The Bankruptcy Process

Many people live paycheck-to-paycheck or have minimal savings. These circumstances mean that even a small financial setback could result in a crisis. When you cannot pay your utility bills, mortgage, or other monthly obligations, your creditors could take legal action against you. Depending on the type of debt, a creditor could obtain a court judgment, freeze your bank account, or repossess your property. One way to stop creditors and turn your situation around is by filing for bankruptcy.

Bankruptcy is a scary and misunderstood word. Our attorneys at Young, Marr & Associates understand this. We want to dispel the misconceptions people have regarding bankruptcy and explain the process and benefits of filing. While bankruptcy is not applicable in every situation, it is often the best option available.

Our experienced Pennsylvania bankruptcy attorneys have been assisting people out of their financial holes for decades. We understand the hesitation many individuals feel and are committed to not only helping our clients through the process – we want them to understand it. To discuss the advantages of filing for bankruptcy, call our law offices at (215) 701-6519.

What is Bankruptcy

Bankruptcy is governed by federal law – though every jurisdiction has its local rules and regulations. The Bankruptcy Code, enacted by Congress, is contained within Title 11 of the United States Code. It provides a legal method for businesses, individuals, and couples to obtain relief from debt and overwhelming financial obligations. Depending on the circumstances, this is accomplished by either eliminating the debt through a discharge or reorganizing the debt.

Typically, a bankruptcy commences when a debtor files a voluntary petition with the court. The Bankruptcy Code outlines the forms a debtor must file, the supporting evidence required, certain deadlines, creditors’ obligations, and other necessary provisions to further the bankruptcy.

Our Philadelphia bankruptcy attorneys are familiar with the federal requirements and the local rules and regulations.

When Should I File For Bankruptcy

Timing is important when filing for bankruptcy. However, the first question someone should ask is, “do I need to file for bankruptcy?” Because everyone’s circumstances are unique, no one answer covers every situation.

While our experienced Bucks County bankruptcy attorneys cannot answer this question for you – we can provide some guidelines and factors to consider. If you cannot pay your monthly utility bills because of credit card interest, then filing for bankruptcy could be a viable option to regain your financial foothold. Other situations are clearer. For example, if your home is scheduled for a sheriff’s sale, bankruptcy could be the only way to stop the auction and keep your house. Similarly, if your car is about to be repossessed, filing for bankruptcy will stop your lender from taking your vehicle. If you are facing one or more lawsuits from creditors, you should speak with one of our bankruptcy lawyers.

Sometimes, bankruptcy is not an obvious solution. For instance, some people manage by paying the minimum payment on several maxed-out credit cards. While they are not missing any payments, they are not paying down the debt and are unable to save any money. Likewise, transferring huge balances from credit card to credit card is not helping you reestablish your credit or put you in a position to improve your economic position. At Young, Marr, & Associates, our attorneys know that bankruptcy is not always considered a viable option. However, we also know that many people do not understand the process or the many benefits.

What are the Different Types of Bankruptcy

While there are six Chapters of bankruptcy, most people in Pennsylvania, New Jersey, and the surrounding states will file either Chapter 7 or Chapter 13.

Chapter 7

By far, the most common type of bankruptcy is Chapter 7. When most people think about bankruptcy, they are picturing something similar to Chapter 7. Designed for people with limited assets and income, Chapter 7 is a liquidation bankruptcy that allows debtors to discharge a significant percentage of their debt. When debt is discharged, it is eliminated. This means that the filer no longer owes their creditors any obligation to pay the debt back. While this sounds fantastic, there are some drawbacks.

First, a debtor must qualify for Chapter 7. To do so, they must prove that their household income is below the median average. Furthermore, a Chapter 7 filer might have to turn over some of their property to a court-appointed trustee to be sold. Fortunately, most Chapter 7 filers are able to protect their property with either federal or state exemptions. Our Chapter 7 bankruptcy attorneys will thoroughly review your income and assets before filing your case.

Chapter 13

People with substantial debt, a good income, and significant assets have the ability to restructure their debt by filing a Chapter 13 bankruptcy. Unlike Chapter 7, a Chapter 13 filer will pay back a portion of the debt over three to five years. One of the advantages of filing Chapter 13 is that a debtor will typically pay significantly less than they owe.

A Chapter 13 also might be necessary to pay back a secured creditor that is taking legal action to retrieve their collateral. One of the most common reasons people file Chapter 13 is to stop a mortgage foreclosure. By filing Chapter 13, a debtor will stop a foreclosure and propose a plan to pay back their mortgage company over five years. You still need to qualify for Chapter 13. Furthermore, your plan must conform to certain provisions in the Bankruptcy Code, so it is critical to have our experienced bankruptcy 13 attorneys working for you.

When Should I Hire a Bankruptcy Attorney

If you are overwhelmed by debt, you should contact a bankruptcy attorney. If your home is in foreclosure, you should contact a bankruptcy attorney. You should certainly speak with a bankruptcy attorney before taking any actions that could jeopardize a future case. Young, Marr & Associates offers free consultations to discuss your financial situation, so there is no harm in talking with one of our sympathetic and knowledgeable attorneys. If you wait until a sheriff’s sale is scheduled, your bank account is frozen, or your car is repossessed, you will make the bankruptcy process more challenging. It is better to understand your options before you are forced to make a decision.

Contact Our Bankruptcy Lawyers Today

Our Allentown bankruptcy attorneys are available to speak with you. We understand that financial struggles result in more than just an economic dilemma. Bankruptcy was designed to help individuals, not punish them. Call Young, Marr & Associates today to review your situation. Call (215) 701-6519 in Pennsylvania and (609) 755-3115 if you are in New Jersey.