Harrisburg, PA Bankruptcy Lawyer

When debt becomes overwhelming, you might have nowhere else to turn except bankruptcy.  There are options before you commit to bankruptcy.  You should always explore them first, but filing for bankruptcy can bring immediate relief as well as ongoing relief when it comes to dealing with massive debt.

First, you should talk to a lawyer to see what options you have and whether bankruptcy is right for you.  You should also consult about what form of bankruptcy you should file for – typically Chapter 7 or 13.  From there, the process can take quite some time, but our lawyers can help you and advise you throughout the entire process.

For a free evaluation to get started, call the bankruptcy lawyers at Young, Marr, Mallis & Associates at (215) 701-6519 today.

What Can I Try Before Bankruptcy?

If you are looking for a bankruptcy lawyer, you have probably tried other things first, but we would be remiss if we did not mention that there are options outside of bankruptcy.  Many people can recover from their debt by assessing their financial situations, speaking to financial experts, budgeting, talking to creditors about payment plans, selling some of their assets, or even seeking debt relief.

There are various agencies that help with these steps.  They do anything from talking to creditors for you and trying to convince them to settle your debt or even giving debt consolidation loans that pay off your creditors from one loan, putting everything into a reasonable payment.

However, these options do not work for everyone, and you may have already tried them all, meaning bankruptcy might be your best option left.

Is Bankruptcy Right for Me?

As mentioned, there may be other options to try first.  If you have not tried them, we may recommend seeking debt consolidation or other options first.  However, once we take a look into your financial situation, we can know better.

Our lawyers offer free case evaluations where we can sit down, crack open the books, look into your debts, and help you determine whether bankruptcy is right for you.  There is no catch and no risk, so give us a call to get started.

What Bankruptcy Chapter Should I Use?

Personal bankruptcy is usually filed under Chapter 7 or Chapter 13, whereas business bankruptcies often come under Chapter 11.  These two types are used for different situations, and debtors usually have one that will work much better for them.

Chapter 7

Chapter 7 bankruptcy is often called “liquidation bankruptcy.”  The goal here is to take any assets you can part with and sell them off to pay off your debts.  This is a quick process, usually taking up to 6 months.  Its goal is to discharge all debts after paying as much as you can with your assets.

You can only qualify for Chapter 7 if your income is low enough; otherwise, you are expected to pay off more of the debt.  The trade-off here is that if you cannot afford the debt, more of the debt can be discharged – i.e., erased – at the end of your bankruptcy case.

There are limited protections under the law to keep certain assets out of the “bankruptcy estate,” letting you keep them from being sold off to pay your debts.

Chapter 13

Instead of taking your assets and selling them, Chapter 13 allows you to reorganize your debts into a payment plan that you can follow for years to come.  Under this plan, you will pay off a higher proportion of your debts and your creditors will get more of the money you owe them – assuming you can afford to pay.

Chapter 13 looks at what you can pay after subtracting out necessary expenses like rent, utilities, and groceries.  Then, that leftover income helps them set a monthly payment to help cover your debts.

Chapter 13 is more likely to be right for you because Chapter 7 is means-tested and cannot be used if your income is too high.

How Does Chapter 7 Means Testing Work in Harrisburg?

People think of bankruptcy as being for those whose income is too low to cover their debts, but you can actually have income that is too high to let you use Chapter 7.

Under this means test, the courts only allow you to use Chapter 7 – which discharges more debt – if your income is very low.  This shows you would not be able to pay off the debts even with reorganization, and it is a must for qualifying for Chapter 7.

If your income is under the state median, you can use Chapter 7.  If it is higher than that, you can still qualify if, after accounting for necessary expenses, your “disposable income” still would not cover your minimum payments.

This shows that even when you are being as frugal as possible, the cost of living plus the cost of debts would continue to put you deeper into debt.  If that is the case, you pass the means test, and the only possible way forward is to discharge some of the debt.

Is My House Safe in Bankruptcy?

Depending on whether you use the state or federal exemptions for your case, you might be able to keep your house safe when filing for bankruptcy.  Keep in mind that they typically only try to seize your house in Chapter 7; your house is usually safe in Chapter 13.

Pennsylvania has no homestead exception, but federal law does.  You have to choose between the whole slate of state or federal protections, meaning that if you use the federal “homestead exception,” you have to use the other federal protections as well.  These are mostly higher than Pennsylvania’s exceptions anyway.

Under the federal exemption for 2025, you can exempt up to $31,575 in your primary residence.  If you are married and filing together, this doubles to $63,514.

This only looks at the equity in your house.  That means the part of your purchase price you have already paid for with down payments or principal payments.  If your equity is under this exemption limit, you can usually keep your house, no problem.

Call Our Bankruptcy Lawyers in Harrisburg Today

For a free case evaluation, call Young, Marr, Mallis & Associates’ bankruptcy lawyers at (215) 701-6519 today.