Pottstown, PA Chapter 7 + 13 Bankruptcy Lawyer

The prospect of filing for bankruptcy can be a daunting thought. You may feel that you might lose all the valuable property you own or that your credit will never recover after filing. However, you would be surprised to learn how bankruptcy has helped many people achieve an improved financial outlook. If you or a family member is interested in filing for Chapter 7 or Chapter 13 bankruptcy, contact an experienced Pottstown bankruptcy lawyer today.

Young, Marr & Associates acknowledge that filing for bankruptcy can be a complex and stressful process, but we are here to alleviate that process. We can help you discover whether Chapter 7 bankruptcy or Chapter 13 bankruptcy is best for your specific needs. To schedule a free consultation to discuss your options, contact Young, Marr & Associates at (215) 607-2715, or contact us online.

Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy

Chapter 7 bankruptcy and Chapter 13 bankruptcy each offer different advantages to a debtor depending on their unique situation. For example, individuals who are weary of being hounded by bill collectors and want a relatively quick solution will likely elect to file for Chapter 7. Others who believe they could afford their debt under different circumstances are more inclined to choose Chapter 13.

However, before selecting a certain type of bankruptcy, you should understand how each type operates.

How Chapter 7 Bankruptcy Works

Chapter 7 bankruptcy is a form of bankruptcy that liquidates the assets of a debtor to pay off creditors. Specifically, a bankruptcy trustee will be appointed to collect all nonexempt assets of the debtor and use them to satisfy debts to creditors. A nonexempt asset is the property of a debtor that cannot be liquidated to pay off a debt. While the types of nonexempt assets may be different depending on the state you reside in, the following is a list of common nonexempt assets:

  • Valued artwork
  • Designer clothing
  • Jewelry
  • Investments
  • Coin collection

This is not an exhaustive list. The bankruptcy court may consider other nonexempt assets.

To initiate a Chapter 7 bankruptcy, a debtor must file a petition with the bankruptcy court where the debtor resides or where they have chosen to incorporate their business. When filing the petition, the debtor must also include information regarding their assets and liabilities, income and expenses, a financial statement, and similar documents.

If a debtor successfully files for Chapter 7 bankruptcy, they will be released from personal liability for various types of debts. Many people prefer this form of bankruptcy because of the possibility that the entire process will be complete within three months. The types of debt that can be discharged in bankruptcy include:

  • Medical bills
  • Credit card debt
  • Personal loans
  • Past-due utility bills
  • Civil court judgments
  • Business debts
  • Social Security overpayments

There are other debts that can be discharged in a Chapter 7 bankruptcy. In some cases, it is also possible to have your student loans discharged if you can prove that you are unable to pay them.

How Chapter 13 Bankruptcy Works

Chapter 13 bankruptcy allows a debtor to reorganize their debts into a more affordable form to make it easier to manage the payments. Chapter 13 is typically preferred by individuals who have a steady source of income but that have issues staying current on their bills.

When creating a reorganization plan, the debtor must provide the following information:

  • A list of creditors and the debt and type of claim the creditor has
  • The income of the debtor, their sources of income, and often the debtor is paid
  • A list of all property owned by the debtor
  • The monthly living expenses of the debtor including food, medication, transportation, and various other expenses

Using this information, the debtor is expected to create a debt reorganization plan meant to span about five years. The advantage of this plan would be that the debtor can consolidate their debt and make a single monthly payment at a lower rate that is distributed among their creditors. In some cases, the debtor may be approved for a three-year payment plan if they can present evidence showing that a five-year plan would not be feasible.

Once the debtor completes their payment plan, their remaining debt would be discharged. It is also important to note that a filing for bankruptcy may be challenged by a creditor as a reorganization plan would mean they receive less money than they were owed.

Additionally, once bankruptcy proceedings have been initiated, whether you filed for Chapter 7 or Chapter 13, you will receive an automatic stay. An automatic stay prevents creditors from pursuing payments or sending your account to collections until the bankruptcy proceeding has concluded. This will give a debtor time to work with an experienced attorney to improve their odds of successfully filing for bankruptcy.

Our Trusted Pottstown Chapter 13 Bankruptcy Attorneys are Ready to Work with You

If you need assistance filing for bankruptcy, contact an experienced Pottstown Chapter 13 bankruptcy attorney. The legal team at Young, Marr & Associates possess over three decades of combined legal experience, and we would be proud to use that experience to represent you. To schedule a free legal consultation to discuss your bankruptcy filing, contact Young, Marr & Associates at (215) 607-2715.