Montgomery County, PA Bankruptcy Lawyer
Bankruptcy is a powerful tool that has helped countless Pennsylvanians regain financial stability and independence. By filing for bankruptcy, you can eliminate debts, prevent debt collectors from pursuing you, and stall or even prevent foreclosure proceedings. In the long term, bankruptcy can also give you the financial freedom you need to start fresh and rebuild better credit. Whether you file for Chapter 7 or Chapter 13, the Montgomery County bankruptcy lawyers of Young, Marr & Associates can guide you through every stage of the process with precision, professionalism, and care.
Bankruptcy is more common than you think, with thousands of Pennsylvanians filing every year. However, the bankruptcy process can be difficult to navigate without an attorney to help you. At Young, Marr & Associates, we have more than 30 years of experience handling bankruptcy filings throughout Montgomery County. We are here to manage your legal forms, prepare you for hearings, and uphold your rights while we walk you through bankruptcy laws and procedures. For a free consultation about bankruptcy in Montgomery County, contact Young, Marr & Associates online, or call us today at (215) 701-6519.
Why File for Bankruptcy in Pennsylvania?
There are many reasons to file for bankruptcy if you are dealing with persistent financial difficulty. The advantages and benefits of filing bankruptcy may include:
- Reducing or wiping out debts. Bankruptcy may allow you to shrink or eliminate various debts, including but not limited to credit card debts, medical debts, business debts, and more.
- Delaying or preventing foreclosure. Depending on what type of bankruptcy you file, you may have a chance to make up the missed payments that have put your house in danger of foreclosure. This could stop you from losing your home.
- Stopping your car from being repossessed. Losing your car can make it hard or impossible to commute, get to school, and move around freely. In some cases, bankruptcy may give you a chance to prevent repossession of your vehicle by repaying loan payments you have missed in the past. It may also be possible to lower your car payments in bankruptcy.
- Preventing debt collectors from garnishing wages, shutting off utilities, or taking other collection actions. A bankruptcy feature called the “automatic stay” pauses all debt collection activity. If a creditor wants to lift the stay and collect a debt, he or she must go through the process of obtaining the court’s approval first.
- Giving you the financial space to work on rebuilding your credit. Bankruptcy is designed to wipe out debts and give you a fresh start. Once your debts are under control, you can focus more energy on rebuilding better credit, instead of struggling to keep up with bills and expenses.
Types of Bankruptcy: Chapter 7 vs. Chapter 13
There are a few different categories of bankruptcy in Pennsylvania. Some are better suited to businesses (called “corporate bankruptcy”), while others can be used by individuals (called “personal bankruptcy”).
When it comes to personal bankruptcy, most people file either “Chapter 7” bankruptcy or “Chapter 13” bankruptcy, which are named after different chapters of the U.S. Bankruptcy Code. But how are they different, and which one is right for you?
Differences Between Chapter 13 and Chapter 7
Chapter 7 bankruptcies move more rapidly than Chapter 13 bankruptcies, typically taking about four to six months. Chapter 7 bankruptcies move so rapidly because, unlike Chapter 13, they do not involve financial reorganization plans.
The potential drawback is that, in Chapter 7, a bankruptcy trustee may liquidate property. However, you can use bankruptcy exemptions to protect certain assets and belongings. This may allow you to keep your car, your home, and other pieces of property.
After a Chapter 7 case ends, it will remain on your credit report for a period of 10 years, at which point it should be deleted from your record. However, you can start rebuilding your credit almost immediately after you file.
In Pennsylvania, the Chapter 7 filing fee is $335. However, you may qualify for a waiver if you meet certain income criteria.
Chapter 13 bankruptcies take more time to complete than Chapter 7: three to five years, depending on the details of your case. Chapter 13 takes longer than Chapter 7 because of its reorganization plan, which establishes terms by which you agree to repay certain creditors. Under your plan, you will provide payments to a bankruptcy trustee, who will then distribute your payments to your creditors. The advantage of the reorganization plan is that it gives you time to make up missed mortgage or auto loan payments. This could prevent foreclosure or stop your car from being repossessed.
Like Chapter 7, Chapter 13 allows you to discharge most debts at the end of your reorganization plan. Dischargeable debts in Chapter 13 bankruptcy include medical bills, credit card debt, personal loans, business debt, and potentially certain income tax obligations. After Chapter 13 debt is discharged, the bankruptcy will remain on your record for a period of seven years.
Note that the filing fee for Chapter 13 bankruptcy in Pennsylvania is $310.
What Bankruptcy Chapter Should I File?
The answer to this question depends on factors like why you are filing for bankruptcy and when you intend to file. For example, if your main reason for filing is to prevent foreclosure, Chapter 13 bankruptcy may give you the opportunity to pay off your mortgage arrearages, which might be able to save your home.
Because of the differences between Chapter 7 and Chapter 13, it also depends on financial factors. Two of the most important factors are:
- How much disposable income you have
- How your income compares to the median income in Pennsylvania
Chapter 13 requires you to make regular, timely payments as part of your three-year to five-year reorganization plan. This plan will be financed with your “disposable income,” which is any income that is left over after necessary expenses like housing, food, medical care, and taxes. Therefore, if you want to file Chapter 13 in Montgomery County, you’ll need to show that you have enough disposable income to complete a Chapter 13 plan successfully.
Since Chapter 7 does not require debtors to enter a payment plan, it is meant for debtors who have a greater level of financial hardship. Therefore, if you want to file Chapter 7, you will need to show that your income is below the median income in Pennsylvania.
A process called the “means test” will be used to evaluate your finances. To determine whether you qualify for Chapter 7 bankruptcy, the government uses Form 122A-2 (Chapter 7 Means Test Calculation). This bankruptcy form asks questions about your current monthly income, out-of-pocket healthcare allowance, transportation expenses, and other financial matters.
Montgomery County Bankruptcy Attorneys Can Help
Though bankruptcy may be common, that doesn’t mean obtaining a bankruptcy discharge is a simple or easy task. Bankruptcy law is notoriously complex, which is complicated further by the fact that there are different types of bankruptcy – plus certain differences between state and federal laws, such as Pennsylvania bankruptcy exemptions and federal bankruptcy exemptions.
For all of these reasons, it is imperative to work with an experienced Montgomery County bankruptcy lawyer who can guide you through the filing process with precision and skill. At Young, Marr & Associates, our bankruptcy attorneys have decades of experience assisting thousands of individuals with Chapter 7 and Chapter 13 in Pennsylvania. For a free consultation, contact our law offices online, or call (215) 701-6519 to get started.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.