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Chapter 7 Bankruptcy Attorney in Philadelphia PA

How Chapter 7 Bankruptcy Works

Chapter 7 is the quickest form of bankruptcy out there. The time involved from the filing of the Chapter 7 bankruptcy until the discharge of your debt by the Court is usually three to four months. It is also known as filing straight bankruptcy.

You are unable to pay all of your debts and are asking the Court to give you a completely fresh start. You make the minimum payment every month you are asking the Court to clear all or most of your unsecured debt and in some cases to wipe secured debt as well.

Once you receive the discharge, your old debt should be cleared and you should be on your way to a fresh start.

Chapter 7 Bankruptcy Filing Process in PA

The bankruptcy filing process begins with a person bringing in their:

  1. Proof of income. The Court also wants to know the spouse’s income even if he or she is not filing, unless the spouse is separated in which case the spouse’s income is usually not needed at all.
  2. Their last tax return if you file a tax return and
  3. A list of your bills or the bills themselves

We will ask you a number of questions and then we can advise you of any other documents needed, if Chapter 7 bankruptcy will help to make your life better, any fees and court costs, and what will happen in your specific case.

Once a Chapter 7 bankruptcy case is filed the Courts will schedule what is known as a Meeting of Creditors. This consists of a video hearing usually held between 30 to 45 days after the filing of the Chapter 7 petition. At the video hearing, the trustee will ask you to confirm the information in your petition is true and may ask other questions. The hearing usually takes about 10 – 15 minutes. 

After the hearing, the trustee will normally close the hearing and recommend a discharge of the bills. Usually no creditors show up at the hearing. If a creditor feels there is fraud involved or a person is hiding assets, the creditor is given a period of time to file an objection to the discharge. This is a rare occurrence and once the time period for filing an objection to the discharge has passed, the Judge typically enters the discharge. The usual time period from the filing of the bankruptcy case to the conclusion and discharge is about 3 – 4 months.

Debts Generally Discharged Through Chapter 7 Bankruptcy

A Chapter 7 case allows the Debtor to discharge (or wipe away) most unsecured debts, such as credit card bills, lines of credit, personal loans, payday loans, medical expenses, utility bills, auto deficiencies, (balances owed after repossession of a vehicle), certain tax debts, some parking and red light camera violations and auto accident judgments which often result in suspensions of a driver’s license. Social Security Overpayments and Unemployment overpayments are also generally dischargeable unless you have committed fraud. By obtaining a discharge of the debts, creditors are not allowed to collect on these debts.

Chapter 7 bankruptcy provides an approach for both individuals and married couples to discharge some debts, bills, and financial obligations. If Chapter 7 is appropriate for you to file, you are generally able to keep most of, if not all of your property through:

After filing for bankruptcy, there is a meeting of creditors, usually held via Zoom with no in-person appearance, during which a trustee will review the petition. Most people who file a Chapter 7 case do not lose any property at all, and the reports show that in over 98% of Chapter 7 cases, all property is exempt and kept by you. We can tell you in advance if there are any issues with your case.

Debts That Won't Get Discharged Through Chapter 7

Examples of debts that cannot be discharged through Chapter 7 include the following:

In addition, if you choose to file a Chapter 7 bankruptcy, you will still need to pay your secured debts, such as a mortgage or car loan, if you wish to keep the house or the car. However, if you do not wish to keep the car, you would simply stop paying for the car and let the finance company get the car back by surrendering it. The bankruptcy discharge would wipe out any secured debt where you give up the collateral for the loan. This would also include a house that you may not wish to keep. For example, the house is not in good condition, the neighborhood has changed and gotten worse, and you cannot sell the house and get a profit on the sale. In such a case, you may be able to walk away from the house without owning a penny.

If it appears that any property or assets you have might be in jeopardy, then you can protect your property by filing for bankruptcy under Chapter 13 and making monthly payments. In many cases, Chapter 13 turns out to be an excellent option that provides great savings to the filer.

Also, If you are behind on mortgage payments or a car loan and you wish to keep the house or the car, a Chapter 7 case probably will not be the right choice for you. While Chapter 7 can discharge the debt, it does not take away the right of the mortgage company or the auto lender to proceed with moving to take away your property if you are in arrears on the payments and cannot immediately get caught up. In such a case, a Chapter 13 bankruptcy case may provide just the right solution.

Qualifying for Chapter 7 Bankruptcy

Call to get the help of a Chapter 7 Philadelphia bankruptcy attorney by contacting The Law Offices of David M. Offen to get all of your questions There are several issues regarding the qualification for a Chapter 7 bankruptcy.

  1. The Courts will look at your income and expenses. If you have a substantial amount of money left over and are able to afford to pay your unsecured bills, the Court may feel that you do not need to be in a Chapter 7 proceeding.
  2. If you have a number of assets left over after using your legal exemptions such as a car or a house on which you don’t owe any money, or in which you have what the Court considers a substantial amount of equity, then you may not want to file under Chapter 7, but would wither prefer to file under Chapter 13 or not file at all.
  3. The final key issue is do you pass the means test. The means test is a mathematical test created by Congress which is used to provide a number that the Court estimates you can afford to pay. This test is not absolute but is used as a guide.

Call to get the help of a Chapter 7 Philadelphia bankruptcy attorney by contacting The Law Offices of David M. Offen to get all of your questions answered and find out what is the best approach in your circumstances.

Should file Chapter 7 or Chapter 13 bankruptcy, or no bankruptcy at all. How can all of your property be protected and at the same time all of your unsecured bills be reduced or wiped out? What is the best move you can make right now? For your free debt reduction and elimination consultation, call today at 215-625-9600. Find out what the banks and creditors don’t want you to know, what you should and should not do, and how you can rebuild your credit.

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