Eastern Pennsylvania Bankruptcy Attorneys Guide You To A Fresh Start With Chapter 7 Bankruptcy
What Is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a proceeding in which your nonexempt assets, if any, are sold (or “liquidated”) by a court-appointed trustee, following which, the proceeds are distributed to your creditors. In most Chapter 7 cases, however, all of the debtor’s assets are exempt. When there are no assets to sell, creditors get no payments. But all or most of your debts are completely forgiven or discharged and you are able to retain all of your assets.
Which Of My Debts Will Be Discharged?
With a few exceptions, Chapter 7 eliminates the following debts:
- Credit card debt
- Medical debt
- Personal loans
- Some taxes
- Lawsuit debt/civil judgments (including personal injury)
- Deficiency debts on foreclosures and repossessed vehicle
Under Chapter 7, not all debts will be discharged. Some of those debts include:
- Student loans (unless there is undue hardship)
- Debts incurred due to fraudulent conduct
- Damages for personal injury to someone else resulting from DUI
- Alimony and child support
- Criminal fines and restitution
- Court fees
- Certain taxes
Which Of My Property Is Exempt From Liquidation?
Up to a certain value, most personal property items are exempt. Exempt property can include:
- Equity in your home
- Clothing and jewelry
- Household goods, furnishings and appliances
- Pensions, including money in 401k plans
- A portion of your unpaid but earned wages
- Tools of your trade or profession
- Damages awarded in personal injury cases
- Public benefits accumulated in a bank account, for example Social Security or unemployment compensation
What Happens To My Secured Debt?
If you owe money on a home, car or other property that is secured (for example, either by a mortgage, security agreement or other type of lien), you have the following options under Chapter 7:
- Retain and reaffirm – You may retain the property by “reaffirming” the debt and continue making regular payments to the creditor.
- Redeem and retain the property – You may “redeem” and retain the asset by making a lump-sum payment, in the amount of the fair market value, to the creditor.
- Surrender the property – Your last option is to surrender, or give up, the property to the creditor and discharge all further liability for the debt.
If you have assets that you don’t want to lose and are able to make some payments toward your debts, Chapter 12 or Chapter 13 may be a better option for you. Our consumer bankruptcy attorneys are standing by to help navigate you through this process and advise you on your best options.
Get Started With A Pennsylvania Chapter 7 Bankruptcy Attorney
Our Berks County attorneys are ready to answer your bankruptcy questions and help you get a fresh financial start. Contact our experienced, southeastern Pennsylvania bankruptcy law firm today to discuss your case. Our three offices are conveniently located in Lancaster, Malvern and Wyomissing. Contact Case & DiGiamberardino, P.C., at 610-936-6650 or online.