Can Anyone Apply for Bankruptcy?
If you are dealing with medical bills or credit card debt, it may feel like there is no way to get out from underneath it. Many people assume that if you file for bankruptcy, you will need to give up your house or car, but that is rarely the case.
Having someone who can explain the law to you will help streamline the process of filing for bankruptcy. While it may be possible to file for bankruptcy without the assistance of an attorney, it is rarely a good idea to do so. Our Harrisburg debt relief lawyers offer different types of bankruptcy and we handle the process on your behalf.
What is Bankruptcy?
Bankruptcy offers individuals a way to mitigate or eliminate debt. Generally, individuals have the option of filing for either Chapter 7 or Chapter 13 bankruptcy. Unfortunately, some debts cannot be erased by filing for bankruptcy. This includes student loan debt, taxes owed to the state or federal government, alimony or spousal support, and child support.
If, after filing for bankruptcy, you are still overwhelmed by the balances on these nondischargeable debts, a Harrisburg debt relief lawyer can help you arrange a payment plan with creditors.
Chapter 7 versus Chapter 13 Bankruptcy
Chapter 7 bankruptcy is coined “straight bankruptcy.” The debtor will file a petition with the court asking for all debts to be discharged. Chapter 7 bankruptcy is suggested for anyone who is interested in erasing their debt quickly and selling their assets to pay off creditors. In a Chapter 7 filing, you are “wiping the slate clean,” liquidating nonexempt property. In Pennsylvania, almost all individuals who file chapter 7 can excempt most, if not all, assets. These individuals almost always can keep their house and cars.
In contrast, chapter 13 bankruptcy is designed to help an individual pay off their debts. Known as a wage earner’s plan, it gives you more time to pay off past-due debts. Typically, a person is given three to five years to pay off bills, and any outstanding debts at that time may be discharged (depending on the type of debt). Chapter 13 bankruptcy may be right for you if you earn a regular income and have more assets than can be exempted.
What Property Am I Allowed to Keep?
If you are filing for bankruptcy in Pennsylvania, you have the choice of choosing between state or federal exemptions. The federal exemptions for a single filer are as follows:
- $27,900 in home equity (The current value of your house minus any liens or mortgages)
- $4,450 in vehicle equity
- $700 per item in household goods, up to $14,875
- $2,800 in tools of your trade and professional books
- $1,875 in jewelry
- Wildcard exemption of $1,475 (can be applied to any property you own)
- Up to $13,950 of any unused exemption in your home
If you are filing as a married couple, the amount for each exemption will be doubled.
Benefits of Hiring a Harrisburg Debt Relief Lawyer
If you are considering bankruptcy, it is important that you speak with an attorney to determine if it is the best course of action in your situation. A Harrisburg debt relief lawyer can review your finances, discuss your options, and help you file the appropriate court paperwork to initiate proceedings. If most of your debt is nondischargeable or collateral property, we may suggest other alternatives to clean up your finances.
Speak with a Harrisburg Debt Relief Lawyer Today
If you feel buried by debt, now is the time to speak with a Harrisburg debt relief lawyer. For over 45 years, the attorneys at Cunningham, Chernicoff & Warshawsky, P.C., have been helping clients throughout central Pennsylvania and Harrisburg take control of their finances. To schedule your consultation to learn more, contact us online or by phone today.