Quinlan Law Group, LLC has been providing much-needed bankruptcy support and understanding to clients all over the Commonwealth of Pennsylvania. No matter what financial trouble you may be facing, it would be our pleasure to help you understand your bankruptcy options and represent you if you decide you need our assistance. Our personal bankruptcy attorneys are equipped to explain the different types of bankruptcies and their benefits. If you need an experienced bankruptcy lawyer or just a little advice, call Quinlan Law Group, LLC.
Thousands of people file for bankruptcy in Harrisburg every year and is a viable option for more people and families than one might expect. The two most common types of bankruptcies filed are Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.
CHAPTER 7 BANKRUPTCY
Chapter 7 bankruptcies allow you to eliminate all unsecured debt, meaning it is not attached to a specific asset. Most people who file for Chapter 7 bankruptcy can eliminate credit card debt, utility bills, personal loans, and medical expenses. It can mean a fresh start for you and give you the financial freedom to get your life back. To learn if Chapter 7 is the right choice for you, get in touch with a qualified bankruptcy lawyer here.
WHO IS CHAPTER 7 BANKRUPTCY FOR?
- People who need help escaping insurmountable debt
- People who have lost their job/income and have struggled to find other income
- People who have gone through a divorce that are left financially unhealthy
- People who have family or they have themselves incurred heavy medical expenses from emergency health troubles
WHAT ARE THE REQUIREMENTS FOR CHAPTER 7 BANKRUPTCY?
Bankruptcy is often thought of as something to be embarrassed about or that makes you a failure. This is absolutely untrue and can be harmful in the way that these beliefs may stop people who very much need help and can greatly benefit from the help that a bankruptcy lawyer can provide. Both individuals and business can file for chapter 7 bankruptcy if it is the correct option. Some of the requirements for filing personal bankruptcy are as follows:
- Your debt is more than half of your annual income
- It would take you a minimum of five years to pay off your debt, even if you took extreme measures to pay it off (like selling your home)
- Your debt is a major source of stress to the point of where your debt is affecting your personal life, relationships, and/or health.
- You have very little or even no disposable income
Your monthly income is below the median income in your resident state
WHAT DOES CHAPTER 7 LOOK LIKE?
Once you recruit the help of a bankruptcy lawyer, what then? Chapter 7 bankruptcy is known as the “liquidations bankruptcy.” What this means is that if you successfully file, then all of your unsecured/non-exempt debts are completely wiped out. What this boils down to in Layman’s terms is that your bankruptcy lawyer will help you avoid foreclosures and car repossession, while helping you keep other things necessary for day-to-day life. However, you are required to sell all of your non-exempt property/items and use the proceeds to pay back as much as you can to your debtors and creditors.
This is why chapter 7 bankruptcy is known as liquidation bankruptcy. It allows you to keep the essentials you need for day-to-day life, and sell all other non-exempt possessions to pay back the creditors and debtors. Your debts like credit card balances, medical expenses, and other debts can all be eliminated. Chapter 7, with the help of your bankruptcy lawyer, can offer you a fresh financial start for life. If you are in Harrisburg and are considering declaring bankruptcy, contact one of our local Pennsylvania bankruptcy lawyers at Quinlan Law Group, LLC here.
WHAT ARE THE CONSEQUENCES OF CHAPTER 7?
To reiterate, you will get to keep only the essentials you need for daily life. Anything deemed non-essential you will be required to sell (liquidate) and give the entire amount to your debtors and creditors. So bankruptcy is by no means a “get out of jail free” card;there are very real consequences. Other notable things about chapter 7 bankruptcy are even if you do successfully file and get most of your debts erased, there are a few debts that will almost always remain. The debts that often still apply are expenses like taxes, alimony, child support, and student loans.
Additionally, filing bankruptcy will make your credit score drop by a substantial amount, usually somewhere along the lines of 100 to 200 points. Your credit report will show that you went bankrupt for the next 10 years, which will make it harder to take out loans and raise the interest rates you receive. And with chapter 7 bankruptcy, there is no protection at all for you co-signers. Double check if you are going to file for chapter 7 that you are not going to unknowingly harm any co-signers you’ve had in the past.
CHAPTER 13 BANKRUPTCY
Many who are not eligible for Chapter 7 bankruptcy may still have Chapter 13 as an option. Chapter 13 allows you to create a payment plan for the next few years that allows you to pay off your debt at a pace that works for you. During this time, creditors cannot take action to collect any debt against you.
Reach out to schedule your no-obligation case evaluation. We help those in need of assistance work toward a better solution.
WHAT CAN CHAPTER 13 BANKRUPTCY HELP PEOPLE DO?
- Stop foreclosure proceedings
- While your mortgage will still need to be paid, chapter 13 can make it so that your house cannot be foreclosed on.
- In some cases, the mortgage amount may even be modified to make the payments more manageable.
- It can not consolidate student loans
- With both types of bankruptcy (chapter 13 and chapter 7) student loans are NOT eliminated.
- However, chapter 13 can allow you to consolidate your student loans to make them more manageable.
- After successfully filing chapter 13, collection actions for your student loans will stop, making your life a bit less stressful.
- Protect your co-signers
- Contrary to chapter 7, chapter 13 bankruptcy protects both you and any co-signers from having collection action taken against you. Even while you are in your repayment plan.
- Your co-signer will have significantly more protection than if you were to file for chapter 7 bankruptcy.
- Save your vehicles
- Chapter 13 bankruptcy is often used to help prevent debtors and creditors from repossessing your vehicle.
- Overdue payments and the remaining finance amount will both be consolidated into the repayment plan.
WHAT ARE THE REQUIREMENTS FOR CHAPTER 13 BANKRUPTCY?
We recommend calling a bankruptcy lawyer like Quinlan Law Group, LLC in Camp Hill if you are considering filing bankruptcy. Professionals often give free assessments or initial advice that can get you more definitive answers to your exact situations. That being said, here are some common requirements to file for chapter 13 bankruptcy:
- There are some monetary and informational requirements you’ll need when filing for chapter 13 bankruptcy. That includes:
- You must pay the mandatory $235 filing fee to the court, around $75 in administrative fees, and whatever fee your bankruptcy lawyer charges
- Provide a list of the agencies you owe money to and how much
- Provide a list of the properties you own
- Provide a list of all the contracts and leases in your name
- Provide a detailed account of your monthly budget (income and expenditures)
- Provide any tax information you have like W2 forms and tax returns
- You must have no more than $394,725 in debt that is not exempt
- Examples: Credit card debt, personal bills, medical expenses, etc.
- You must have no more than $1,184,200 in exempt debt
- Examples: Mortgages, Auto loans, etc.
- You must not own a business or be a proprietor for chapter 13 bankruptcy
- You must show that you have a reliable income and can make monthly payments towards your debts
WHAT DOES “REORGANIZATIONAL BANKRUPTCY” LOOK LIKE?
Some people, even though they qualify for chapter 7 bankruptcy, still choose to file for chapter 13. The reason for this is because, under chapter 13 bankruptcy, there are more protections and perks. Chapter 13 is considered “reorganizational bankruptcy” because of the way it is structured. With this type of bankruptcy, instead of having a majority of your debt washed away with heavy consequences, you agree to pay back your debts in reasonable payments over three to five years. Chapter 13 bankruptcy is helpful for people who have a steady income but are constantly being harassed by creditors and debtors trying to collect. Chapter 13 gives people a chance to breathe, regroup, and work with a bankruptcy lawyer or court to create a payment plan that works for both the collectors and the person in debt. With this kind of debt, once the filing is complete, you work closely with a court-appointed trustee who will collect and distribute your payments to various creditors. During the repayment process, no financial collecting action can be taken against you or any co-signers you have.
CONSEQUENCES OF FILING CHAPTER 13 BANKRUPTCY
Similar to chapter 7 bankruptcy, if you successfully file for chapter 13 bankruptcy, it will remain on your credit report for up to seven years. This can make it very difficult to apply for any sort of loan or credit since, more times than not, you are not allowed to apply for any new credit at all. Even if you do manage to secure a loan, the interest rate will likely be high for the duration of the seven years that it remains on your credit report. Also with chapter 13, you can expect a drop in your credit score as well. Though there are many factors going into exactly how much, like your current score, you can likely expect a drop anywhere from 25 to 125 points. As mentioned above, you will also need to pay back your agreed-upon debts over the three to five year period. Should you fail to make your payments, you will likely have to go back into court for further review of the situation and you may potentially be forced to sell off some of your assets to pay the debts.
Chapter 13 bankruptcy arguably has less severe consequences than chapter 7. However, it clearly has very real and serious consequences of its own. Don’t take this decision lightly, and consult a bankruptcy lawyer like Quinlan Law Group, LLC in Camp Hill for expert and experienced help.
HOW TO FILE BANKRUPTCY
Quinlan Law Group, LLC always recommends hiring a bankruptcy lawyer to help walk you through the process. There are free legal services that can help you find a bankruptcy attorney if you can not afford one, and in some cases, you can represent yourself. If you choose to represent yourself, there are non-attorney resources available to help with the paperwork, though they have very heavy restrictions on what they can and can not help you with. Almost always, the best course of action is to hire a good bankruptcy lawyer.
Fill out the proper forms
After you’ve decided on your representation, there are a number of bankruptcy forms you will need to fill out that list all of your debt, property, expenses, and income for the court to review. You can download the forms here. Make sure you fill out the forms as accurately and inclusively as possible, otherwise you may be responsible for any debt you have not listed.
Submit your completed paperwork
Once you have completed the forms, you need to start officially filing for bankruptcy by submitting your completed forms. If you have hired a bankruptcy lawyer, they will likely do this part for you.
Proceed depending on the court ruling and bankruptcy lawyer’s advice
After you have filed, the process varies depending on which form of bankruptcy you have filed for. The courts or your bankruptcy attorney will provide you guidance as to how to proceed after filing.
If you are in Pennsylvania and are seeking a high-quality bankruptcy lawyer, contact Quinlan Law Group, LLC for help today.