Northeast Philadelphia Bankruptcy Lawyer
Filing for bankruptcy can seem like a frightening prospect. However, bankruptcy can offer an individual that is drowning in debt a fresh start. It is important to understand the multiple types of bankruptcy and which type of bankruptcy would be best for your unique financial situation. If you or a family member need assistance filing for bankruptcy, contact an experienced Northeast Philadelphia bankruptcy lawyer today.
Young, Marr & Associates understands the uncertainty involved with filing for bankruptcy, and we are prepared to guide you through the process. Whether you are choosing to file for Chapter 7 or Chapter 13 bankruptcy, our firm can ensure that you receive the legal representation that you deserve. To schedule a free legal consultation to discuss your bankruptcy claim, contact Young, Marr & Associates at (215) 607-7478, or contact us online.
Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy in Pennsylvania
Bankruptcy filings are separated into various categories referred to as chapters. Chapter 7 bankruptcy and Chapter 13 bankruptcy are the most commonly used chapters for individuals looking to file a bankruptcy petition. Each of these chapters has different advantages and benefits that you should know about before filing for bankruptcy.
Chapter 7 Bankruptcy
Many people prefer to file for Chapter 7 bankruptcy because of how quick the process can be completed. Most Chapter 7 bankruptcy filings are resolved within 90 days of the initial filing.
To begin a Chapter 7 bankruptcy, the debtor must file a bankruptcy petition with the bankruptcy court that manages cases where the debtor lives. If the debtor is filing a petition for their business, they must file in the state where they have their principal place of business. The debtor must also include the following information with their initial filing:
- The debtor’s assets and liabilities
- Documentation of their current income and monthly expenses
- Information about any contracts or leases the debtor entered into
- A statement detailing their financial situation
- A list of creditors that the debtor owes and the amount of the debt
- A list of property owned by the debtor
Once a person files for Chapter 7 bankruptcy, they are assigned a case trustee that will oversee their case. Chapter 7 requires a debtor to sell certain assets in order to satisfy the debt owed to their creditors. The bankruptcy trustee is in charge of this sale and will distribute the proceeds of the sale to the creditors.
Some debtors may worry that they could lose all their property when filing for Chapter 7. However, there are exemptions for what can be sold during a Chapter 7 filing. For example, if the debtor owns a home, they will not have to sell their home to satisfy their debt.
After selling their property, the debtor receives a discharge of multiple forms of debt from credit cards to medical bills. In some unique cases, a debtor may even be able to discharge their student loans.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows a debtor to negotiate with their creditors to reorganize their debt. The goal of reorganizing their debt is to consolidate their debts into a single monthly payment that will have a lower interest rate than their current debts.
The repayment plan gives a debtor five years to pay off their money owed to creditors. However, in some circumstances, the court may permit the debtor to enter into a three-year repayment plan.
One of the biggest advantages of filing for bankruptcy is that a debtor can save their home from foreclosure. While the debtor will still have to continue paying their mortgage, they may have lower payments.
Once a debtor completes their five-year repayment plan, they will be discharged from debts owed to their creditors. If the debtor misses a payment on their repayment plan, this could negatively affect their agreement with the court and their creditors.
Another benefit provided by filing for any type of bankruptcy is the automatic stay. The automatic stay prevents creditors from contacting you to collect their debts while the bankruptcy proceedings are still pending. This will give a debtor time to focus on their bankruptcy filing.
It is important to note that whether you file for Chapter 7 or Chapter 13 bankruptcy, a creditor may contest whether your financial situation is dire enough to support a bankruptcy claim.
Contact Our Experienced Northeast Philadelphia Chapter 7 Bankruptcy Attorneys Today
If you require assistance petitioning for bankruptcy, contact an experienced Philadelphia Chapter 7 bankruptcy attorney. At Young, Marr & Associates, our bankruptcy attorneys possess decades of combined legal experience, and we are prepared to offer you the legal representation you need to streamline your bankruptcy filing. To schedule a free legal consultation to discuss your bankruptcy filing, contact Young, Marr & Associates at (215) 607-7478.