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Consumer Bankruptcy Questions in PA

Frequently Asked Questions about Consumer Bankruptcy in Pennsylvania

Answers from seasoned attorneys in Lancaster and Reading (Wyomissing)

The following questions and answers will give you a general explanation of bankruptcy. For more information about bankruptcy law and how it might help you, please contact Case & DiGiamberardino P.C. Our firm has assisted clients in southeastern Pennsylvania in Berks, Lancaster, Lebanon, Lehigh, Schuylkill, Montgomery, Chester and Northampton Counties since 1984.

Consumer bankruptcy FAQ

Consumer bankruptcy FAQ

How will I know that declaring bankruptcy is right for me?

An attorney experienced in bankruptcy law can help you determine the options that best suit your particular situation. For consumers, filing for Chapter 7 relieves most of your debt, but not all. Filing Chapter 13 provides a structured repayment plan to address your debt.

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What do I need to do to begin the bankruptcy process?

Your first step is to inventory your past and present debts. You will also need a list of your assets to include in your petition in the bankruptcy filing. Schedules of assets and liabilities, along with a statement of your financial affairs, comprise the petition you will file with the bankruptcy court, accompanied by your filing fee.

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When does filing Chapter 7 make sense?

When the following conditions exist, filing Chapter 7 may be your best bankruptcy option:

  • You cannot pay your debts
  • Your creditors are pestering you or threatening to sue you
  • You do not have any debts with co-signers
  • You are current on your mortgage or other secured loans

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When does filing Chapter 13 make sense?

If you need some breathing room to pay your debts, Chapter 13 could be your best bankruptcy option, especially in the following cases:

  • You are behind on your mortgage payments
  • You owe the Internal Revenue Service (IRS)
  • You do not qualify for Chapter 7
  • You need relief from collection proceedings
  • You have debts with co-signers
  • You can pay your debts within three to five years
What debts does bankruptcy not cover?
Bankruptcy cannot relieve you of all debts. The following will probably still be your responsibility:

  • Alimony & child support
  • Drunk driving judgments
  • Criminal fines
  • Criminal restitution
  • Debts incurred by fraud or intentional wrongdoing
  • Back taxes less than 3 years old
  • Student loans
  • Recent large purchases of more than $550 for luxury goods made within 90 days of filing

Our lawyers can review the list with you to give you a full understanding of the debts covered and not covered.

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Which bankruptcy option wipes the slate clean?

Except for those debts that cannot be discharged by law, both Bankruptcies, Chapter 7 and Chapter 13, will give you a fresh start.

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If I file Chapter 13, what are my creditors’ rights and responsibilities?

When you file, you must include your proposed plan. Your plan will describe how you intend to repay a defaulted mortgage or car loan, will provide for payment of debts called “l priority” debts, such as taxes, and may provide for some distribution to your unsecured creditors from your plan payments.   Once the bankruptcy court appoints a trustee who will oversee your plan, your creditors receive and have the right to object to the plan if your plan does not meet the requirements of the Bankruptcy Code. If your plan is approved, you make monthly payments to the bankruptcy trustee, who then distributes the funds to your creditors according to your plan.

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How many times can I file for bankruptcy?

An individual cannot obtain a discharge in a later filed Chapter 7 bankruptcy if he/she has filed for Chapter 7 or Chapter 11 bankruptcy within the previous eight years and received a discharge or received a Chapter 13 discharge in the within the previous six years. An individual cannot obtain a discharge in a later filed Chapter 13 bankruptcy if he/she has been granted a Chapter 7, 11 or 12 discharge within the past four years or a Chapter 13 discharge within the previous two years. It is important to note that what may be affected is your entitlement to a discharge in a subsequent case, not your eligibility to file a subsequent case.  There may be circumstances that filing a bankruptcy may be in your best interest even though you may be ineligible to receive a discharge.

That is why it is important to consult our experienced bankruptcy attorneys so you fully understand the bankruptcy options and their consequences.

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How long does a bankruptcy stay on my record?

Bankruptcies remain on credit reports between seven and ten years. Deciding to declare bankruptcy is a serious decision. That is why it is important to consult our experienced bankruptcy attorneys so you fully understand the bankruptcy options and their consequences.

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How can I file for bankruptcy?

We highly recommend you hire an attorney to file the required petitions. You must file a petition with the United States Bankruptcy Court in the district that has jurisdiction over you and/or your assets. It must be signed under oath under penalties of perjury, and it must list all assets and the value of each, and the amount of all debts.

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Must I still pay my bills after I file for bankruptcy?

Yes. You must continue to pay your monthly bills, including mortgage payments on a property you intend to retain, car payments on a car you intend to retain, rent, electric and other utility bills, house and car insurance, and other regular bills.

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