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Norristown, PA Bankruptcy Lawyer

Going through financial problems is always a stressful and scary experience. When you’ve fallen behind on your debts, a gesture as simple as opening your mail or answering the phone can turn into a nightmare of aggressive creditors and sleepless nights. Fortunately, there may be a way to stabilize your finances and get your credit back on track. If your bills and debts have reached a point where they can no longer be managed, it may be the right time to consider filing for bankruptcy.

However, navigating the process can be difficult, and a single misstep could cost you your case. If fraud is alleged, you could even be criminally charged. An experienced attorney can help review your paperwork, keep you compliant with the laws, and guide you through the steps you need to take at every stage of the timeline. To set up a completely free and confidential legal consultation, call the Norristown, Pennsylvania bankruptcy lawyers of Young, Marr, Mallis & Associates at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania today.

Benefits of Filing for Bankruptcy

While bankruptcy suffers from a fearsome reputation, in reality, it can actually be a tremendously useful and powerful tool for struggling debtors. When you file for and successfully complete the bankruptcy process, you can eliminate many of your debts, put a freeze on collection actions against you, cut off persistent hounding from creditors, and start to repair your damaged credit.

Eliminate Debts — Most debts are considered “dischargeable,” which means they can be eliminated. When a debt is discharged, you are no longer liable for paying it off. Some of the many obligations you can erase include medical bills, credit card debt, utility bills, personal loans, social security overpayments, and more.
Stop Collection Agencies — When you file your petition, you immediately come under the protection of something called the automatic stay, which is usually effective for the entire duration of a case. With the automatic stay in place, your creditors are prohibited from contacting you about loan repayments, and any collection actions against you must temporarily freeze.
Repair Credit — While bankruptcy initially has a negative effect on your credit, with your debts wiped out, you can start over fresh and make your credit score higher than it was when you were struggling with insolvency. If they’re able to stay current on their obligations, many people can start to see improvements to their credit in as little as six months to a year.

Which Type of Bankruptcy Should I Choose?

There are actually two different types of bankruptcy for consumers:

Chapter 7
Chapter 13

Chapter 11 may also be used by consumers, but only in extremely limited circumstances. The vast majority of filings fall under these two categories, with Chapter 7 being slightly more common than Chapter 13. So how are they different, and which one is appropriate for you?

Before you file, you’ll need to take something called the Means Test. The Means Test measures the Pennsylvania median income for a household of your size against your income. If your income is lower than the median, you’re eligible to file for Chapter 7, but do not necessarily have to. If your income is higher than the median, you must file for Chapter 13, unless you can deduct enough expenses to qualify for Chapter 7. This is because Chapter 7 is reserved for filers with the greatest degree of financial need.

If you qualify for Chapter 7, should you actually choose it? That depends on your goals. You may want to file for Chapter 13 if:

You want to pay off a debt which is non-dischargeable under Chapter 7, such as student loans or tax obligations.
You want to keep nonexempt property, which would normally be sold and used to pay off creditors under Chapter 7.
You want to protect a co-debtor from being pursued by your creditors.

On the other hand, you may want to file for Chapter 7 if:

You’re in a hurry. Chapter 7 only takes about four to six months, whereas Chapter 13 can take anywhere from three to five years.
You aren’t realistically able to pay off your debts. Chapter 13 requires debtors to make long-term repayments, while Chapter 7 eliminates debt rapidly.