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Pennsylvania Bankruptcy Lawyer

If you have found yourself deep in debt and unable to see a way out within the next few years, you may be considering bankruptcy proceedings. Although there has long been a stigma associated with bankruptcy, this method of debt relief can provide a fresh start for people who really need it, and therefore the stigma is lessening especially in these troubled financial times. Just because a person declares bankruptcy doesn't mean that they have been lazy or financially irresponsible. A number of events can befall people and be financially devastating, from job loss and downsizing, to sudden illness or injury that is not covered by health insurance, to divorce or other life-altering situations. Any of these can cause someone who may already be living paycheck to paycheck to fall behind and to become deeply embroiled in debt.

If this sounds like you, and if you are thinking that bankruptcy might be the best option for you, the first step is to contact a Pennsylvania bankruptcy lawyer attorney.

Your bankruptcy lawyer will offer you a compassionate, confidential consultation during which he or she will analyze your individual financial circumstances in order to determine the best course of action for you. It may be that bankruptcy is not the best choice in your situation, and your attorney will be able to advise you about alternatives. If you do decide together to pursue bankruptcy proceedings, however, your attorney will walk you through every step of the process.

The first step to take is to determine whether or not you will be eligible to file Chapter 7 bankruptcy, or Chapter 13. Chapter 7 is also known as 'liquidation bankruptcy,' and is what people typically think of when bankruptcy comes to mind. Recent changes to the Bankruptcy Code, however, have made this type more difficult to qualify for. In order to determine your eligibility, you will take a means test, which will evaluate your income, your assets and your expenditures.

If your income falls under the Census Bureau's established median income level for families in Pennsylvania, you will automatically be eligible for Chapter 7 bankruptcy. If you make more than the median income for families in Pennsylvania, you will proceed to the next level of the means test, at which point the court will consider your income over the past six months, your mortgage and car payments, any back taxes or child support due, and school expenses up to $1,650 per year. If, after deducting these amounts and the living expenses provided in the Internal Revenue Service's national collection standards, you are still found eligible to pay approximately $100/month to unsecured creditors over a period of five years, you will not be able to qualify for a Chapter 7 bankruptcy. At this point, you will be forced to file a Chapter 13 bankruptcy instead.

Chapter 13 bankruptcy is also known as the wage earner's plan and allows the debtor to maintain some assets, such as a home and car, and to honor their debts by repaying all or a portion of them. Under Chapter 13, you will reorganize your debts in order to give you time to pay them, and you will formulate a repayment plan which will take between three to five years.

In either case, a court-appointed trustee will take charge of your case. If you have filed a Chapter 7 bankruptcy, your trustee will sell your remaining non-exempt assets and distribute the profits to your creditors. If you have filed Chapter 13 bankruptcy, your trustee will receive your monthly payments and will then disburse those payments to your creditors.

You will not be able to file Chapter 7 bankruptcy until six years after your first filing; a Chapter 13 filing can be repeated at any time. If you feel that bankruptcy might be a viable option for your personal financial situation, contact a Pennsylvania bankruptcy attorney lawyer today.