Starting Over After Declaring Bankruptcy in Pennsylvania

As calm and rational as we try to be about it, our culture has ingrained it into us that bankruptcy is scary. It’s a common misconception that after declaring bankruptcy, while you’ve gotten away from your creditors, your life has gotten away from you. “How am I ever going to get a job, buy a car?” you might wonder. “What about buying a home, getting a loan?” Young, Marr & Associates are experienced bankruptcy lawyers serving Pennsylvania and New Jersey, and they’re here to help you get back on track.

Close-up of a bankruptcy petition

Chapter 7 VS. Chapter 13

There are various types of bankruptcy, some more forgiving than others. Typically, an individual is going to file for either Chapter 7 or Chapter 13 bankruptcy. The essential difference is that, while Chapter 13 bankruptcy requires an individual to pay back all of their debt over a 3-5 year period, Chapter 7 bankruptcy, which moves more rapidly (3-6 months on average), completely eliminates most debts, including credit card debt and utility bills. (Notable exceptions include student loan debt, child support debt, and tax debt). For these reasons, many of those who qualify tend to opt for Chapter 7.

¬†You Don’t Have To Lose It All

Movies and TV have probably misled you. Bankruptcy does not necessarily mean that your house is going to be bought, your car is going to be towed away, and all your furniture is going to be loaded onto a truck.

With Chapter 13 bankruptcy, you can keep your home by distributing the payments you’ve missed out over the course of years. With Chapter 7, while the lender will be able to foreclose after several months if you are behind on your payments, if you are up to date, you may be able to save your house.

Home floating on a life preserver

Rebuilding Your Life

When it comes to credit, nothing is permanent — good credit can turn bad, and vice versa. That’s great news for anyone who’s declared bankruptcy.

It’s true that the fact that you filed for bankruptcy will remain visible in your financial records for ten years. However, that doesn’t mean that you’re locked into a box. With a clean slate on the bills you’d previously been behind on, you actually have an opportunity to build new credit better than before.

But what about getting a job? Won’t employers be hesitant to hire somebody who has declared bankruptcy in the past? The short answer is no. Both government and private employers are prohibited from job discrimination based on bankruptcy under No. 11 U.S.C. sec. 525.

As for a credit card, you have options there, too:

  • You can use a debit card in place of a credit card.
  • If the creditor approves, you may be able to keep a card you held prior to the bankruptcy.
  • You can have a secured credit card backed by your own bank account.

If you’re struggling with overwhelming debt, call Young, Marr & Associates today at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania to schedule your free, private consultation. Our bankruptcy firm may be able to help.