Reading, PA Bankruptcy Lawyer

Bankruptcy is a word few people like to hear. No one wants to believe that they need to file for bankruptcy. However, if your home is in foreclosure or a creditor is suing you for an amount you cannot afford, then bankruptcy might be the first step toward the fresh financial start you need.

Bankruptcy is a complex legal proceeding. While you are permitted to file without a lawyer, it is not advisable. A debtor is required to comply with many federal, state, and local rules even if they are filing on their own. Without the assistance of our bankruptcy attorneys, you could make an error that results in a dismissed case or worse. Chapters 7 and 13 are common in cases involving individuals or couples filing for bankruptcy. You should speak to our team if your debts outweigh your income and you find yourself overwhelmed with unpaid bills. Bankruptcy might come with some uncomfortable consequences, but they are often worth a fresh start.

Call our law offices at (215) 701-6519 and allow our committed attorneys at Young, Marr, Mallis & Associates to conduct an initial review of your situation free of charge.

Understanding Bankruptcy in Reading, PA

Filing for bankruptcy often feels overwhelming. While our bankruptcy attorneys will handle your case, a good deal of responsibility falls on the filer. You will have to gather your financial records, statements, pay stubs, taxes, and other documents that our office will use to complete your bankruptcy schedules. Whether you file Chapter 7 or Chapter 13, there is a substantial amount of paperwork and evaluation before your case is filed. The success of many bankruptcy cases depends on the work that comes before the actual case is filed with the court.

Chapter 7 in Reading, PA

The most popular type of bankruptcy for individuals and couples is also the most common. In Chapter 7 bankruptcy, a filer can usually quickly eliminate most of their debts, including medical bills, credit cards, unpaid utilities, and personal loans. However, certain debts will survive Chapter 7, such as recent taxes, child support, alimony, criminal restitution, and most student loans.

Chapter 7 is sometimes referred to as liquidation bankruptcy because it is possible that a debtor will be required to sell some of their property to pay their creditors. A Chapter 7 trustee could take possession of your assets, sell them, and disburse the proceeds to your creditors. However, under the Bankruptcy Code and Pennsylvania law, provisions are available to protect your property. Known as exemptions, a Reading bankruptcy debtor will have to choose between the federal and state exemptions before they file.

Our office will examine your assets so you can make an informed decision. Fortunately, most cases do not require surrendering any property. In cases where the nonexempt property exists, you have the option of filing Chapter 13 or weighing the benefits of Chapter 7 against the property that you would lose.

You must qualify for Chapter 7. In addition to determining the value of your assets, our office will also have to conduct a means test calculation. This test looks at your income and expenses and compares them to the median income for families of the same size in Reading.

Chapter 13 in Reading, PA

A Chapter 13 bankruptcy is much longer and more complicated than Chapter 7. However, as a reorganization plan, it offers debtors much more flexibility and options. In some cases, an individual or couple will have too much income to qualify for Chapter 7 or will have nonexempt assets they wish to keep. Other people file a Chapter 13 because of the type of debt – perhaps their home is threatened by a mortgage foreclosure or real estate tax sale.

The significant difference between Chapter 13 and Chapter 7 is that the debtor will file a bankruptcy plan that proposes a three to five-year payment plan. The length of the plan will depend on your disposable income and the amount of debt you must pay back. For instance, a filer might qualify for a three-year plan. However, if they file a five-year plan, their monthly payments would be lower.

Your bankruptcy plan must be feasible, which means you must be able to afford the payment. The plan must also address your creditors’ claims. If a plan ignores or fails to pay a required creditor’s claim, the court will not approve it. At Young, Marr, Mallis & Associates, our goal is to draft a feasible plan that ensures you pay the minimum amount allowable under the law.

When Should You File for Bankruptcy in Reading, PA?

The decision to file for bankruptcy should be taken seriously. You are not negotiating with a creditor or two when you file for bankruptcy. It is a complicated legal proceeding. If you are slightly behind in a credit card or are struggling with a budget, bankruptcy might not be the best option. However, if your income is less than your monthly bills, a creditor is suing you, or your home is in foreclosure, then filing for bankruptcy could be the right move.

While not as extreme, even if you are capable of paying only the minimum interest payment on a number of credit cards that you do not use, you should still speak with our experienced bankruptcy lawyers.

How Bankruptcy Can Help You in Reading, PA

Bankruptcy is not a penalty. People often do not want to file for bankruptcy because they think of it as a punishment for poor money management. In reality, bankruptcy is a legal solution for people in deep debt. You cannot be expected to spend your life trying to pay debts that just keep getting bigger, and bankruptcy may be your way out.

One way that bankruptcy helps a lot of people is with an automatic stay. The court automatically imposes an automatic stay when you file. The stay halts legal proceedings pending against you related to unpaid debts. For example, foreclosure proceedings and lawsuits for unpaid debts must pause while your bankruptcy case is pending.

Another helpful aspect of bankruptcy and the automatic stay is that it stops creditors from contacting you. Many people contemplating bankruptcy are bombarded with calls, emails, and letters from creditors and collections agencies. Sometimes, these calls and letters are hostile, demanding payment immediately. When you initiate a bankruptcy case, these calls and letters must cease. Tell your attorney immediately if any creditors continue contacting you despite the automatic stay.

A bankruptcy case may also stop utility companies from shutting off your utilities if you are behind on payments. For example, if you have several months of unpaid electricity bills, filing for bankruptcy would force the power company to leave your lights on while your case is pending.

Finally, bankruptcy may allow you a fresh start. While there are some uncomfortable drawbacks to filing for bankruptcy, many people are eager to move on from their debt and begin anew.

Downsides to Bankruptcy in Reading, PA and How an Attorney Can Help You Prepare

Even though bankruptcy can be a big help to people struggling with their debts and finances, there are some drawbacks and disadvantages you should discuss with your lawyer before filing your case. Your attorney can help you identify how these drawbacks might affect you and how you can prepare for them.

First, when you complete your bankruptcy case, your credit score will likely take a big hit. People who file for bankruptcy often deal with poor credit for years after their case is over. This can present serious complications, but your lawyer can help you plan accordingly.

Poor credit might pose a problem when you apply for a loan to go back to school or start a business. It can also cause trouble when you go to make a major purchase, like a vehicle or a home. There is a chance your loan might be denied, or you are unable to make a large purchase. If you can get a loan or buy a new car, you might have to deal with higher interest rates.

If you plan on buying a house, starting a business, or taking out a loan in the near future, talk to your lawyer about your plans before you file for bankruptcy. There might be a way you can file your case so that you can achieve your goals after your case is over.

Will People Find Out That I Filed for Bankruptcy in Reading, PA?

One of the biggest concerns about filing for bankruptcy is embarrassment. Even if filing for bankruptcy is the right thing to do, it is understandable to be wary of what others might think. Bankruptcy might not be a legal punishment, but people might treat you differently if they know you filed.

Generally, the people in your life will not be notified of your bankruptcy case Unless they are creditors. Your creditors may be notified when you file for bankruptcy, often so they can abide by the automatic stay, among other things. This means that you can keep your situation private.

Although other people are not notified of your bankruptcy, your case might be a part of the public record. Bankruptcy cases go through the courts, and as with many court cases, there is a record of bankruptcy cases. These records are usually accessible to the public, at least to an extent. Anyone could look you up in the public court records, but they might not see every detail of your case. There might also be a fee involved, too.

While it is possible that other people can look up your bankruptcy records, they likely will not do so unless they are otherwise informed about your case.

While employers are not notified about an employee’s bankruptcy, it might come up in other ways. If you work in the financial field or otherwise deal with money and business transactions, a potential employer might search bankruptcy records for your name. Seeing you have filed for bankruptcy might impact how they view your skills with money and business.

Possible Alternatives to Filing for Bankruptcy in Reading, PA

Bankruptcy is not your only option. Other legal avenues might be worth exploring, and our team of experienced lawyers can help you. One possibility is debt consolidation or using debt settlement companies. While these companies often boast about how they can help you pay off debts, they tend to downplay the uncertainty of the situation. While debt settlement companies can help you consolidate debts and make them easier to pay, creditors must be willing to cooperate. If they do not, your situation might not be improved, and you will owe fees to the debt consolidation company.

You might instead take out a consolidation loan to pay off all your debts. Instead of paying multiple creditors, you only have to pay the one creditor who provided you with the loan. This can be helpful for some people, as multiple creditors might each have a high interest rate. A consolidation loan would only come with one interest rate.

The drawback is that banks usually demand some collateral for these kinds of loans. Depending on your situation and the size of the loan, the collateral might be something you do not want to risk, like your home.

A third possibility is to negotiate with creditors. In some situations, creditors might accept a large lump sum that is worth less than the actual debt. For instance, you might owe $100,000, but the creditor might be persuaded to accept a lump sum payment of $75,000. If you choose this path, hire a lawyer to help you. Creditors might be more willing to negotiate if you are supported by an attorney who knows what they are doing.

Our Reading, PA Bankruptcy Attorneys Can Help

Call our bankruptcy lawyers at Young, Marr, Mallis & Associates at (215) 701-6519 to schedule a confidential and free appointment to review your case.