Bucks COunty Chapter 13 Bankruptcy Attorney
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also called a "wage earner's" bankruptcy, is a common route many people take for reorganizing their debts. In Chapter 13, you develop a three-to-five-year debt repayment plan with your creditors and bankruptcy trustee. At the end of the repayment plan, you can release your dischargeable debt.
When you choose to file for Chapter 13 bankruptcy, our Warminster bankruptcy attorney at McCullough Eisenberg can help you collect and assess your financial documents, develop a reasonable plan for your particular situation, and guide you through the filing and court processes.
The Benefits of Chapter 13 Bankruptcy
If you file a Chapter 7 bankruptcy, your assets that are not protected by Pennsylvania or federal exemptions are liquidated and used to pay your creditors. Only then are your remaining debts discharged.
In a Chapter 13 bankruptcy plan, on the other hand, the trade-off is that your debts are not immediately discharged after the 341 meetings, but they are reorganized into a more manageable payment plan over the course of several years. The key advantage of a Chapter 13 bankruptcy is the fact that you are usually able to keep your non-exempt assets, such as home equity. This can save your home from foreclosure. Additionally, non-dischargeable debts such as alimony and child support can be arranged into more manageable payments.
Some debts discharged in Chapter 13, but not Chapter 7, include:
- Debts related to malicious property damage
- Debts related to non-dischargeable taxes
- Debts from an unsuccessful bankruptcy case
- Debts related to securities law violations
- Some debts related to property-settlement in divorce proceedings
- Stripped or crammed down liens
Additionally, if you have co-signers or other liable third parties on your personal debts, creditors are unable to seek payments from these co-debtors. You also would not have direct contact with your creditors during the process. Instead, a bankruptcy trustee would serve as an intermediary to communicate between you and your creditors and deliver payments.
In certain situations, such as when you have high equity in your secured assets, a Chapter 13 bankruptcy plan may be the best option to get you back on your feet. However, it is vital that you meet with an experienced and knowledgeable lawyer who has your best interests in mind and can help you discover which course of action is best for your specific case.
Choose McCullough Eisenberg for a Pennsylvania bankruptcy lawyer with more than 20 years of experience. We offer free case evaluations! Call us at 215-957-6411 today.
How to File for Chapter 13 in Pennsylvania
Whether you are in Bucks County, Montgomery County, or any of the surrounding areas, one of the main determinants for whether you can file Chapter 13 bankruptcy is your income. If your income is above the median income of a Pennsylvania resident, then Chapter 13 is most likely for you.
Once you and our bankruptcy lawyer have decided that Chapter 13 is your best option, you can continue the filing process.
Steps in the process typically involve:
- Gathering statements of income sources, taxes, significant financial transactions, assets, etc.
- Determining which property of yours is exempt
- Assessing the amounts of money owed to each creditor
- Creating “schedules” (petitions and specific forms) that state your current financial status
- Paying a court fee
- Proposing a repayment plan
- Attending a 341 hearing (the “Meeting of Creditors”)
If your plan repayment plan is confirmed at the 341 hearing, making payments in accordance with this plan over the following years will allow your remaining debts to be discharged.
Life After Chapter 13 bankruptcy
After completing your repayment plan, which lasts between three to five years, you may be able to receive a discharge from the bankruptcy court for some of the remaining debts.
How Long Does it Take to File Chapter 13 Bankruptcy?
The filing process can take 95 days from filing the petition to getting your repayment plan approved by the court, it is beneficial to have a bankruptcy attorney to help you properly fill out the application to avoid any delays. Bankruptcy won't actually be discharged until after 3 to 5 years once you have completed the repayment plan.
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