Chapter 7

Chapter 7 Bankruptcy

Filing for bankruptcy in Philadelphia, Pennsylvania can be a complicated process. Our bankruptcy attorneys are here to help inform you about your debt relief options. We invite you to contact us today to find out how filing for chapter 7 bankruptcy can help put you on the road to financial freedom. Read on to learn more.

Difference Between Chapter 7 and Chapter 13 Bankruptcy

The main difference between chapter 7 and chapter 13 bankruptcy is the chapter 13 Plan of reorganization. With this effective tool, our attorneys allow our clients to repay such debts as mortgage arrears and taxes over a 3-5 year period. This enables our clients to stop aggressive collection activity including foreclosures and the sheriff sale of their home.

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. Chapter 13 allows you to keep your home while you make regular mortgage payments.

If you do not have the financial resources to complete a repayment plan, it may be in your best interest to file for chapter 7 bankruptcy. If you would like to keep your home and make reduced payments, it may be appropriate to file for chapter 13.

How to File for Bankruptcy in Pennsylvania

In order determine which chapter of bankruptcy is most appropriate based on your income, our attorneys will help you through “the means test.” The means test requires consumers to meet a specific monetary thresholds to be eligible for certain chapters of bankruptcy. The threshold is based on Pennsylvania’s median family income listed for a specified family size.

If your income is higher for your specified family size, you can make qualified deductions (housing, food, medical care, clothing, transportation) from your income to qualify to file for chapter 7 bankruptcy. If you still do not qualify, you may want to consider filing for chapter 13 bankruptcy.

Once we complete your means test, you will complete a credit counseling course before filing your petition. Upon completing the credit counseling requirement, your Philadelphia bankruptcy attorney will begin to prepare your bankruptcy petition.

Our bankruptcy attorneys will collect all of your financial information necessary for filing your petition. Once your petition is filed, an automatic stay will be implemented to protect you from creditor harassment and collection activity.

You will be appointed to a trustee to oversee your case. The trustee will assume legal control of your assets and debts not covered under your bankruptcy exemptions.

You will be required to attend a “341 meeting of creditors.” During the hearing, the trustee will ask you various questions regarding your financial history. Within 60 to 90 days of your creditor’s meeting, your qualified debts will be discharged under court order if no objections are made by your creditors.

Bankruptcy Exemptions

Pennsylvania and Federal bankruptcy exemption laws exist to allow you to keep certain assets in bankruptcy like equity in your house, cars and personal belongings. Let our attorneys evaluate which set of exemptions will allow you to keep the assets that you need.

Which Debts are Dischargeable in Chapter 7 Bankruptcy

Filing for chapter 7 bankruptcy allows you to discharge qualified secured and unsecured debts. Dischargeable unsecured debts consist of the following: credit card debt, medical bills, personal loans, some income taxes, unsecured loans, deficiency debts on foreclosures and vehicle repossessions.

Dischargeable secured debts consist of the following: home mortgage, car loans, and store charges which contain a security agreement.

How to Repair Your Credit After Bankruptcy

Despite the common myths you may have heard about how declaring bankruptcy impacts your credit, several of our clients have been able to repair their credit within months of having their debts discharged through bankruptcy. It usually takes anywhere between 18 to 24 months before a bankruptcy declarant can obtain a mortgage or car loan.

There are several tools you can use to help repair your credit. For example, you can start by using a secured credit card to purchase goods/services. A secured credit card requires you to make a deposit against the card’s credit limit. You will use the card like a normal credit card to make purchases and you will be required to pay the balance owed when your statement is due. You will use the deposit you placed on the card to pay the balance.

Secured credit card lenders report your credit activity to the three main credit bureaus: Equifax, Experian, and TransUnion. You can begin to repair your credit by making timely payments.

You can also use store charge cards to help rebuild your credit. Obtain a credit card with a low credit limit. At the end of each month, pay the maximum amount owed. If you feel yourself struggling to maintain your payments, cut the card up immediately and go back to using cash.

Contact Our Philadelphia Bankruptcy Attorneys

Our Philadelphia bankruptcy attorneys have years of experience helping consumers find the right debt relief options that best suit their financial situation. Contact us today to schedule a consultation.

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