There are many things that can lead up to a decision to file for bankruptcy, and a number of different variables, but what is largely universal is that a bankruptcy is sought by a person or entity that has become so mired in debt that they feel that they are unable to pay all of their bills, and they need protection from the federal bankruptcy court. Some bankruptcy proceedings involve liquidation while others go in the direction of a reorganization that allows assets to be retained, and deciding which is appropriate for you requires a thorough understanding of all of the legal ramifications that are involved. If you are in the Philadelphia region and are trying to determine whether bankruptcy is right for you, then contact the Philadelphia bankruptcy attorneys at Reinherz Law. We will provide you with knowledgeable and experienced legal counsel and representation, as well as all that you need to know in order to take the appropriate steps.

There are several different types of bankruptcies, but the two that are most frequently filed for are Chapter 7 bankruptcy and Chapter 13 bankruptcy. The two are very different.

Under Chapter 7 bankruptcy, a business or individual will be required to sell a large amount of their property in order to pay down their debts. It is only once this step is taken that the courts allow unsecured debts such as credit card or medical debt to be eliminated. Some property, such as clothing, your vehicle and household furnishings are permitted to be retained, but when it comes to secured debt, such as a vehicle on which an asset is pledged as a guarantee of payment, you may be required to return the item, continue making payments or pay a lump sum based upon current replacement value rather than on the originally contracted debt. In order to qualify for Chapter 7, you must be able to prove that your disposable income is too low to qualify for a repayment plan under a Chapter 13 bankruptcy.  Under Chapter 7, you are still required to pay debts such as child or spousal support and tax debt.

Under Chapter 13 bankruptcy, a business or individual is permitted to propose a repayment plan for their debts that extends the payment period over three to five years. There are certain limits to the amount of debt that you can have in order to qualify for a Chapter 13 bankruptcy, and you must also be able to show that you have income that will cover the repayment plan that you are proposing. In exchange, you are given the opportunity to make up missed payments in order to avoid repossession or foreclosure.

Filing for bankruptcy has many advantages when you are uncertain about how to pay off your debt, but there are also many negative repercussions, so it is essential that you get advice from an experienced Philadelphia bankruptcy attorney to make sure that it is the right decision for your circumstances. Call Reinherz Law today to set up an appointment for more information.

Learn more about Bankruptcy here: https://reinherzlaw.com/philadelphia-bankruptcy-lawyer/