Upper Darby, PA Bankruptcy Lawyer
Most people will experience some type of financial distress in their lives. However, there are times when the problem is more serious than mere distress. If you find yourself falling behind on your monthly payments and face mounting late fees and penalties, you may want to consult to an attorney. There are options nearby if you live in the Upper Darby community. Bankruptcy is a legal procedure that may help you stay in the place you love. An experienced bankruptcy lawyer can help you learn the benefits and risks of bankruptcy.
The attorneys at Young, Marr & Associates have years of experience finding ways their clients can escape debt without unnecessary risks. Your information is confidential, and your initial consultation is free of charge. We handle Chapter 7 and Chapter 13 cases and are known for proactive efforts. Call us at (215) 701-6519 to schedule a consultation.
Overview of Bankruptcy Petitions in Upper Darby, PA
The Eastern District of Pennsylvania is where residents of Upper Darby, PA file bankruptcy petitions. Bankruptcy is a legal process meant to help eliminate or restructure the debt of people deserving of a clean slate. There are various types of filings. The most common bankruptcy petitions are usually filed under Chapter 7 or Chapter 13 of the US Bankruptcy Code.
A bankruptcy attorney should go over your finances and give you a sense of how the process will evolve. People considering bankruptcy usually get to this point after facing adversities that have tarnished their finances – a sudden illness or a severe accident, a divorce or a job loss are common life events triggering the need to file for bankruptcy.
Most bankruptcy attorneys will look at the following factors when helping a client file for bankruptcy.
Monthly Income and Expenses
The first step is asking if your debt exceeds your income. If the answer is yes, then filing for bankruptcy may be appropriate. A bankruptcy lawyer has to determine if your situation will satisfy what is called the “means test.” This test is determinative of whether bankruptcy is suitable but also what type or chapter is more appropriate for a particular situation.
Bankruptcy attorneys typically look at the types of debt owed in order to determine the “dischargeability” or possibility of debt elimination. “Unsecured debt” is usually eliminated through bankruptcy—in whole or portions depending on the chapter sought. The term “unsecured” means there is no property interest or collateral guaranteeing debt repayment. Debts considered unsecured are:
- Credit card debt
- Electric and other utility bills
- Medical bills
- Personal loans and lines of credit not attached to an asset
- Court judgments (not enforced through garnishments or any other proprietary interest)
- Unpaid back rent
If collection agents are harassingly calling and writing, this may be the time to talk to a bankruptcy attorney. Collection action is a legal procedure unpaid creditors must use to receive payment for delinquent bills. Failure to pay unsecured debts results in collection actions. Creditors seek a judgment that will allow them to obtain payment out of your wages or to file what is known as a “lien.”
A lien is an encumbrance on your property in that the creditor reserves a right on the value of an asset for the amount owed. Many people decide to file for bankruptcy at the point in which collection actions are looming or pending. A consultation with a bankruptcy attorney is critical at this point to determine what is the best course of action.
How Chapter 7 & Chapter 13 Bankruptcy Works
Before filing for bankruptcy, you will want to ensure that you understand what type of bankruptcy will meet your specific needs. Chapter 7 and Chapter 13 bankruptcy have different advantages depending on the financial position of the debtor.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows a debtor to liquidate their assets in order to pay off their debts. A representative appointed by the court sells the assets. Once the assets are sold, the representative takes the proceeds of the sale and distribute it to the creditors of the debtor. If you are worried that you might lose property that has sentimental value, you should speak with an experienced attorney before filing your petition.
After the creditors are paid, the debtor has certain debts discharged. As mentioned, the discharged debts may include medical bills, credit card bills, and personal loans. Under certain circumstances, the debtor may be able to discharge student loan debt. However, to discharge student loan debt, the debtor must prove that paying their student loans would put them in a dire financial situation.
Many people prefer to file for Chapter 7 bankruptcy because of how quickly the proceedings can be concluded. Barring any issues, a Chapter 7 bankruptcy can be completed within the span of three months.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows the debtor to develop a reorganization plan to repay their debts without having to sell off their assets. The debtor can consolidate their debts into a single payment that is easier to manage. Chapter 13 reorganization plans are preferred for debtors that have a steady source of income, but that cannot manage the amount of debt they possess.
A debt reorganization plan typically lasts for a period of five years. However, the debtor may be able to show cause for the plan to only last three years depending on their financial situation. It is important to note that creditors can challenge your petition for bankruptcy if they believe that you can afford your current debts.
To learn more about the protections offered by a bankruptcy filing, continue reading and speak with an experienced Philadelphia bankruptcy attorney.
Filing Bankruptcy Offers Important Protections
Filing for bankruptcy can offer a debtor a variety of different protections. These protections can also vary depending on the type of bankruptcy filed. The following is a list of bankruptcy protections that you may utilize.
Debt Relief or Discharge
Debts can be partly discharged or eliminated or canceled altogether. A skilled bankruptcy attorney will review all the indebtedness and specific circumstances affecting the debtor’s finances. With this information, he can ascertain the extent of debt relief that can be obtained. If the debtor has a disability or severe health condition causing an irremediable inability to pay debts, what is known as “hardship” can be established to ask for total debt discharge.
Keeping “Exempt” Property
People tend to doubt the bankruptcy process because they fear losing their home and other assets. However, the US Bankruptcy Code provides specific exceptions to give debtors relief; a legal concept called an “exemption.” These exemptions are based on comparisons between the amount owed and the value of the asset. Experienced bankruptcy attorneys can go over the workings of those provisions and give you a sense of what can happen in your unique circumstances.
Additional bankruptcy protections include:
- Your employment cannot be terminated because you file for bankruptcy
- Your 401K plan, pension plan, Keogh Plans, and IRAs cannot be taken
- Social Security payments will not be affected
In addition, it is a violation of bankruptcy laws to:
- Cut off utility services because someone has filed for bankruptcy
- Violate the “automatic stay,” a legal principle establishing that all communications between creditor and debtor must go through the bankruptcy court system until the petition is closed or dismissed
Call an Upper Darby Bankruptcy Attorney To Help With Your Case
At Young, Marr and Associates, our team of attorneys can help you make informed and financially sound decisions. If you’re increasingly overwhelmed by collectors and fear of losing your home, there is no time to waste. Let us be relentless advocates for your best interests. Call (215) 701-6519 today to set up a free consultation.