Norristown, PA Bankruptcy Lawyer
Going through financial problems is always a stressful and scary experience. When you have 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. Our experienced attorneys 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 case evaluation, call the Norristown, PA bankruptcy lawyers of Young, Marr, Mallis & Associates at (215) 701-6519 today.
Benefits of Filing for Bankruptcy in Norristown, PA
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 in Norristown, 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.
Many debts are considered “dischargeable,” which means they can be eliminated when a debtor files for bankruptcy. 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. Dischargeable debts are erased at the start of Chapter 7 bankruptcies and at the end of Chapter 13 bankruptcies.
Stop Collection Agencies
When you file your petition, you immediately come under the protection of something called an automatic stay, which is usually effective for the entire duration of a case. With an automatic stay in place, your creditors are prohibited from contacting you about loan repayments, and any collection actions against you must temporarily freeze. This includes mortgage foreclosure proceedings and upcoming sheriff’s sales.
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 are 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 in Norristown, PA?
There are actually two different types of bankruptcy for consumers: Chapter 7 and 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?
Benefits of Chapter 7
Before you file, you will 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 are eligible to file for Chapter 7, but do not necessarily have to. That said, you may want to file for Chapter 7 if you are in a hurry. Chapter 7 only takes about four to six months, whereas Chapter 13 can take anywhere from three to five years. If you are not realistically able to pay off your debts, Chapter 7 may be the best solution for you. Chapter 7 does require asset liquidation, which is something debtors should keep in mind. However, if most of your debt is chargeable, the court will wipe it out immediately after you file for Chapter 7 in in Norristown.
Benefits of Chapter 13
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, or you want to protect a co-debtor from being pursued by your creditors. Chapter 13 requires debtors to make long-term repayments, while Chapter 7 eliminates debt rapidly. Chapter 13 also does not require debtors to liquidate any assets, making it very appealing to many in in Norristown.
How to File for Bankruptcy in Norristown, PA
After identifying the bankruptcy chapter you plan to file, you must then file a bankruptcy petition with the court in Norristown. To do this, you must gather information about your debts and file the necessary forms.
Because there are many forms involved in the bankruptcy process, it is wise for debtors in Norristown to consult our bankruptcy lawyers. Our attorneys can ensure you submit the necessary paperwork to the court so that your case runs smoothly. Failing to file certain forms can lead to confusion and unnecessary hiccups with your case, lengthening your claim and impeding your ability to settle debts according to your desired timeline.
In your bankruptcy petition, you must name the chapter of bankruptcy you are filing and identify your debts and creditors. If you want to use liquidation exemptions because you are filing Chapter 7, identify those exemptions in your bankruptcy petition.
In addition to initial bankruptcy forms, debtors must also submit their plans for repayment if they are filing Chapter 13. Proposed repayment plans must be filed with the court within two weeks after a petition is filed in Norristown. In certain cases, the court might grant an extension to debtors.
Average Length of Bankruptcy in Norristown, PA
Each bankruptcy case is unique, meaning debtors might be under bankruptcy for different amounts of time. That said, there is a general timeline for bankruptcy claims that can be applied to most cases in Norristown.
With Chapter 7 bankruptcies, debtors can settle their debts with creditors and get dischargeable debts erased within a matter of months. The average length of Chapter 7 bankruptcies in Norristown is four to six months. If most of your debt is dischargeable, you might be able to exit Chapter 7 bankruptcy weeks after your petition is filed with the court.
Chapter 13 bankruptcy is a more involved process. Instead of liquidating a debtor’s assets to repay creditors, Chapter 13 requires repayment over a set period of time. During mediation with your creditors, our bankruptcy lawyers may be able to negotiate a lower interest rate or reduced total payments to make your plan more affordable. Chapter 13 typically takes between three and five years in Norristown, depending on a debtor’s financial ability, expenses, and the size of their debt.
Is There a Debt Threshold for Bankruptcy in Norristown, PA?
There is no minimum debt threshold for bankruptcy in Norristown. However, if you have too much debt, you might have to file a certain chapter of bankruptcy.
Most debtors struggle with unsecured debts, like credit card and medical bills. Even with little debt, you can theoretically file for bankruptcy in Norristown. However, doing so might raise red flags if a debtor does not have much debt and is only looking for a debt discharge to avoid repaying their creditors.
When it comes to Chapter 13, there is a maximum debt threshold. To be eligible for Chapter 13, debtors must have less than $2,750,000 in total debt, including secured and unsecured debts. Should that be the case in your situation, our attorneys will help you file another chapter. While the maximum debt threshold for Chapter 13 is high, many debtors have considerable debt, whether due to major life events or poor spending and saving practices.
Can You File for Bankruptcy Multiple Times in Norristown, PA?
If you filed for bankruptcy in the past and have since faced additional financial hardship, you can file again. However, you might need to wait a bit before doing so.
Generally speaking, individuals can file for bankruptcy as often as needed. That said, there are waiting periods between bankruptcy cases that debtors must adhere to. Depending on the first bankruptcy chapter you filed and which chapter you want to file in the future, you might have to wait different amounts of time. Generally, the waiting period is several years. If your original case was dismissed because of fraud or other reasons, you might have to wait even longer to file again.
It is also important to note that choosing bankruptcy to address your financial hardships multiple times might cause you to miss out on certain perks. For example, while an automatic stay is guaranteed the first time you enter bankruptcy, it might not last as long the second time. And, if you file for a third time, you might have to petition the court to get a stay.
Although bankruptcy is an option if you find yourself in a difficult financial situation in the future, it is best to fully address your debt in your initial bankruptcy, negotiate with creditors to make a plan moving forward, and change your saving and spending habits so that you do not go into debt again soon after your first bankruptcy in Norristown.
Call Our Norristown, PA Lawyers for Help with Chapter 7 and Chapter 13 Bankruptcy Filings
To have our bankruptcy lawyers assess your case for free, call Young, Marr, Mallis & Associates now at (215) 701-6519.