Bankruptcy FAQs

What is bankruptcy?
Bankruptcy is a process that allows people to eliminate their unsecured debts or to repay them (either partially or fully) in a controlled, pre-planned manner, over an extended period of time.

Are there different types of bankruptcy?
Yes. Individuals can file either Chapter 7 bankruptcy or Chapter 13 bankruptcy. A Chapter 7 bankruptcy is filed in an effort to eliminate unsecured debts such as credit cards and personal loans. A Chapter 13 bankruptcy is filed in an effort to save ones home by making a payment plan that would allow the consumer to repay his or her mortgage arrearage debts over a plan term of 36 or 60 months.

Is bankruptcy the best way to deal with out-of-control debt?
Usually however depending on the amount and types of debt and the type of assets you have, you may have to consider debt relief options as an alternative.

Can all debts be eliminated through bankruptcy?
No. Some debts (for example child support and alimony obligations, taxes owed to government authorities such as the IRS and government guaranteed student loans (with some exceptions) cannot be discharged through bankruptcy.

Does my income affect the type of bankruptcy I can pursue?
Yes; if your income is above a certain level, you may not be allowed to file for Chapter 7 bankruptcy. If your income is too low, you may not be able to create a viable repayment plan for Chapter 13 bankruptcy.

Can an individual file for bankruptcy more than once?
Yes; however, you will not be allowed to file within eight years from the discharge date of a prior filing (the number depends on the type of bankruptcy that you previously filed).

What happens if I don't list all of my debts on a bankruptcy petition?
It is important that all creditors be named on any bankruptcy filing. Depending on the jurisdiction, unlisted debts may not be discharged, even if the bankruptcy was effective--in other words, you would still owe those amounts.

Will bankruptcy show up on my credit reports?
Yes, for 7 or 10 years, depending on the type of bankruptcy involved however the important note is that credit scores will be increased due to the discharge of the debt associated with the bankruptcy filing.

Can one spouse file for bankruptcy without the other?
Yes, In fact this would the preferable route when there is debt in the name of one spouse (the filing spouse) as opposed to joint debt. Furthermore, by electing Pennsylvania exemptions as opposed to Federal exemptions would allow the single filing spouse to avoid from consideration any joint equity in the marital home owned by both spouses.

If you are considering filing for bankruptcy in Pennsylvania or New Jersey, or would like to discuss the interaction between bankruptcy and divorce or bankruptcy and estate planning in those states, please contact the Law Firm of John M. Kenney, P.C.. For more than 27 years, Bucks County Fairless Hills attorney John M. Kenney has served clients throughout Bucks County, Montgomery County, Philadelphia County, Pennsylvania as well as Mercer County, New Jersey.

For a free consultation, call (215) 547-3031, email jmk@jkenneylaw.com, or fill out and submit our "Contact Us" form.