Aston Bankruptcy Lawyer

Filing for bankruptcy is one thing that nobody wants to experience. Unfortunately, economic success or stability is not guaranteed, and keeping up with debts and bills might become impossible. If your debts feel inescapable and are only growing, an attorney can help you file for bankruptcy.

You may want to consider bankruptcy if you are only making minimum payments or cannot make minimum payments anymore, putting you at risk of default. For individuals, Chapters 7 and 13 bankruptcy are common, although other options exist. Your attorney should help you decide which chapter is right for your case, what state and federal exemptions allow you to shield some assets and what pros and cons you face in filing for bankruptcy.

For a free, confidential case analysis, call our bankruptcy attorneys at Young, Marr, Mallis & Associates at (215) 701-6519.

When is the Right Time to File for Bankruptcy

Eventually, you may need to recognize that now is the time to speak to a bankruptcy lawyer instead of resisting filing for bankruptcy.

First, consider your debt versus your income. If your debts are so high that you cannot afford to keep up with them, or you no longer have an income, it may be the right time to file.

Consider how many different debts you have. If you have too many, you have a lot of minimum monthly payments to maintain. If you can only afford the minimum payment, interest will continue to accrue, and your debt will grow. If you cannot make minimum payments, you risk defaulting or going to collections.

It might be the right time to file if you are at risk of losing property. If you cannot keep up with car or mortgage payments, you may face repossession or foreclosure. Bankruptcy may help you regain control of your finances and potentially help you retain exempt property.

Filing Under Chapter 7 vs. Chapter 13

Chapters 7 and 13 are popular among individuals and married couples with different uses and advantages:

Chapter 7

Chapter 7 bankruptcy is often called liquidation bankruptcy. A bankruptcy trustee appointed to your case by the court may account for your assets and liquidate them, using the proceeds to pay your debts.

Many petitioners lack sufficient assets to cover all their debts during the liquidation process. Remaining debts may be eligible for discharge. If debts are discharged, you are no longer liable for paying them.

Credit cards, medical debts, and utilities are usually eligible for discharge. Under § 523(a), tax debts, debts obtained by fraud, and certain other debts may not be discharged.

According to Under 11 U.S.C. § 726(a), assets may be distributed to certain creditors before others.

Chapter 7 may be a good option for those with minimal assets to lose. If you do not own a home or are willing to part with some of your assets, Chapter 7 may be very helpful. You also must pass a means test to use Chapter 7.

Chapter 13

Chapter 13 focuses on reorganizing debts rather than liquidating assets. Under § 1322(a), you and your lawyer must devise an aggressive yet feasible payment plan for your debts.

With approval from the court and creditors, you must make payments according to the plan, usually for about 3 to 5 years. Once the payment plan is complete, certain debts may be discharged.

A major advantage of Chapter 13 is that you do not have to lose your home, vehicle, or other assets. Many people can avoid things like foreclosure this way.

How to Protect Your Assets During Bankruptcy

If you are concerned about losing assets, talk to your attorney about how to claim exemptions. Exemptions exist under state and federal law, but you must pick one or the other, and the exemptions are not identical.

Federal law provides a homestead exemption under 11 U.S.C. § 522(d)(1), allowing homeowners to exempt a certain amount of equity in their homes from the bankruptcy process. Petitioners may exempt $27,900 as individuals or $55,800 as spouses who co-own a property.

Federal law also provides an exemption for vehicles under § 522(d)(2). You may exempt $4,450 from the sale of a vehicle from the bankruptcy process.

Additionally, you may exempt certain retirement accounts under § 522(b)(3)(C).

In Pennsylvania, there is no homestead exemption nor a motor vehicle exemption. However, you may exempt retirement accounts under 42 Pa.C.S. § 8124(b).

Pros and Cons of Bankruptcy in Aston

While bankruptcy can save your finances, it can take months or years to complete and overturn your life in the meantime. Before filing, it is vital that you talk to a bankruptcy lawyer about the pros and cons and decide what is best for your case.

Pros

One of the biggest benefits of bankruptcy is the automatic stay imposed under 11 U.S.C § 362(a). The stay is imposed once the court accepts your petition and prevents creditors from contacting you or taking legal action against you. If legal action is pending, proceedings must halt.

Another major benefit is the discharge of debts. Once debt is discharged, you are no longer required to pay it, and creditors cannot pursue payment from you. While not all debts can be discharged, those that can will relieve significant financial burdens.

Cons

You must also be aware of the negative side of bankruptcy. The process typically has a large negative impact on your credit. It can take a few years to rebuild your credit after bankruptcy, but it is possible. This may also affect your ability to seek future opportunities, like taking out a loan to start a business or attend school.

Contact Our Aston Bankruptcy Lawyers to Get the Help You Need

For a free, private case analysis, call our bankruptcy lawyers at Young, Marr, Mallis & Associates at (215) 701-6519.