What Is Chapter 7 Bankruptcy?
Financial hardships can strike anyone, often without warning. If you are overwhelmed by debt and struggling to find a way forward, Chapter 7 bankruptcy may offer a solution. Sometimes referred to as “liquidation bankruptcy,” Chapter 7 is designed to give individuals a fresh financial start by wiping out many types of unsecured debt. Most individuals who file Chapter 7 Bankruptcy in Pennsylvania rarely lose any assets and nothing is liquidated.
If you’re considering bankruptcy in Harrisburg, it’s important to understand how Chapter 7 works — and to seek guidance from an experienced Harrisburg bankruptcy lawyer from our firm who can help you make the right decisions for your future.
Understanding Chapter 7 Bankruptcy
Chapter 7 bankruptcy is one of the most common forms of bankruptcy filed in the United States. It is intended for individuals who cannot realistically repay their debts. Through Chapter 7, you may be able to eliminate most or all of your unsecured debts, such as:
- Credit card balances
- Medical bills
- Personal loans
- Utility bills
- Certain types of civil judgments
In exchange, a court-appointed trustee may liquidate (sell) certain non-exempt assets to repay a portion of what you owe. However, most people who file for Chapter 7 in PA are able to keep most — if not all — of their property because of exemptions under federal and Pennsylvania law.
Who Qualifies for Chapter 7?
Not everyone automatically qualifies for Chapter 7 bankruptcy. You must pass the “means test,” which compares your income to the median income for a household of your size in Pennsylvania. If your income is below the median, you typically qualify. If it’s above the median, you may still be eligible for Chapter 7, depending on your expenses and specific circumstances.
A knowledgeable Harrisburg bankruptcy lawyer can help you determine whether Chapter 7 is the right option for you and guide you through the means test analysis.
The Chapter 7 Process
Filing for Chapter 7 involves several essential steps:
- Consultation and preparation: Meet with a qualified bankruptcy attorney to review your financial situation and complete the necessary paperwork.
- Filing your petition: Your attorney will file your bankruptcy petition with the court, and an automatic stay will go into effect, halting all collection efforts, lawsuits, and wage garnishments.
- Meeting of creditors: About a month after filing, you’ll attend a brief meeting (called a 341 meeting) where the trustee and any creditors can ask questions about your finances.
- Discharge of debts: If no major issues arise, you may receive a discharge of your eligible debts within about three to four months after filing.
Chapter 7 can offer a true financial reset, but it is not without consequences, including an impact on your credit score. Having the skilled legal guidance of our Harrisburg bankruptcy attorneys throughout the process is essential.
Contact a Harrisburg Bankruptcy Lawyer Today
If you are drowning in debt and unsure where to turn, Chapter 7 bankruptcy could provide the relief you need to start fresh. But navigating the bankruptcy process alone can be overwhelming and risky.
Call Cunningham, Chernicoff & Warshawsky today at 717-260-3527 or contact us online to schedule a confidential consultation with a knowledgeable Harrisburg bankruptcy attorney. Let us help you understand your options, protect your rights, and move toward a brighter financial future.