Pennsylvania Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy your debts are discharged (wiped out), and you get a “Fresh Start”. If you have a lot of credit card debt and are unable to make the payments, filing for a Chapter 7 Bankruptcy could be the best solution in resolving your debt.

In most Chapter 7 cases, the debtor has large credit card debt and other unsecured bills and very few assets. In the vast majority of Chapter 7 bankruptcy cases, a debtor is able to completely eliminate all of these debts.

Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged.

Most debtors without assets are able to “exempt” (keep) all or most of their property, including their houses and cars. However, surrendering (giving up) certain property that is “underwater” (the debtor owes more than the property is worth) may be a better option for some debtors.

You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts. To do so, you often have to sign a voluntary “Reaffirmation Agreement.” If you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt (or wipe-out) that debt again for eight years. You will still owe that debt and you must continue to pay it just as you were obligated to continue to pay it before you filed bankruptcy. In order to reaffirm the debt, you must also bring it current. In other words, if you are three or four months behind, then you must pay the back payments which are due in order to reaffirm it. You can selectively reaffirm your debts – you can state that you wish to keep the house and the furniture, but that you want the car and the jewelry to go back to the respective Creditors.

Making decisions about whether or not to file bankruptcy can be difficult, and the Law Office of Norman J. Barilla can assist you with understanding your options, the implications of certain choices, and assist you in filing for bankruptcy.

Frequently Asked Questions

What is Bankruptcy?

Bankruptcy is a legal proceeding in which an individual who cannot pay his or her bills can get a fresh financial start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

What Can Bankruptcy Do for Me?

Bankruptcy may make it possible for you to:

What Doesn’t Bankruptcy Do?

Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:

Is Pennsylvania Chapter 7 (Straight Bankruptcy) Bankruptcy Right for Me?

In a bankruptcy case under chapter 7, you file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for you giving up property, except for “exempt” property which the law allows you to keep. In most cases, all of your property will be exempt, likely including your house and car. But property which is not exempt is sold, with the money distributed to creditors. However, if you are behind on the payments on a mortgage or car loan and want to keep that property, a chapter 7 case may not be the right choice for you. That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.

Contact the Law Office of Norman J. Barilla today to discuss whether bankruptcy is the right choice to resolve your debts.