Philadelphia Bankruptcy Lawyers

At Young, Marr, Mallis & Associates, we can help lift the burden of filing for consumer bankruptcy.  Our Philadelphia Bankruptcy Lawyer has over 30 years of experience handling bankruptcy cases.  With more than 5,000 cases filed, we’ve seen it all.  What we have learned is that no matter how hopeless or confusing you think your circumstances may be, our attorneys have been there before.  We know the way.

To speak confidentially about how bankruptcy may be able to help you, call our law offices at (215) 701-6519. Your bankruptcy questions are important to us, which is why calls are answered 24 hours a day, seven days a week.

For 30+ Years, Our Philadelphia Bankruptcy Attorneys Have Been Helping Clients Just Like You

Bankruptcy is a powerful tool that has helped millions of Americans regain their financial stability and independence in life.  When you file for a Pennsylvania consumer bankruptcy in Chapter 7 or Chapter 13, you gain the ability to eliminate the majority of your debt, prevent your creditors from contacting you, and stall a foreclosure on your home.  In the long term, bankruptcy gives debtors the tools they need to start building good credit for the future, and many individuals with a bankruptcy in their past go on to be approved for loans and to make major purchases.

In Pennsylvania, consumer bankruptcy is more commonplace than you may think, particularly in Philadelphia.  In fact, Philadelphia has the highest number of bankruptcy filings in the state every fiscal year.

Filing for bankruptcy is a daunting process.  Federal and Pennsylvania laws pertaining to bankruptcy are complex, and on top of the legal challenges, the prospect of filing often causes stress and anxiety.  You shouldn’t have to struggle through dense and unfamiliar legal technicalities at a time when you’re already facing emotional turmoil.

What Are the Benefits of Filing Bankruptcy?

Many people are nervous about bankruptcy due to negative myths and misconceptions. In reality, filing can be the best way to restore your financial health. Debt will not disappear by itself – but filing for bankruptcy can set you on the right path again. If your case is managed with skill and care, bankruptcy can reduce or eliminate your debts, prevent your creditors from bothering you, and give you the financial tools to start the process of repairing bad credit.

While bankruptcy is not appropriate for everyone, there are many Philadelphians who could benefit greatly from filing for bankruptcy.

If you are struggling with overwhelming debt, consider the following benefits of bankruptcy for Pennsylvania residents:

Reduce or Eliminate Many Different Types of Debt

The major categories of bankruptcy are called “Chapter 7” and “Chapter 13.” Both chapters enable most debts to be reduced or wiped out in a matter of months or years, depending on the case. In bankruptcy terminology, this is known as the “discharge” of debts. Dischargeable debts, or debts that can be erased by bankruptcy, include credit card debt, medical debt, personal debts (such as debts owed to friends or family members), and business debt. Though rare, there are also some cases where it is possible to discharge student loan debt or debt that is related to unpaid federal income taxes.

Immediate Debt Relief

As soon as you file for bankruptcy in Philadelphia, an automatic stay will go into effect. This will prevent creditors from seeking payment from you in any way, including repossessing your car or requesting a sheriff’s sale of your property. When an automatic stay is in effect, threatening calls from creditors should stop. During this time, creditors are not allowed to engage in any debt-collection efforts whatsoever.

An automatic stay is often the immediate relief debtors need when trying to figure out their financial situation. Once an automatic stay is in effect and you can catch your breath, so to speak, our bankruptcy lawyers can create a plan for the future. Depending on the type of bankruptcy you can file for in Philadelphia, this might involve liquidating certain assets or devising a repayment plan to pay back creditors.

Long-Term Debt Relief

Filing for bankruptcy is not a Band-Aid solution. Instead, it is a legal process, signifying that you are committed to addressing your debt. By filing for bankruptcy in Philadelphia, you can start on the path to financial stability. Our bankruptcy lawyers can help you address all of your outstanding debt to creditors so that you do not have to continue dealing with harassing phone calls or financial insecurity. Instead of viewing bankruptcy as a last resort, think of it as a useful tool you can use to address debt, wipe the slate clean, and move forward with your life.

Save Yourself From Foreclosure

There are tools within bankruptcy that can help you keep your home if it has been placed in foreclosure or foreclosure is looming.  The same is true for some other major assets. By filing for bankruptcy, you can stop a foreclosure proceeding or a scheduled sheriff sale. While our Philadelphia bankruptcy attorney would not advise you to wait until the last minute, you could actually stop a sheriff sale on the morning of the auction. Chapter 13 allows you to pay your mortgage default over three to five years. In many cases, you could discharge unsecured debt so that your mortgage and trustee payments are easier to make.

Stop Debt Collection with the Automatic Stay

A person who files bankruptcy is referred to as a “filer,” a “petitioner,” or a “debtor.” When a debtor files for bankruptcy, they immediately come under the protection of a court order called the “automatic stay.” With a few exceptions, the automatic stay strictly limits what creditors may and may not do during the bankruptcy.

Limiting the actions of your creditors is one of the most potent benefits provided by filing for bankruptcy. When you attempt to negotiate with your creditors or work with a debt consolidation company, your creditors retain all their legal rights. This means that they can continue to call you, send you letters, and file lawsuits against you. When a creditor gets a judgment against you in Pennsylvania, they get a judgment lien on your property. A creditor could, and usually will, move for a judgment even if they are working with you. A judgment lien means that your unsecured credit card debt is now secured by your home. By filing for bankruptcy, your creditors are prohibited from filing any lawsuits against you. In fact, if there was a pending lawsuit, it will be stayed by your bankruptcy filing.

When a lender repossesses your car, they are exercising their legal right to enforce a debt. An automatic stay will stop a repossession. If your vehicle was taken, by quickly filing for bankruptcy, you could force your lender to return your car.
To provide a few examples, the automatic stay delays service shut-offs where utility bills have not been paid, prevents debt collection actions such as wage garnishment, and delays against foreclosure and eviction actions for renters and homeowners. Our Philadelphia bankruptcy attorney will review how an automatic stay will benefit your situation.

Lower Car Payments

If you filed Chapter 13 and purchased your car at least 910 days before the filing date, you might be able to lower your monthly payment. A car will begin depreciating on the day you purchase it. Depending on your loan, you could owe more than the vehicle is worth. If that is the case, our Pennsylvania bankruptcy attorney could attempt to cramdown your car loan. This means that you would pay the fair market price of the car through your bankruptcy plan and not the remaining balance of your loan.

Get Back on Track Toward Having Good Credit

Many people worry that filing for bankruptcy will permanently destroy their ability to maintain good credit, to make major purchases, and to take out loans at favorable rates. However, these are all bankruptcy myths. Once a bankruptcy has been discharged, regular and timely payments of credit card and utility bills can restore good credit over time. But unless the debtor files bankruptcy or achieves debt relief through other means, the bills and financial obligations will continue to pile up, making it harder and harder to restore a good credit score.

Bankruptcy typically provides the fastest way to begin restoring your credit. Most people who are considering filing for bankruptcy already have a low credit score. Trying to pay off your debt when you lack the funds is a fruitless journey. Bankruptcy lights a lamp at the end of the tunnel, so you know exactly where you will be in either a few months or three to five years.

Another important advantage to note is that when debt is discharged through bankruptcy, there are no tax consequences. If a creditor forgives your debt or accepts a partial payment in satisfaction of a larger liability, the amount forgiven is considered income for tax purposes. You will be required to report the income on your federal returns. Depending on your ordinary income, this additional amount could cost you your yearly refund or you might owe taxes.

You Can Enjoy the Peace of Mind that Your Finances are Stable

There’s no question that the circumstances leading up to bankruptcy are stressful. The accumulating bills and constant phone calls from debt collectors can take a heavy emotional toll. With the financial relief that bankruptcy provides, debtors can once again sleep easy knowing that they’re in control of their lives.

The Types of Bankruptcy Available to Clients in Philadelphia

While there are rare occurrences of consumers filing for Chapter 11, the overwhelming majority of all consumer bankruptcy cases fall into the category of either Chapter 7 or Chapter 13.

As a debtor, one of your most important decisions will be choosing effectively between the different kinds of bankruptcy. For most debtors in Pennsylvania, there are two bankruptcy options: Chapter 7 bankruptcy (which is otherwise known as “liquidation,” “straight” bankruptcy, or “ordinary” bankruptcy), and Chapter 13 bankruptcy (which is otherwise known as “reorganization” bankruptcy or a “wage earner’s plan”). So how are they different, and which one is appropriate for you?

Chapter 7 Bankruptcy

Chapter 7 is more common than Chapter 13, but both are used by thousands of Pennsylvania residents every year. The question is, which is right for your bankruptcy case? The answer is different for every debtor, because the “right” type of bankruptcy depends on factors like how much you earn, the nature of your debts, and your specific goals for the bankruptcy – for example, whether or not you are trying to prevent the repossession of your vehicle or to stop a foreclosure on your home.

Chapter 7 has several nicknames, including “liquidation” bankruptcy, “straight” bankruptcy, and “ordinary” bankruptcy. The second two stem from the relative speed, ease, and simplicity of Chapter 7. The first – liquidation – comes from the Chapter 7 process.

Chapter 7 bankruptcy is also called “liquidation” because a court-appointed official, who is known as the “bankruptcy trustee,” may sell off certain assets to repay some of the debts that you owe to your creditors. However, with an effective bankruptcy strategy in place, most people who file Chapter 7 are able to keep much or all of their property.

What Debts Does Chapter 7 Bankruptcy Cover?

There is good news for debtors: Chapter 7 bankruptcy wipes out a huge variety of debts, including some of the largest and most common sources of debt for Pennsylvanians. Any debt that can be erased by bankruptcy is called a “dischargeable” debt. Dischargeable debts in Chapter 7 bankruptcy in Pennsylvania include, but are not limited to, the following causes of debt:

• Debt from certain car accident claims
• Debt from credit card bills
• Debt from medical bills
• Debt from past-due rent
• Debt from past-due utility bills
• Debt from personal loans from friends and family members
• Debt from small businesses
• Debt from Social Security overpayments

It’s important to understand that some debts are non-dischargeable. These debts include debts related to alimony/spousal support, child support, criminal fines/restitution, and others.

Other debts are usually non-dischargeable, but can be eliminated under narrow circumstances. These debts include student loan debts and income tax debts which meet certain legal criteria.

How to File Chapter 7 in Philadelphia

The process for filing bankruptcy in Philadelphia can be complicated, even under Chapter 7, which is the simplest and most streamlined version of consumer bankruptcy. There are myriad legal rules, which are spelled out in technical language that is difficult for most debtors to understand. Failure to comply with any one of these rules can lead to a poor outcome – including complete dismissal of the case. If the case is dismissed, no debts will be erased.

Because the Chapter 7 process is complicated – and because bankruptcy will have lasting financial impacts – it is vital to have guidance from a Philadelphia Chapter 7 bankruptcy attorney if you are considering filing. To give you an idea of what the process involves, consider the following rules and regulations about how to file Chapter 7 bankruptcy in Pennsylvania:

• You must pay a Chapter 7 filing fee to declare bankruptcy, unless the fee is waived.
• You must file in the correct court, which depends on where you live. If you are a resident of Philadelphia, your bankruptcy court is the United States Bankruptcy Court for the Eastern District of Pennsylvania, Philadelphia Division.
• You must complete various bankruptcy forms, including the petition for bankruptcy and accompanying lists of your debts, assets, income, properties, and so forth.
• You must meet certain requirements before filing Chapter 7, like the pre-bankruptcy credit counseling requirement.
• You must meet certain requirements after you file, but before your debts can be discharged, such as the pre-discharge debtor education requirement.

When you file for bankruptcy, you are required to provide a detailed list of your personal property. Everything you own is known as the “bankruptcy estate.” As stated above, a court-appointed trustee is tasked with reviewing your assets, selling them, and disbursing the proceeds to your creditors. Fortunately, there are numerous ways to protect your property under federal and state law. Known as exemptions, our Pennsylvania bankruptcy attorney will have to pick either the federal exemptions or state exemptions when preparing your filing. Which set of exemptions we use will be based on the type of assets you own. In nearly every case, a debtor will not lose any of his or her property. In situations where your assets present a problem, we will either advise filing Chapter 13 or offer another solution.

When a debtor files for Chapter 7, the bankruptcy court will assign a bankruptcy trustee to the case. Part of the trustee’s job is to evaluate the debtor’s finances, including the debtor’s assets and property. The trustee can sell some of the debtor’s property to the debtor’s “creditors”: people or companies to whom the debtor owes money. However, that does not mean the debtor will lose their home, their car, or their other belongings. With skilled bankruptcy representation, it is generally possible to retain most of the debtor’s property, or even to keep all of it.

Once the debtor’s creditors have been repaid to the greatest extent possible, the court will “discharge,” or wipe out, many of the debtor’s debts. This process takes approximately four to six months to complete.

Two major benefits of the Chapter 7 process are that it is faster and simpler than the Chapter 13 process. If you file Chapter 7, your dischargeable debts may be discharged in as little as four to six months.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a more elaborate process than Chapter 7, and therefore takes a longer time to complete: three to five years, depending on the specifics of the case. That is because each Chapter 13 case revolves around a plan of reorganization, which establishes terms by which the debtor agrees to repay certain creditors through manageable installments.

Chapter 13 is sometimes described as a “wage earner’s plan” or called “reorganization” bankruptcy. The reasons for this become clear once you understand how Chapter 13 works.

Understanding the bankruptcy plan requires an explanation of how debt is categorized in bankruptcy. Typically, there are three types of debt: secured, unsecured, and priority.

Secured Debt

Secured debt is debt that is attached or secured by your property. For example, your mortgage is secured by your home and your car loan is secured by your vehicle. When you file for bankruptcy to stop a foreclosure or repossession, you will be required to pay the money you are behind on either your mortgage or car loan through your bankruptcy plan. Often, if you are behind on your utilities, there will be a municipal lien on your home. This means that an overdue water bill could be secured and must be paid through your plan.

Unsecured Debt

Unsecured debt includes almost every other financial liability you might have, such as credit card debt, medical bills, and personal loans. Whether you must pay anything to your unsecured creditors will depend on three factors. First, if you are above the family income median in the Means Test calculation, you will have to pay a specific amount each month towards your unsecured creditors.

Next, if you have any non-exempt equity in your property, or property that would have been sold if you filed Chapter 7, you must pay that amount towards your unsecured creditors. For example, if you have $7,500 in a savings account that you could not exempt, you must pay that to your creditors. While this might not seem like a benefit, imagine you have a total debt of $15,000. In this example, you would have five years to pay $7,500 towards the $15,000. Thereafter, $7,500 would be discharged. Additionally, you would not be required to pay the $7,500 immediately and there would be no tax consequences for the discharged debt.

Priority Debt

The final category is priority debt. Usually, priority debt is an outstanding tax obligation. Priority debt must be paid through your bankruptcy plan. However, if you have a tax liability, often a portion of the debt is unsecured. In many cases, even though you must some tax liability, you will save some money because a part of this liability could be discharged.

Creating a Plan of Reorganization

When a debtor files for Chapter 13 bankruptcy, one of the first priorities is creating a document called a “plan of reorganization.” The reorganization plan is essentially a contract, lasting three to five years depending on the situation, between the debtor and his or her creditors. In it, the debtor agrees to repay specific amounts to specific creditors, whether on a weekly, bi-weekly, or monthly basis. A court appointee called a “trustee” handles distributing these payments toward different creditors, depending on how the debts are prioritized and secured.

The debtor makes the payments using his or her disposable income, which is why Chapter 13 is called a “wage earner’s plan.” If the debtor does not have sufficient income to fund a reorganization plan – for instance, if he or she is unemployed – it may be necessary to file Chapter 7 instead. Sources of income that can help to fund a reorganization plan include:

• Government benefits (such as disability, welfare, and Social Security)
• Royalties
• Spousal support (alimony)
• Wages or salary and/or commissions

Once the debtor completes the Chapter 13 plan, the bankruptcy court will wipe out, or “discharge,” many of the debts that have not been accounted for. Therefore, these debts are called “dischargeable” debts. Dischargeable debts in Chapter 13 bankruptcy include debts arising from:

• Credit card bills
• Income tax debt, under rare circumstances
• Medical bills, dental bills, and hospital bills
• Personal loans
• Small businesses
• Student loan debt, under rare circumstances
• Utility bills

Reasons to File Chapter 13 in Philadelphia

While Chapter 13 is not for everyone, certain debtors can benefit greatly from filing. Benefits of filing for Chapter 13 bankruptcy in Philadelphia or Bucks County include the following:

• Freedom from debt. You can wipe out the debts listed above, plus many others, after completing your reorganization plan.
• Improved ability to build good credit. While a bankruptcy will initially cause your credit score to decrease, it will also free you from numerous debts. This will make it easier for you to keep current on payments and build healthy credit going forward.
• Opportunities to stop foreclosure and repossession. Your car and your home are likely to be two of the biggest purchases you will ever make – and losing either can be emotionally and financially devastating. The Chapter 13 reorganization plan allows you to catch up on missed mortgage payments and missed car loan payments, which could prevent home foreclosure and vehicle repossession. Chapter 13 can also protect you against other stressful collection activities by your creditors and debt collectors, such as wage garnishment, utility-shutoffs, liens, and eviction.

Once the debtor has completed his or her repayment plan, the remaining debts will be discharged by the bankruptcy court, provided the debtor follows court rules and obeys bankruptcy laws. By making steady repayments, a Chapter 13 debtor can protect valuable property from being seized or sold off. For example, Chapter 13 can save a debtor’s car, truck, or SUV from being repossessed, or even prevent home foreclosure.

Emergency Bankruptcy Filings in Philadelphia

There are situations when it is necessary to file your case immediately. If a creditor is threatening or taking imminent actions against you, filing for bankruptcy is often the only way to stop them. When a sheriff sale is just days away, or your car was just repossessed, you need to call an experienced attorney for emergency bankruptcy filings in Philadelphia.

For a free initial legal review from our Philadelphia bankruptcy lawyers, call Young, Marr, Mallis & Associates at (215) 701-6519.

Why Would Someone Need to File an Emergency Bankruptcy Petition?

A person may need to file an emergency bankruptcy petition if they are at serious risk of losing their home or facing other adverse legal action from creditors in the immediate future. For example, if creditors are only a few days away from initiating foreclosure proceedings on your home, it might be time to file an emergency petition.

The Difference Between Standard and Emergency Bankruptcy Petitions in Philadelphia

Bankruptcy cases may be filed under various conditions. While most cases involve standard petitions that are usually complete upon filing, emergency petitions may be incomplete at filing, and remaining forms and documents may be filed later after the automatic stay is in place.

Standard Bankruptcy Petitions

A typical bankruptcy filing in Philadelphia, whether it is Chapter 7 or Chapter 13, consists of fifty or more pages of documents. In addition to the official bankruptcy forms and schedules, our Philadelphia bankruptcy attorney must provide supporting documents and statements.

To complete a standard bankruptcy petition takes time. However, if there is a looming sheriff’s sale or collection judgment, there might not be enough time to realistically gather all the necessary information and complete the filing accurately.

Emergency Bankruptcy Petitions

Fortunately, there is an option if a case must be filed quickly. You are not required to file a complete set of forms when you file an emergency bankruptcy petition. An emergency petition has the same legal effect as a complete bankruptcy filing, with only a portion of the forms included.

An emergency petition, sometimes called a “skeleton filing,” requires only a few forms, with the rest being filed later. When submitting an emergency petition, we must include a…

• Voluntary petition
• List of creditors
• Statement of Social Security Number (Form 121)
• Credit counseling certificate
• Filing fees, pr fee waivers
• Emergency motion

The above forms and documents serve as the basis for an emergency petition. Once files, an automatic stay may be imposed that protects you against adverse legal action from creditors, like foreclosure. However, for your case to proceed, we must file the remaining documents within 14 days.

Can You Avoid Foreclosure by Filing an Emergency Bankruptcy Petition?

Possibly. An emergency petition does not necessarily prevent the foreclosure, but it will result in an automatic stay enforced by the court. The automatic stay halts the foreclosure and other legal proceedings against you, while your bankruptcy case is pending. You may avoid the foreclosure altogether in the end, but this is not guaranteed.

The Required Forms for an Emergency Philadelphia Bankruptcy Petition

When preparing an emergency bankruptcy petition, our office will approach the filing similarly to an ordinary bankruptcy. The same initial questions will be asked regarding your debt, assets, income, and other relevant financial information. However, due to time constraints, it might not be possible to gather all the supporting documentation.

An emergency bankruptcy filing only consists of a handful of forms.

Voluntary Petition

First is the voluntary petition. This is the primary form that includes general information about your pending case, including the chapter of bankruptcy, your identifying information, your representing attorney, and other general information.

The Voluntary Petition should indicate whether you are filing independently or jointly with a spouse. You will also have to provide names you may have used in the past, any businesses you own or have owned, and your address.

Additionally, you must include information about why you are filing for bankruptcy and whether you have filed for bankruptcy before. You must also include some brief information about your debts and assets, although this does not constitute a means test, which is required later.

Certificate of Credit Counseling

Following the petition is a certificate indicating that you completed the required credit counseling course. Credit counseling courses can be completed quickly, often in an hour or two. It is crucial that you complete credit counseling before we file your emergency petition. If you do not, your petition may be dismissed, and you might be unable to file another petition for at least 180 days.

Under the following circumstances, the bankruptcy court might allow you to complete credit counseling after we file your petition:

• You requested credit counseling from an approved agency, but could not receive counseling during the 7-day period beginning on the day you initially requested counseling, and
• There are exigent circumstances that the court believes warrant a waiver of the credit counseling requirement before filing, and
• You file a certificating stating the facts regarding the above two conditions, and the certification must satisfy the court.

Because many of these courses are available online or over the phone, the court will typically not grant a waiver due to time constraints. In most emergency cases, it is advised to complete this course the evening before your appointment with our office.

List of Creditors

A thorough list of your creditors and their addresses must be filed. This document, known as the “creditors matrix,” is used by the court to send an official bankruptcy notice to your creditors.

The creditor matrix should include a thorough and complete list of all creditors, any co-debtors, and other interested parties, in addition to their mailing addresses.

If your financial situation is so complex that you are unsure of all your creditors’ names, gather as much information as possible about them before meeting with our legal team.

Form B-121

The final document required in an emergency bankruptcy filing is Form B-121, or the statement of your Social Security number.

You must include your current Social Security Number and any SSNs you may have had in the past. You must also include all federal Individual Taxpayer Identification Numbers (ITINs) you have or have used in the past. This form is short and can be filled out quickly if you have all the ID numbers ready to go.

Filing Fees or Fee Waivers

Unfortunately, filing for bankruptcy, even under emergency circumstances, is not free. Petitioners must be prepared to pay a fee when their petition is filed.

If you are filing a Chapter 7 petition, the total fee is $338. If you are filing a Chapter 13 petition, the total fee is $313.

If it is difficult or impossible for you to pay this fee up front, we may be able to pay the fee in installments. The court generally allows up to four installments. If the fee is just too much, it may be possible to file a fee waiver.

We may file a waiver using Form B103B for a Chapter 7 petition. Waivers are usually not available for Chapter 13 petitions. You must meet specific criteria regarding all sources of income, family size, monthly expenses, property, and other assets.

Remaining Documents and Forms

Once all the documents are filed, your bankruptcy is official, and the following legal protections take effect. The remaining forms, schedules, and documents must be filed within 14 days, or your case could be dismissed without notice.

What Happens if You Do Not Have All Necessary Documents When Filing an Emergency Bankruptcy Petition?

If you do not have the bare minimum documentation to file an emergency petition, the court will not accept your petition. If you have the basic forms and documents needed to file an emergency petition, you may file any remaining documents and forms within 14 days. If you do not, your case may be dismissed, and you may be unable to file another petition for at least 180 days.

Which Type of Bankruptcy is Right for You?

Unfortunately, debtors are not allowed to choose which type of bankruptcy they would like to enter.  Instead, the category of bankruptcy most appropriate for you is selected via Means Testing.

The Means Test calculates several variables to determine whether you are a more suitable candidate for Chapter 7 or Chapter 13.  The Means Test primarily measures your median household income against Pennsylvania averages, but other factors which are analyzed include your living expenses, and the amount of “disposable” income you have.   The reason Means Testing exists is to make sure that people who have the ability to accommodate a Chapter 13 bankruptcy do not abuse the system by filing for Chapter 7, which is need-based.

There are some exceptions to the regulations of Means Testing, which our qualified Philadelphia bankruptcy attorneys can help you navigate.

Average Length of Chapter 7 and Chapter 13 Bankruptcy in Philadelphia

Regardless of the type of bankruptcy you file for in Northeast Philadelphia, once you do, the end to your financial struggles is in sight. Typically, Chapter 7 bankruptcy is a shorter process than Chapter 13 bankruptcy. That said, both enable debtors to rid themselves of overwhelming debt in Northeast Philadelphia.

Depending on the assets you wish to protect, the assets you are able to liquidate, and the amount of debt you owe to creditors in Northeast Philadelphia, Chapter 7 bankruptcy may take only a matter of months. Generally, the average length of Chapter 7 bankruptcy is four to six months. Our bankruptcy lawyers can give you a clearer idea of the timeframe for your case once they have assessed your financial situation.

In most cases, Chapter 13 bankruptcy is longer. That is because Chapter 13 bankruptcy works through repayment plans, according to a debtor’s income and ability to pay back creditors. Depending on the debt you owe, it may take three to five years for you to fully address debt through a Chapter 13 bankruptcy repayment plan in Northeast Philadelphia.

Considerations When Filing Bankruptcy in Philadelphia

Filing for bankruptcy in Philadelphia will create a legal barrier between you and your creditors, stopping foreclosures, sheriff sales, repossessions, utility shut-offs, judgments, and other collection activity. However, filing for bankruptcy is only the first step.

When to Contact an Attorney

When our office prepares your bankruptcy filing, we do much more than complete forms and submit documents. Our knowledgeable attorneys will review the bankruptcy process with you in specific detail so you understand your obligations under the law. Additionally, our office will thoroughly review your assets, income, and other financial information to determine whether you qualify for bankruptcy – including verifying that you are eligible for Chapter 7 or have the economic means to complete a Chapter 13.

Gather Whatever Documents and Evidence You Have

When drafting and filing an emergency bankruptcy petition, it might not be feasible to review all the necessary documents. For example, if a debtor needs to file on the morning of a sheriff’s sale, they probably do not have evidence of their income for the last six months, and other documents and statements necessary to finalize a bankruptcy filing.

In these situations, it is essential to bring what documents you have on hand to your appointment, including a recent pay stub, bank statements, tax returns, and a recent credit report. It is also critical to answer every question truthfully and as accurately as possible.

Notifying Creditors

As stated above, filing for bankruptcy is only the first step. The next thing our office will do is notify any creditors with pending legal action. For instance, our office will send notice of your filing to the sheriff’s department, your mortgage company, and its legal representation if you are filing to stop a foreclosure or sheriff sale.

Filing Remaining Forms After the Emergency Petition

Once the emergency petition is filed, our office will begin completing and filing the remaining forms, schedules, and documents. These include information about bankruptcy schedules, a means test, and statements of financial affairs. Your exact documents will depend on your specific situation, finances, and the bankruptcy chapter you choose.

These documents must be filed within 14 days of the petition’s filing, or your case could be dismissed. Once a case is dismissed, you may not be able to file another petition for at least 180 days.

Any supporting documents and statements must be supplied to our office well before the two-week deadline.

How to File for Bankruptcy Using a Philadelphia Bankruptcy Attorney

There are many rules, regulations, and procedures that you need to be aware of if you decide to file bankruptcy in Philadelphia. For example, federal bankruptcy laws require you to complete pre-bankruptcy credit counseling before you may file. Credit counseling can only be received through a government-approved service provider.

Once you have completed pre-bankruptcy requirements and ensured that you meet the appropriate residency requirements, you can begin the process of filing a bankruptcy petition. However, it may make better financial sense to temporarily delay the filing, depending on your circumstances. Our Philadelphia bankruptcy attorneys can help you decide when is the best time to file bankruptcy based on your situation.
Be advised that there is generally a filing fee to submit your bankruptcy paperwork. The bankruptcy filing fees are as follows:

• Chapter 7 Filing Fee – $338 (as of December 1, 2024)
• Chapter 13 Filing Fee – $318 (as of December 1, 2024)

These fees are typically due at the time of filing. However, in some cases, the fee to file Chapter 7 bankruptcy can be either waived or paid in installments. You will need to complete and submit an application to have the Chapter 7 fee waived.
If you live in Philadelphia or the surrounding suburbs, your bankruptcy court will be the United States Bankruptcy Court for the Eastern District of Pennsylvania. This court has jurisdiction (authority) over not only Philadelphia but also several of the surrounding counties. The court is located in downtown Philadelphia in Center City.

You will need to submit a range of forms when you file bankruptcy in Pennsylvania. The core of each case is the bankruptcy petition. On your petition for bankruptcy, which an attorney can help you complete and file, you will provide your contact information and answer questions about why you are filing for bankruptcy, your history of bankruptcy (if any), your debts and assets, and other essential information. Along with the petition for bankruptcy, you will also need to file some supplementary paperwork, including forms that describe the following in detail:

• Information about your income and assets
• The creditors you owe debts to
• The property/properties you own
• Whether anyone is filing with you (called a “co-debtor”)
• Your current living expenses

Before the bankruptcy court will agree to discharge your debts, you must complete another federal requirement known as “debtor education.” Similar to credit counseling, debtor education must be provided by a government-approved agency. The purpose of debtor education is to help you develop effective budgeting, financial planning, and money management skills so that you will not need to declare bankruptcy again in the future.

Why Having an Experienced Bankruptcy Lawyer is Important

Budgeting is usually a major concern for people who are thinking about filing for bankruptcy. For this reason, some people may decide to avoid hiring an attorney and take a do-it-yourself approach. This is known as “pro se” representation.

If you are considering declaring bankruptcy, you should be advised that filing without an attorney is extremely risky. The laws and regulations, the court procedures, and the financial paperwork associated with bankruptcy are highly technical and are full of language that is unfamiliar to most people, making it easy for debtors to make mistakes or overlook critical details.

Making even a small error in the course of bankruptcy could have disastrous effects on your case. For example, you might lose property that could have been saved, or even risk having your case dismissed. Even the official website of the United States Courts cautions against filing without legal assistance, explaining that “seeking the advice of a qualified Philadelphia bankruptcy attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes.”

Other than protecting you from avoidable bankruptcy errors, like missing legal deadlines or forgetting to list certain assets, an experienced attorney can also help with your case in other ways. Some benefits of hiring a Philadelphia Bankruptcy Lawyer are that your attorney will:

• Advise you about important legal decisions like which type of bankruptcy to file, which set of exemptions to claim, and when is the most strategic time to file.
• Explain important terms that will help you to understand bankruptcy laws more clearly.
• Help to ensure that you meet federal bankruptcy requirements like credit counseling and debtor education criteria.
• Prepare you for each hearing, meeting, and interview you must attend.
• Protect you if creditors or debt collectors try to violate your legal rights.
• Take care of reviewing and filing your legal and financial documents.

Filing for bankruptcy is one of the biggest financial decisions you’ll ever make. Make sure that you are well-prepared with an experienced bankruptcy lawyer who can counsel you, prepare you, and protect your best interests throughout the legal process.

While bankruptcy law is challenging to interpret, in order to secure a discharge, it is critical that absolutely no mistakes be made during the process of filing.  If a petitioner makes an error by omitting a creditor, forgetting a document, incorrectly filling out a document, or missing a deadline, their entire case could be ruined.

Our Philadelphia Bankruptcy Attorneys Can Help

To speak with an attorney about your financial options for bankruptcy and debt management, contact our bankruptcy law firm online, or call Young, Marr, Mallis & Associates at (215) 701-6519 today. Consultations are confidential, and your initial consultation is completely free of charge.