Philadelphia, PA Chapter 7 Bankruptcy Lawyers
Medical bills, credit card balances, past-due rent, and utility bills can pile up faster than any paycheck can keep up with. When collectors are calling, your wages are being garnished, or you are falling further behind each month, Chapter 7 bankruptcy can give you a true fresh start by wiping out most unsecured debt in a matter of months.
The Philadelphia Chapter 7 bankruptcy lawyers at Young, Marr, Mallis & Associates help individuals and families throughout the city find out whether they qualify, protect the property that matters to them, and move through the process with as little stress as possible. For a free and confidential consultation, contact us online or call 215-639-5297.
About Young, Marr, Mallis & Associates
Young, Marr, Mallis & Associates is a Pennsylvania and New Jersey law firm that represents people in bankruptcy, criminal defense, and disability cases. Our bankruptcy team has more than 30 years of experience and has handled over 10,000 consumer bankruptcy filings under Chapter 7 and Chapter 13. We file cases in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, which serves Philadelphia and the surrounding counties, and our Northeast Philadelphia office on Bustleton Avenue makes it easy for clients across the city to meet with an attorney in person.
What Is Chapter 7 Bankruptcy?
Chapter 7 is the most common form of personal bankruptcy. It takes its name from Chapter 7 of the U.S. Bankruptcy Code and is sometimes called “liquidation” or “straight” bankruptcy. Unlike Chapter 13, it does not require a multi-year repayment plan. Instead, it eliminates qualifying debts outright, usually within about four to six months of filing.
When you file, the court appoints a trustee to review your finances. In theory, the trustee can sell property that is not protected by an exemption and use the proceeds to pay creditors. In practice, most Chapter 7 cases are “no-asset” cases, meaning everything the filer owns is protected and nothing is sold. With careful planning, most people keep their home, car, household goods, and retirement savings.
Protecting Your Property With Exemptions
Exemptions are the laws that decide what property you keep. Pennsylvania lets filers choose between the federal exemptions and the Pennsylvania state exemptions, and the right choice depends on what you own and how it is titled. The federal exemptions often work well for people with equity in a home or car, while Pennsylvania’s rules can offer strong protection for property owned jointly by a married couple when only one spouse owes the debt. Choosing the right set of exemptions is one of the most important decisions in a Chapter 7 case, and it is one we make with you before anything is filed.
Who Qualifies for Chapter 7 in Pennsylvania?
To file Chapter 7, you must pass the means test. The first step compares your average household income over the six months before filing to the median income for a household of your size in Pennsylvania. If your income is below the median, you generally qualify. If it is above, a second calculation looks at your allowed expenses to decide whether you have enough disposable income to repay creditors through Chapter 13 instead.
Many people who assume they earn too much still qualify once their actual expenses are counted. If you do not qualify, Chapter 13 bankruptcy may be the better path, especially if you are behind on a mortgage or car loan you want to keep.
What Debts Chapter 7 Bankruptcy Eliminates
Chapter 7 can discharge a wide range of debts, including:
- Credit card balances
- Medical and hospital bills
- Past-due rent and utility bills
- Personal loans, including loans from friends and family
- Payday loans
- Debts from a failed small business
- Deficiency balances after a repossession or foreclosure
- Many judgments from lawsuits, including most car accident claims
- Social Security overpayments in most cases
Some debts cannot be discharged, including child support, alimony, criminal fines and restitution, and debts from injuries caused while driving under the influence. Student loans and income tax debts are usually not dischargeable, although older tax debts and student loans in cases of undue hardship can sometimes be eliminated under narrow rules.
How Chapter 7 Stops Creditors
As soon as your case is filed, the automatic stay takes effect. It requires most creditors to stop collection activity immediately, including wage garnishments, bank levies, lawsuits, collection calls, and repossessions. It can also temporarily pause a foreclosure, a sheriff sale, or an eviction, which may give you time to plan your next move. If a garnishment, sheriff sale, or repossession is days away, we can prepare an emergency bankruptcy filing to stop it quickly.
Utility companies also cannot shut off your service solely because you filed, although they may ask for a deposit to continue service going forward.
The Chapter 7 Process in Philadelphia
Chapter 7 is the simplest form of consumer bankruptcy, but it still involves strict rules and deadlines. Missing a requirement can lead to your case being dismissed without any debts being erased. A typical Philadelphia Chapter 7 case follows these steps:
- Credit counseling. You complete a short course with an approved provider within 180 days before filing.
- Preparing your petition. We gather your pay records, tax returns, and bills, then prepare your petition and schedules listing your income, expenses, debts, and property.
- Filing. Your case is filed in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, and the automatic stay begins.
- Meeting of creditors. About a month after filing, you attend a short meeting with the trustee, often held by video. Creditors rarely appear, and we prepare you for every question and attend with you.
- Debtor education. You complete a second short course on personal finances before your discharge.
- Discharge. If there are no objections, the court issues your discharge, usually around two to three months after the meeting of creditors.
Is Chapter 7 the Right Choice for You?
Chapter 7 works well for people whose debts are mostly unsecured and who are not trying to catch up on a mortgage or car loan. If you want to keep a home you are behind on, Chapter 13 may serve you better. If your debts are more manageable, alternatives such as debt consolidation may make more sense. During your consultation, we review every option and give you an honest recommendation, even if that means bankruptcy is not the right fit.
Frequently Asked Questions About Chapter 7 Bankruptcy in Philadelphia
How long does Chapter 7 bankruptcy take?
Most Chapter 7 cases take about four to six months from filing to discharge. The automatic stay protects you from most collection activity during that time.
Will I lose my house or car if I file Chapter 7?
Most people do not. If your equity is protected by an exemption and you stay current on your payments, you can usually keep your home and car. If you are behind on your mortgage, Chapter 13 is often a better option for keeping your home.
How does Chapter 7 affect my credit?
A Chapter 7 bankruptcy can remain on your credit report for up to ten years. However, many people see their credit scores begin to recover within a year or two because their debts have been eliminated and their debt-to-income ratio improves.
Will my employer find out that I filed for bankruptcy?
Your employer is generally not notified of a Chapter 7 filing. The main exception is when your wages are being garnished, in which case the garnishment will stop once the case is filed.
Can I file Chapter 7 if I have filed bankruptcy before?
Yes, but there are waiting periods. You generally cannot receive a Chapter 7 discharge if you received one in a case filed within the past eight years. Different time limits apply if your earlier case was a Chapter 13.
How much does it cost to file Chapter 7?
There is a court filing fee, and in some cases the court will allow you to pay it in installments or waive it. We explain our attorney fees clearly during your free consultation so there are no surprises.
Talk to a Philadelphia Chapter 7 Bankruptcy Lawyer Today
Debt can feel overwhelming, but you have options. The Chapter 7 bankruptcy lawyers at Young, Marr, Mallis & Associates can review your situation, explain whether you qualify, and guide you through every step toward a fresh financial start. Your consultation is free and confidential. Contact us online or call 215-639-5297 to get started. We help clients with Chapter 7 cases throughout Philadelphia.