Can I File Bankruptcy in PA or NJ if I’m Not Behind on My Bills?

When faced with the possibility that you may need to file for bankruptcy, you should choose to file sooner rather than later. Waiting until you are behind on your bills to file for bankruptcy could be a mistake that you may come to regret in the future. If you or a family member are considering filing for bankruptcy, contact an experienced Philadelphia bankruptcy attorney today. Filing for bankruptcy can be a stressful experience. However, it may be just what you need to regain financial freedom. Young, Marr & Associates are here to explain whether you can file bankruptcy when you are not delinquent on your bills.

When You Can File for Bankruptcy

Whether you are considering filing for bankruptcy in Pennsylvania or New Jersey, it is important to note that you do not need to be behind on your bills to file for bankruptcy. When examining a petition for bankruptcy, the court is not especially interested in knowing whether you are current on all your payments or whether you have fallen behind on multiple payments.

The bankruptcy court is primarily concerned with the debtor’s income level and how their financial situation holds up when analyzed using the means test. The means test examines the ability of the debtor to pay their bills and how paying those bills would affect their financial situation. If paying all bills on time would make it practically impossible for the debtor to survive on their remaining funds, they will be eligible to file for bankruptcy.

Several people choose to file for bankruptcy before they become delinquent on payments. An early filing of bankruptcy is often seen where a debtor is about to enter into financial hardship due to a divorce, failure of a business, or another major event in their life.

Anticipating a long period of financial hardship can benefit you greatly if you choose to file for bankruptcy. Many people continue trying to make payments until they are ready to file for bankruptcy. Filing as soon as possible allows you to keep the money for payments that you would have made on bills.

Additionally, if you choose to file bankruptcy while you are not delinquent, this can help you preserve your credit score. Having a relatively high credit score after filing for bankruptcy can help you credit bounce back sooner.

It is important to note that creditors can contest your bankruptcy filing if they believe you can afford to pay your bills.

To learn more about the types of bankruptcy you can file, continue reading, and speak with an experienced New Jersey bankruptcy lawyer today.

Types of Bankruptcy

If you wish to file for bankruptcy, you should be familiar with the different types of bankruptcy. Both individuals and legal entities can opt to file for bankruptcy. The chapter of bankruptcy filed will depend on the party filing and the unique situation of the filer.

When a person files for bankruptcy, they will receive an automatic stay on their debts. An automatic stay prevents creditors from contacting a debtor to pursue money that is owed. This allows the debtor time to gather the financial information they need to file for bankruptcy successfully. Additionally, the automatic stay period will only end once the bankruptcy proceedings have concluded.

The most common types of bankruptcy filed by individuals are Chapter 7 bankruptcy and Chapter 13 bankruptcy. In a Chapter 7 bankruptcy, the debtor will have to sell the property to pay off their debts. The proceeds from this sale will then be used to pay off creditors.

After about three months, the debtor will then be eligible to have multiple forms of debt discharged. A debtor could discharge medical bills, credit card bills, utilities, and even student loans in some cases.

Chapter 13 bankruptcy is when a debtor is permitted to create a repayment plan to pay off their debt to creditors. This plan reorganizes debts owed by the petitioner into a more manageable form. Chapter 13 bankruptcy is usually entered into by individuals that still have a steady stream of income, but not enough to handle their bills.

If the court and the creditors approve the repayment plan, the debtor must repay their bills over the course of five or three years.

Contact an Experienced PA and NJ Bankruptcy Attorney Today

If you or a family member require legal assistance to file for bankruptcy, consult with an experienced New Jersey bankruptcy lawyer. With decades of combined legal experience, our bankruptcy lawyers are prepared to use their knowledge to help you manage your bankruptcy case. We know that bankruptcy can be a process filled with uncertainty, but we are here to alleviate your concerns. To schedule a free legal consultation, contact Young, Marr & Associates at (215) 607-2715, or (609) 755-3115 if you reside in New Jersey.

Have You:

Been paying credit card balances that seem to never go down?

Lost your job and are now having trouble keeping up?

Attempted to work out a payment arrangement to no avail?

Been notified of a mortgage foreclosure action?

Been denied for a mortgage or other line of credit?

If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.

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