Fundamentals Of Bankruptcy
Bankruptcy is for those that cannot pay back creditors. It erases your debt and can silence all those pesky debt collector calls. It will also stop the bank from attempting to take and foreclose on your house and stop your vehicle from being reposed. This is a way for you to start over or as some would say, have a “fresh start.” Dischargeable debts are debts that can be eliminated and can include:
- Personal loans
- Past due rent and/or mortgages
- Collection agency debts
- Medical debt
- Old income tax debt
- Past due utilities
- Credit Card debt
- Business debt
Non-Dischargeable debts are debts that cannot be eliminated and can include:
- Government Fines
- Child Support
- Alimony
- Criminal Restitution
- Student Loans
- Recent Income Tax Debt
The person or entity filing for Bankruptcy is called a debtor. The person or entity you owe money to is called the creditor. A debtor can be any one of the following:
- Individual
- Married filing jointly with their spouse
- Married filing individually
- Owner of a business
To file for Bankruptcy, a debtor must be a resident for 91 out of 180 days preceding the filing date, complete a pre-bankruptcy credit counseling course, meet the financial requirements, and it cannot be any less than two years since your previous bankruptcy.
Bankruptcy is a decision that has long-term effects, so it is imperative that you go over all your options with an experienced Bankruptcy Lawyer.
Types Of Bankruptcy
There are several types of bankruptcies for you to choose from:
- Chapter 7
- Chapter 11
- Chapter 13
- Chapter 12
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Bankruptcy Filings
In a Chapter 7 bankruptcy, a petition is filed requesting the court to discharge or “wipe out” your debts in exchange for giving up property that is not exempt so that it can be liquidated and divided up to pay creditors. There are several different factors to qualify for Chapter 7. Your average annual income must be below Pennsylvania’s median income to be able to qualify for filing Chapter 7. The Means Test is a form that will calculate your average monthly and annual income and compares your income to others in Pennsylvania.
Filing Chapter 7 Bankruptcy
Filing Chapter 7 takes approximately six months to complete. Once you file with the courts you will then mail any requested financial documents to the Bankruptcy Trustee that was assigned by the Courts. Shortly after a Trustee is assigned, you then have a meeting of creditors where you will be interviewed by the Trustee to make sure all information you provided is accurate. Within 60 days of this meeting/interview, you are required to undergo pre-discharge debtor education. This program must be approved by the Trustee. Within two to three months from then, the Bankruptcy court will discharge your debts. If you need Bankruptcy assistance and are in York, PA, reach out to the Nager Law Group.Filing Chapter 11 Bankruptcy
Chapter 11 Bankruptcy is used primarily by businesses. This is also a repayment plan approved by the bankruptcy court. For Chapter 11, there is no Trustee unless the judge deems one necessary. If a Trustee is appointed by the judge, then they will take control of your business. If you need Bankruptcy assistance and are in York, PA, reach out to the Nager Law Group.Filing Chapter 12 Bankruptcy
Chapter 12 Bankruptcy is used by farmers and fishermen. Chapter 12 is a combination of Chapter 11 and Chapter 13 as it allows for repayment of debts through payment plans, however, is structured for a larger debt such as a business. If you need Bankruptcy assistance and are in York, PA, reach out to the Nager Law Group.
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Filing Chapter 13 Bankruptcy
Chapter 13 Bankruptcy takes quite a bit longer than Chapter 7. Chapter 13 is considered a “Reorganization” Bankruptcy. Chapter 13 allows you to keep your property that would otherwise be liquidated under Chapter 7. Chapter 13 is for people whose income is above Pennsylvania’s median income. Chapter 13 allows you to restructure your debts into affordable monthly payments. The same steps as Chapter 7 filing apply to Chapter 13 with a few small adjustments. You need to propose and get the court’s approval for a repayment plan that will last for three to five years. The payment plans will require monthly or biweekly payments to the Trustee who will take the funds and distribute them to your creditors. If you need Bankruptcy assistance and are in York, PA, reach out to the Nager Law Group.
Debt Relief Is Possible
The Nager Law Group is in York, PA, and has multiple highly qualified attorneys to assist you in your Bankruptcy needs. If you need a Chapter 7 Bankruptcy lawyer, Chapter 11 Bankruptcy attorney, Chapter 13 Bankruptcy lawyer, and Chapter 12 Bankruptcy lawyer, then look no further than the Nager Law Group.