Souderton Bankruptcy Lawyer

Financial struggles can ripple across your life and make various other aspects of your daily life much harder. You might resist the idea of filing for bankruptcy. After all, bankruptcy is not exactly perceived as a good thing. However, it can be extremely helpful to those drowning in debt, and our attorneys can help you get your case started.

When you file for bankruptcy, you must submit a petition to the federal bankruptcy court in your area. We must take stock of all your properties, assets, and accounts and report them to the court. What happens next largely depends on which bankruptcy chapter you choose. Most people file under Chapter 7 or 13, but other chapters exist and serve different financial needs. Not everyone is eligible for bankruptcy. Simply having debt might not be enough. Your attorney can help you determine whether you were even eligible and which chapter may work best for you. The duration of the bankruptcy process may vary, with some cases finishing in a few months and others taking several years.

Get a confidential, free evaluation of your case by calling (215) 701-6519 and talking to our bankruptcy lawyers at Young, Marr, Mallis & Associates.

What Happens When I File for Bankruptcy in Souderton?

Filing for bankruptcy is a long, complex process. It does not happen all at once or overnight. The first thing we have to do to kickstart your bankruptcy case is to file a petition with the court. Since bankruptcy is governed by federal law, our bankruptcy lawyers must file the petition with a federal bankruptcy court in your area. The petition should explain why you are filing for bankruptcy, how you meet the necessary eligibility criteria, and why the court should approve your petition.

Once the court accepts your petition, but before the case is ultimately decided, the court should impose something called an “automatic stay.” The automatic stay, under 11 U.S.C. § 362(a), is a court order that prevents lenders and creditors from taking legal action against you regarding unpaid debts. If legal action is currently pending, like a mortgage foreclosure or other lawsuit, the action must be halted immediately.

The petition must contain information about your finances. We must assess your accounts and assets and report everything to the court in your petition. This includes assets, properties, or accounts that might exist outside the United States. If any assets are unreported, the court might suspect you of fraud. If information is left out accidentally, we must explain the situation to the court and correct the mistake immediately.

The rest depends on which bankruptcy chapter is involved in your case. Most people choose Chapter 7 or 13, usually, as these are geared more toward individuals rather than businesses or organizations. However, other chapters exist that might better suit your needs, and you should ask your lawyer about them.

What Happens to Your Property When You File for Bankruptcy in Souderton?

What exactly happens after you file for bankruptcy, anyway? The answer to this question largely depends on your specific financial situation and the bankruptcy Chapter under which you have filed your case.

As described in greater detail below, your assets might be liquidated, and the proceeds be used to pay your debts. Alternatively, you might have to follow a strict payment plan for a relatively long period of time. Additionally, how your case proceeds depends on the extent of your debts and what your assets and finances look like.

In short, you should talk to your lawyer about your property before you file for bankruptcy. Are you okay with losing assets to the bankruptcy process, or would you prefer to save as many of your assets as possible? Your lawyer might be able to help you take advantage of state or federal exemptions that might allow you to retain certain properties.

Eligibility Criteria for Bankruptcy in Souderton

Not everyone is eligible to file for bankruptcy. Simply being in debt, even significant debt, is not enough to file for bankruptcy. Depending on which chapter is involved in your case. You might have to meet additional eligibility criteria.

Chapter 7

If you wish to file under Chapter 7, you must first establish that you are an individual person, a business partnership, or a corporation. If your monthly income is greater than the state median income, you must pass a “means test.” The means test is a way that courts assess whether a bankruptcy petitioner has the financial means to handle their debts without the court’s intervention. This test prevents people from abusing the bankruptcy court and having debts discharged simply because they do not wish to pay.

Additionally, you cannot file for Chapter 7 bankruptcy if a previous bankruptcy petition was dismissed in the past 180 days because you failed to appear in court or comply with court orders or dismissed the petition yourself voluntarily. Also, you might be required to seek credit counseling from a court-approved counseling agency before filing your petition.

Chapter 13

Chapter 13 bankruptcy is a bit different because petitioners typically must have a regular, steady income. Under Chapter 13, you must develop and adhere to a strict payment plan for several years. This is not possible without an income. Additionally, we must show the court that your combined debts are less than $2.75 million. This includes both secured and unsecured debts. Again, you may not file a petition if a prior petition was dismissed for certain reasons within the past 180 days.

Since Chapter 13 focuses on curing debts through a rigorous payment plan, petitioners may not incur new debts without first talking to the bankruptcy trustee in charge of their case. If you are planning to incur new debts in the coming years for any reason, talk to your attorney about it first. Such plans might need to be put on hold before you can file your case.

Contact Our Souderton Bankruptcy Lawyers for Support Now

Get a confidential, free evaluation of your case by calling (215) 701-6519 and talking to our bankruptcy lawyers at Young, Marr, Mallis & Associates.