.”