Chapter 7 Bankruptcy
If your debts have accumulated beyond your means to repay them, the mounting financial pressures and creditor harassment can be extremely stressful. When you look at the money coming in and the amounts you owe to numerous parties, the situation may seem hopeless at times. Do not just stick your head in the sand. Please understand that there is relief. My office is in Norristown, Pennsylvania and I have helped hundreds of people in your position escape from debt and start over by filing Chapter 7 bankruptcy. I am an experienced bankruptcy attorney and routinely represent couples, families and individuals throughout Montgomery County, Pennsylvania.
Chapter 7 Bankruptcy Allows For a Fresh Start
Personal bankruptcy through Chapter 7 eliminates most unsecured debts:
- Credit card balances
- Charge accounts
- Most judgments
- Certain tax debt
- Gambling debt
- Medical bills
- Wage garnishment
You do not have to pay those creditors back and they must stop calling your home, your relatives and your work as soon as you file. Secured debts (a mortgage, a car loan), recent taxes, student loans and child support are not erased, but by wiping out your other debts you will again have money to meet those obligations.
Won't I Lose Everything?
Many people fear they will have to give up what they own by filing for bankruptcy. Most filers do not lose anything. Chapter 7 is also known as liquidation — a bankruptcy trustee liquidates your assets to repay creditors. However, most assets are protected by exemptions: you can keep your home and car as long as you continue payments, and retirement funds and most personal belongings are also exempt. As your bankruptcy lawyer I will explain which debts are dischargeable and which assets, if any, you would forfeit.
Will Bankruptcy Ruin My Credit?
Your credit rating is already low if you have high debt, late or missed payments, or judgments filed against you. You may initially have trouble getting credit or be charged higher rates. However, within a short time, you will qualify again for loans and credit cards at market or near-market rates. Bankruptcy is an opportunity to repair blemished credit.
Can Anybody File Chapter 7 Bankruptcy?
In 2005, Congress changed the consumer bankruptcy law to implement an income means test. If you earn more than the median household income for Pennsylvania, you may be required to file for Chapter 13 (reorganization of debts). The means test is complicated and you need an experienced Montgomery County PA Bankruptcy Attorney to help you pass. Fortunately, most people who qualified for Chapter 7 under the old law still qualify.