Making the Decision to File for Bankruptcy Protection in Pennsylvania

Filing for bankruptcy can be a viable way of eliminating your overwhelming debt and starting over financially, but before you choose to, consider the following factors. This will help you decide whether or not Chapter 7 or Chapter 13 bankruptcy is the best choice for you:

1)      Qualifying for bankruptcy. Chapter 7 bankruptcy requires that your income be under a certain amount to qualify, while Chapter 13 doesn’t allow your debts to exceed a certain amount.

2)      Your debt. When you file for bankruptcy, all your credit card debt, unpaid bills and other debts are eliminated. You can also discharge, or at least modify, secured debts, such as car loans or mortgages.

3)      Your future credit. When you file for bankruptcy, it shows up on your credit history for 10 years, as well as in public records.

4)      Filing expenses. The process of filing for bankruptcy is can be costly, once you factor in court fees, consumer counseling, financial management education and other expenses. If your debt isn’t significant enough to outweigh taking on this expense, you may want to reconsider.

5)      Repossessions and foreclosures. Filing for bankruptcy will invoke an automatic stay, which will delay or even stop the repossession or foreclosure process.

6)      Debt collection lawsuits. If you’re already facing a lawsuit from your creditors, filing for bankruptcy will keep it from progressing with an automatic stay.

7)      Your property value. Although Chapter 13 allows you to keep all of your property, the amount you’ll have to pay your unsecured creditors will equal the value of any nonexempt assets and property you have. With Chapter 7 bankruptcy, you can keep a certain amount of property, but any property you have that is considered nonexempt by bankruptcy law, such as vacation homes, could be liquidated or sold to repay your creditors.

It can be a complicated decision to file for bankruptcy protection, so be sure to work with an experienced and knowledgeable attorney in Pennsylvania for the advice you need. 

By Harold Shepley | Published April 6, 2015 | Posted in Bankruptcy, Chapter 13, Chapter 7, Debt | Tagged credit, debt collection lawsuits, filing for bankruptcy, qualifying for bankruptcy | Leave a comment