Doylestown, PA Bankruptcy Lawyer
Every year, thousands of people file for bankruptcy in Pennsylvania. The reason is that bankruptcy can erase your debts, lower the payments you owe, protect your personal property, and stop collection actions in their tracks. Depending on the circumstances, bankruptcy may even be able to stop your home from being foreclosed on, or prevent your car from being repossessed. If you live in the Doylestown, PA area and you’ve been struggling to get your debts under control, the Doylestown bankruptcy lawyers at Young, Marr, Mallis & Associates can help you file bankruptcy to turn your financial situation around.
At Young, Marr, Mallis & Associates, we have more than 30 years of experience working with individual debtors, married couples, and business owners to file Chapter 7 bankruptcy, Chapter 13 bankruptcy, and explore bankruptcy alternatives. We’re here to help you through every step of the process – from choosing which chapter to file, to determining whether to file jointly or separately, to completing federal bankruptcy requirements like credit counseling and debtor education. We can even help you understand strategies to rebuild credit after bankruptcy. For a free consultation about bankruptcy in Doylestown, contact us online, or call Young, Marr, Mallis & Associates at (215) 701-6519 today.
What Are the Benefits of Filing for Bankruptcy?
If you feel as though you are “drowning in debt,” bankruptcy may offer a financial life preserver. When carefully timed and skillfully handled, personal bankruptcy can put you in a healthier financial position than you were in before filing. Depending on what chapter you file, what types of creditors you owe money to, and other factors, bankruptcy allows you to pay off or obtain relief from various debts that may be causing you hardship.
While most people know that bankruptcy can help with debt, few people realize how many debts can be reduced or wiped out with bankruptcy. In addition, bankruptcy offers other features that can be of even greater benefit, such as possible foreclosure prevention. Continue reading to learn more about how bankruptcy erases debt, delays collection actions, and offers an opportunity to start fresh.
Erase Your Debts
Statistically speaking, debt relief is the leading reason Americans file for bankruptcy. In a study cross-referencing data culled from the U.S. Census, the Commonwealth Fund, the Centers for Disease Control and Prevention, and U.S. Federal Court records, it was determined that medical bills are the number one cause behind American consumer bankruptcy filings. This has been a trend since at least 2005, when another study revealed that 46% of bankruptcies – nearly half – were prompted by medical expenses.
If you are among the many Pennsylvanians who need to get rid of medical bills, there may be good news: your medical debts, like many others, can be wiped out by bankruptcy. Debts that bankruptcy eliminates are called “dischargeable” debts, because they are included in the bankruptcy “discharge” the court will grant if you follow the rules and complete your case successfully. Other examples of dischargeable debts in Chapter 7 and Chapter 13 bankruptcy include:
- Business debts
- Credit card bills
- Overdue rent payments
- Personal loans
- Social Security overpayments
- Utility bills
It is important to understand that not all debts can be erased through bankruptcy. Non-dischargeable debts which are not relieved by bankruptcy include:
- Alimony payments or spousal support payments
- Child support payments
- Student loans, in most cases
- Tax debts, in most cases
If most of your debts are non-dischargeable, such as child support debts, bankruptcy may not be the appropriate strategy. However, if you need financial help managing dischargeable debts, such as debt from credit card bills or medical bills, filing bankruptcy can make a world of positive difference.
Stop Creditors and Debt Collection Actions
When you file for bankruptcy, you are protected by an injunction, or court order, referred to as the “automatic stay.” It is called the automatic stay because:
- It begins automatically when you file for bankruptcy.
- It “stays” (halts) debt collection actions, including lawsuits, while your bankruptcy case is in progress.
The United States Courts system defines the stay as an order “that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.”
If creditors are constantly harassing you for payments by calling you or sending you notices in the mail, daily life can be full of stress. Actions as simple as opening the mail or answering the telephone can become sources of dread and anxiety. If this sounds familiar, bankruptcy can offer relief. With some exceptions, bankruptcy’s automatic stay feature generally prohibits creditors and collection agencies from contacting you or pursuing collections.
If a bank or a repossession company is attempting to foreclose on your home or repossess your vehicle, they typically must stop while the automatic stay is in effect. However, if a creditor lifts the stay, or if you file for bankruptcy more than once, your options may be limited. The sooner you discuss your situation with our experienced bankruptcy lawyers in Doylestown, the sooner we can help you deal with your creditors and debt collectors.
Should You File Chapter 7 or Chapter 13?
If you plan to file for bankruptcy in Pennsylvania, you will need to determine whether you will use Chapter 7 (otherwise known as “straight” bankruptcy or “liquidation”) or Chapter 13 (also called “reorganization” bankruptcy or a “wage earner’s plan”). The chapter you file will be determined by factors like the timing of your case, your goals for the bankruptcy, and the results of means testing.
The purpose of means testing, which is part of the federal bankruptcy process, is to compare your disposable income against the median income where you live. Depending on whether your income is higher or lower, you may need to consider filing Chapter 13. That is because Chapter 13 features a three-year to five-year reorganization (repayment) plan, while Chapter 7 does not. Therefore, if means testing reveals that you have too much income, you may not be eligible for Chapter 7 relief. However, if you have major costs like tax liabilities or healthcare insurance, this may create significant enough expenses for you to pass the means test and qualify for Chapter 7 bankruptcy.
Whether you file for Chapter 13 or Chapter 7 in Doylestown, the court will assign a bankruptcy trustee to your case. If you file Chapter 13, you will make payments to the trustee, who will distribute your payments among your creditors according to the terms of your reorganization plan. The plan can help to shrink your payments, making your debts more manageable. The plan also gives you time to get current on missed auto loan payments and/or mortgage payments. If you pay off your delinquent car loan and mortgage debts, while continuing to make your upcoming payments, you may be able to keep your car and home.
If you file Chapter 7, you will not be required to make any payments, but the bankruptcy trustee can sell certain assets that you own to repay your creditors. However, the good news is that filing Chapter 7 does not mean you will automatically lose your property or belongings. On the contrary, you can protect many assets with Pennsylvania bankruptcy exemptions or federal bankruptcy exemptions. These exemptions could enable you to keep your home, car, and other valuable property.
Chapter 7 cases may be completed in as little as four to six months, whereas Chapter 13 bankruptcy has a three-year to five-year timeline due to the length of the reorganization plan. The filing fee for Chapter 7 is $335, while it currently costs $310 to file for Chapter 13. However, fee waivers may be available in certain cases.
Our Doylestown, PA Bankruptcy Attorneys Can Help
The sooner you get started on your path to bankruptcy, the sooner you can wipe out your debts and stop creditors from contacting you. However, you should not file for consumer bankruptcy without legal assistance from an experienced Doylestown bankruptcy attorney. The rules and regulations pertaining to bankruptcy are highly elaborate – and differences between state and federal bankruptcy regulations, such as differences between the available sets of bankruptcy exemptions, can confuse matters even further. If you make an error at any point in the process, your case could be delayed or even dismissed by the bankruptcy court, leaving you with little recourse to address your debts.
If you or a family member is thinking about filing for bankruptcy in Doylestown, the dedicated Chapter 7 and Chapter 13 attorneys of Young, Marr, Mallis & Associates are here to offer guidance. To schedule your free bankruptcy consultation, contact our law offices online, or call (215) 701-6519.