Philadelphia Chapter 7 Bankruptcy Attorney

The two most common paths for obtaining debt relief through means of bankruptcy in Philadelphia is to claim Chapter 7 or Chapter 13 bankruptcy. Pennsylvania Chapter 7 Bankruptcy is geared towards helping debtors whose income isn’t substantial enough for repaying their debts. Chapter 13 is for debtors who wish to reach an agreement with lenders. This enables them to repay their debts over a specified period of time while retaining ownership of property and assets..

To listen and watch Philadelphia chapter 7 bankruptcy attorney, David Reinherz, explain more about each type of bankruptcy watch this video on Pennsylvania Bankruptcy.

Unsecured Debt

Chapter 7 Bankruptcy assists individuals facing financial ruin by providing a “clean slate” which allows them to begin rebuilding their future. Once an individual claims Pennsylvania Chapter 7 Bankruptcy, unsecured debt is completed forgiven.

Unsecured debt that is forgiven includes debt from:

  • Personal Loans
  • Outstanding Medical Bills
  • Credit Cards

Unsecured debt that will not be forgiven includes:

  • Income Tax Debts
  • Student Loans
  • Child Support
  • Alimony
  • Debts (owed as a result of a DUI or DWI)

Referred to as “straight bankruptcy,” the goal of Chapter 7 is a bankruptcy discharge. This is obtained through a liquidation proceeding where the claimant hands the agreed upon (non-exempt) items over to the bankruptcy trustee who then proceeds to exchange the items for cash which is used to pay down unsettled debts. In most cases though, there are no assets to hand over to the trustee, since the rules allow folks to keep a generous amount of items. (See bankruptcy exemptions for more information)

Chapter 7 Means Test

A fresh start is ideal for people that are drowning in debt, but in order to proceed with this type of filing you must be eligible to do so. To qualify for Chapter 7 in Philadelphia you must first pass a “means test” which was put in place by a new law set forth by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) back in 2005. If you do not pass this particular test because you fail to meet the specified requirements, such as collecting a minimal income, you may be obligated to repay some of your debts which would make you eligible to file for Chapter 13. Fulfilling the criteria for qualification is dependent on the individual circumstances of each case.

Credit Counseling

If filing for Pennsylvania Chapter 7 Bankruptcy is the right decision for you, it is required that within the six months prior to filing, you successfully complete an approved credit counseling course. You will work with your attorney to gather documents and provide all needed information that is required to prepare the paperwork. The Law office will keep in communication with you during the preparation process for any other needed information and to deal with any pre-filing issues. We will then meet to review and sign the paperwork before filing. Your case will then be filed followed by a 341 Creditor hearing which is scheduled around 4-6 weeks after filing. After filing but before the case is completed, you will also need to complete an online Financial Management Course which gets filed with the course. Following the meeting of creditors, which is also known as the 341 Meeting, and about sixty to ninety days into the bankruptcy process, all debts will be written off or Discharged.

As your designated Pennsylvania Chapter 7 bankruptcy attorney, we at Reinherz Law Office will assess your situation while considering factors such as your debt to income ratio to determine whether you are eligible.

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