Delaware County, PA (Delco) Bankruptcy Lawyer
Filing for bankruptcy can be frightening for an individual in a dire financial situation. However, if you do not have any viable alternatives, a petition for bankruptcy could be just what you need to get back on your feet.
You could have numerous good reasons to file for bankruptcy, including high debts, strained income, and avoiding foreclosure, among others. The form of bankruptcy you need to file will depend on your unique situation. Chapter 7 and Chapter 13 bankruptcy are both common and can be very helpful to those struggling financially. However, you should discuss your case with an attorney, as there are debts that can and cannot be discharged. The advantages of filing for bankruptcy often outweigh the drawbacks and include getting out from under your debt, securing your assets, and getting a fresh start. If you or a family member needs legal assistance to file for bankruptcy, you can contact an experienced bankruptcy lawyer in Delco for help.
To schedule a free legal consultation, call our bankruptcy lawyers at Young, Marr, Mallis & Associates at (215) 515-6389.
Reasons to File for Bankruptcy in Delaware County, PA
Nobody wants to file for bankruptcy, but it might be the best way to remedy your financial situation. Contrary to popular belief, filing for bankruptcy is not some sort of punishment imposed on those who have made unwise financial decisions. On the contrary, bankruptcy is a solution to your financial woes, and our bankruptcy lawyers can help you get started.
One reason to file for bankruptcy is to reorganize your debts so that they are more manageable and easier to pay off. Reorganization can be a lifesaver for those drowning in a sea of debts ranging from mortgages to credit cards to medical bills.
One of the biggest reasons to file for bankruptcy is to get the courts to discharge debts you cannot pay. A discharged debt is wiped clean, and the debtor is no longer personally liable to pay the debt. Keep in mind that not all debts can be discharged (this is discussed in more detail below), and a discharge is only possible through a court order.
You might also want to file for bankruptcy in order to avoid foreclosure. When homeowners fall too far behind on mortgage payments, the bank might initiate foreclosure proceedings and seize the house. By filing for bankruptcy, you might be able to hold on to your house while our bankruptcy attorneys help you reorganize and manage your debts.
Types of Bankruptcy Proceedings We Handle for Delaware County Residents
Bankruptcy is a legal proceeding used by people facing a mountain of debt they believe they cannot manage. Successfully filing for bankruptcy allows a debtor to be released from personal liability by discharging various types of debt.
One common advantage of filing for bankruptcy is the right to an automatic stay after filing. An automatic stay prevents creditors from contacting a debtor and transferring the debtor’s unpaid bills to a collection agency. This can provide the debtor with much-needed relief from the burdens of managing immense debt. However, it is important to understand that besides the automatic stay, one form of bankruptcy may offer different protections than another.
The following is a list of types of bankruptcy that a debtor should consider filing if they are having great difficulty managing their debt.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy permits a debtor to liquidate certain assets that will then be sold by a bankruptcy trustee to pay off creditors. Chapter 7 bankruptcy can seem frightening because of the possibility of having to sell a property that holds a substantial amount of monetary or sentimental value. However, some nonexempt assets cannot be sold off to satisfy creditors:
- Property that does not include your primary residence
- Musical instruments that you do not need for your business
- Valuable artwork
- Designer clothing
- A newly purchased vehicle
Chapter 7 bankruptcy is typically preferred by debtors that do not want to spend years handling a bankruptcy claim. This is because the filing and completion of a Chapter 7 bankruptcy typically take about 90 days. The possibility of discharging various types of debt within three months is an appealing scenario for many debtors that are mired in debt. A Chapter 7 discharge can include various items like medical bills, credit card bills, and even student loans in some cases.
It is also preferred by people who do not have a lot of assets to lose. For example, people who rent rather than own a home and use public transit instead of owning a car do not have to worry about losing major assets like homes and vehicles.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows a debtor to reorganize and consolidate their debt into a more affordable form. This form of bankruptcy is preferred by debtors that cannot manage their debt but still have a steady source of income. It is also preferred by those who have valuable assets they do not wish to lose, like homes, vehicles, or other property, since Chapter 13 tends to avoid liquidating assets.
To qualify for a Chapter 13 reorganization plan, you must provide a significant amount of information concerning your debts and finances. For example, you will need to detail all sources of income and your living expenses from month to month. Using this information, the debtor must suggest a repayment plan to pay off a substantial portion of their debt within five years.
It is important to note that creditors may challenge your bankruptcy petition if they do not agree with the terms of your reorganization plan. This is because if a debtor satisfies the terms of the repayment plan for five years, the remaining portion of their debt will be discharged. An opposing creditor may believe that the amount that would be paid towards your debt at the conclusion of the repayment plan would not be enough.
Chapter 7 bankruptcy and Chapter 13 bankruptcy are two of the most common forms of bankruptcy utilized by debtors. However, there are other forms of bankruptcy that will be more advantageous, depending on your particular situation. For example, if you are a business owner and you wish to keep your business from closing, filing for a Chapter 11, bankruptcy may be the right choice for you.
Debts That Can and Cannot be Discharged Through Bankruptcy in Delaware County, PA
As mentioned above, one of the biggest advantages of filing for bankruptcy is that the courts can discharge many debts, and you might no longer be personally liable to repay them. However, under 11 U.S. Code § 523(a), certain debts are exempt from being discharged.
Debts That Can be Discharged
Numerous debts may be discharged when you file for bankruptcy. Many people who file for bankruptcy have a myriad of debts that they cannot afford to pay. Some debts are quite large, while others are smaller. Filing for bankruptcy could discharge many of these debts, so you can start over with a clean slate. Our bankruptcy lawyers can help you discharge as much of your debt as possible.
Debts from credit cards, medical bills, and personal loans are some examples of bigger debts that could be wiped out when you file for bankruptcy. In many cases, these debts are the main reasons people file in the first place.
While smaller debts might be manageable on their own, they might be insurmountable when you have to pay them all at once. Some relatively smaller debts you can have discharged include past due utility bills, past due rent, and even overpayments from government assistance programs like welfare or Social Security. You can also have various business debts from a failed business venture discharged.
Debts You Cannot Discharge
Certain debts cannot be discharged. The law prohibits certain debts from being discharged because doing so would be against public interest or policy. For example, many debts owed to the government or that were incurred through fraud cannot be discharged. Our bankruptcy attorneys can help you figure out which of your debts cannot be discharged and how to manage them.
Many debts owed to the government or imposed by some sort of government or court order are usually unable to be discharged. Unpaid taxes, child support, alimony, and orders of restitution usually must be paid and cannot be discharged through bankruptcy.
Additionally, debt resulting from bad behavior is often unable to be discharged. If you obtained credit through fraud, you cannot discharge it even if that credit could normally be discharged had you not used fraudulent means. If you owe money to pay for injuries caused by your willful and malicious behavior, or you caused injury or death by driving under the influence, you cannot discharge the debt.
What Happens After Filing for Bankruptcy in Delaware County, PA
Perhaps the biggest fear people have when filing for bankruptcy is that their credit will be tarnished forever. While it is true that bankruptcy remains on your financial records, and your credit score will likely take a hit, it is possible to recover.
Often, people filing for bankruptcy already have trouble with credit and their credit scores. Filing for bankruptcy discharges many debts and makes rebuilding your credit easier. Things that can help improve your credit (e.g., paying bills on time and keeping credit card usage low) are easier to maintain after your once-overwhelming debts have been discharged.
Another problem people encounter after filing for bankruptcy is that getting new lines of credit or making large purchases becomes harder. For example, if you want to purchase a car, rent an apartment, or open a credit card, you might be subject to a credit check. Once your bankruptcy is discovered in your records, you could be denied. While this is less than ideal, many people have successfully rebuilt their credit within just a few years after bankruptcy.
Contact Our Experienced Delco Bankruptcy Attorneys to Handle Your Claim
To schedule a free legal consultation to discuss your bankruptcy options with our bankruptcy lawyers, contact Young, Marr, Mallis & Associates at (215) 515-6389.