Chapter 7 Bankruptcy

If you are financially stressed by creditor harassment, exorbitant consumer debt you don’t think you can pay, and other obligations, filing for Chapter 7 bankruptcy in Bucks County can be a smart choice. Chapter 7 bankruptcies give debtors a fresh start. Experienced attorney John M. Kenney can help you make sure your bankruptcy petition complies with all rules so that you can start over financially with a clean slate.

Not everyone qualifies to file for Chapter 7 bankruptcy. You will need to receive credit counseling from an agency approved by the Bankruptcy Administrator in the six-month period before filing. You will also need to complete a means test. The means test examines whether your income is above or below the median income for a Pennsylvania household of the same size.

Currently, a single person household in Pennsylvania has a median income of $45,092, and a two-person household has a median income of $53,091. These figures change, so you should consult with an attorney or look up the median income to apply the correct figure. If your income is below the median income for the state, you qualify for Chapter 7. However, if your income is above the median income for the state, you will need to look at your basic monthly living expenses and whether you have enough income left over to repay any unsecured debts, such as your credit card and medical bills. The leftover amount is considered disposable income. If it exceeds a specific sum, you will not be able to file Chapter 7 but may still be eligible for Chapter 13.

When you file for Chapter 7 bankruptcy, all creditor activities are subject to an “automatic stay.” This means that creditors can no longer call you, mail you letters, harass you or file lawsuits to collect the debts. A home foreclosure sale can also be halted temporarily with the automatic stay. Lenders are not allowed to repossess your car or cut off your utilities for a certain period of time. Criminal cases and child support cases may continue to proceed, however. The court clerk mails notices to your creditors that you have filed for bankruptcy, and you and your attorney can also send letters to all creditors to make sure that they stop trying to collect their debts.

The goal of filing for Chapter 7 bankruptcy is to obtain a discharge of as much of your debt as possible. An experienced bankruptcy lawyer can make sure that you list all your debts on the bankruptcy paperwork so that your debts are discharged, which typically takes about four months. At this point, the bankruptcy may feel like it’s over. If there are lawsuits or assets still at issue, the case may continue beyond your discharge. You will have a duty to cooperate by providing requested documentation and sometimes testifying in pending litigation.

The major difference between Chapter 7 and Chapter 13 bankruptcy is that Chapter 13 requires you to repay your debts over three to five years. In Chapter 7 bankruptcy, some of your property may be taken and sold, but you can protect a certain amount of property through “exemptions.” Each state has its own bankruptcy exemptions, and there are also federal bankruptcy exemptions. In Pennsylvania, you can choose to use the Pennsylvania exemption system or the federal exemption system.

Bankruptcy is governed by federal laws, but there are specific Pennsylvania laws that will also apply to your case. Chapter 7 bankruptcy can be a good solution to significant consumer debt in Levittown, but you should discuss your specific situation with a lawyer before making a decision. Bucks County bankruptcy attorney John M. Kenney can evaluate your situation and give you a realistic idea of what filing for bankruptcy can do for you. For a free consultation about filing for bankruptcy, contact him by phone at (215) 547-3031, or by submitting an online inquiry. We serve clients in Bristol, Morrisville, Fairless Hills, Yardley, and Langhorne, as well as elsewhere in Pennsylvania.