How to File Bankruptcy in Philadelphia and Keep Your House + Car
Times of financial distress don’t have to result in the loss of your car and home. With the support of an effective bankruptcy lawyer, you can find solace in the knowledge that you can protect your property in Philadelphia by filing a petition for bankruptcy protection.
Young, Marr & Associates will work proactively with you to determine the ways bankruptcy can help you keep your home and car while obtaining appropriate debt relief. They are available to file emergency bankruptcy petitions, even on the same day if necessary. Call us at (215) 607-7478 to schedule a free and confidential consultation.
Protect Your Car and Home in Philadelphia From Creditors
Every bankruptcy is different in that each is tailored to your specific income and debt status. Many people incur debt when purchasing property, including significant amounts from buying a home or vehicle. The U.S. Bankruptcy Code is designed to protect the rights of debtors by keeping important assets, such as their homes and cars, intact while eliminating or discharging burdensome, high-interest debts typically associated with unsecured assets such as credit cards.
The exemptions included in the U.S. Bankruptcy Code provides debtors with an amount or value to subtract from the outstanding debt to protect certain properties from the sales needed to pay creditors. An experienced bankruptcy lawyer will typically learn more about your obligation to run an exemptions analysis that will give a realistic picture of whether bankruptcy protection can help you protect your home and car. The estimated calculation of your exemptions will depend on the value of your property, as well as on the “equity” of your property, a legal concept that refers to the difference between the fair market value and the amount owed.
Pennsylvania gives debtors the ability to choose between state and federal bankruptcy exemptions. As of April 1, 2019, federal exemption amounts increased and are now considered more liberal than the exemptions that came before. However, there are multiple factors a qualified attorney can analyze based on your circumstances to decide which exemption will fit best in your financial situation. With the help of your attorney’s expertise, you can make sound and informed decisions.
Types of Bankruptcy Petitions: Chapter 7 and Chapter 13
The type of bankruptcy you file will also have an impact on your ability to keep your home and car in Philadelphia. While Chapter 7 offers certain advantages your attorney can explain, Chapter 13 gives debtors the opportunity to adjust their finances without having to liquidate or sell their assets.
Filing for Chapter 7 does not take a long time, but you should expect your property to be sold or “liquidated” to pay certain creditors. Since Pennsylvania doesn’t have what is known as a “homestead” exemption, you home can be sold to pay creditors if you are even a little behind on your payments. However, if you are current on your mortgage and car payments, a Chapter 7 bankruptcy filing doesn’t have to result in you losing your home or car. Since every bankruptcy is tailored to the debtor’s financial circumstances, your choice of bankruptcy type can depend on many other factors.
In Chapter 13 bankruptcies, you can catch up on your mortgage and other payments through what is known as the Chapter 13 Payment Plan. Chapter 13 bankruptcies usually involve the payment of adjusted debts based on future income. While the debtor can sell some assets to make payments, there is no obligation to “liquidate” assets as long as the court approves the scheduled payments. Chapter 13 debtors are generally able to keep and use all property (including primary residences and vacation homes) and pay all debtors according to the agreed-upon plan.
Federal Car Exemptions
Exemptions can become complicated because they involve some serious math. These complications typically arise when determining the market value of property. However, in the case of cars, the calculation can be easy because the value is based information in a comprehensive publication known as the Kelley Blue Book. Based on the value listed in the book, you may be allowed to subtract the following exemptions:
Motor Vehicle Exemption
Section 522(d)(2) of the U.S. Bankruptcy Code gives debtors a $4,000 exemption on one of your cars. For example, if your car’s Blue Book value is $6,000, this exemption can reduce your debt to $2,000.
“Wild Card” Exemption
In addition to the motor vehicle exemption, there is a miscellaneous exemption – known as a wild card exemption – of $1,325 frequently applied to cars. Based on the example above, between the motor vehicle exemption and the wild card exemption there will only be a remainder of $675 needed to satisfy your car debt. Depending on your circumstances, other exemptions can be applied to fulfill the remainder car debt.
Federal Home Exemptions
Pursuant to Section 522(d)(1) of the U.S. Bankruptcy Code, you may be entitled to a Federal Homestead Exemption, which can be used to protect your home in Pennsylvania. As of April 1, 2019, debtors are typically allowed to exempt $25,150. If you are married and filing jointly, then the exemption can be doubled to $50,300.
The homestead can only apply to your principal residence. However, you are not required to occupy the primary house. Keep in mind that this exemption does not apply if you reside in a rented home.
Philadelphia Bankruptcy Attorneys Skilled in Keeping Home + Car
Philadelphia residents worried about losing their home or car should not wait to talk to the team of Young, Marr & Associates. Don’t wait for collection actions to reach a point of no return in the foreclosure or repossession process. Our fees are worked out within your budget. To schedule a free and confidential consultation, call us at (215) 607-7478.