Filing bankruptcy can help you eliminate debt and give you a new start, without piles of unsecured debt taking all of your monthly paychecks. It can also give you time to repay your creditors without being hassled by collection agencies and without living under the threat of foreclosure or repossessions. However, student loans can be discharged in a bankruptcy, but it is very difficult. They can, however, be included in a repayment plan.
Types Of Personal Bankruptcy
There are two primary types of personal bankruptcy in Pennsylvania. In Chapter 7 bankruptcy, your assets are liquidated to pay your secured creditors with the exception of your primary residence, one car and a reasonable amount of personal possessions. Most of your unsecured debts, such as credit card balances, medical and dental bills, payday loans and repossessions, are discharged. That means that you no longer have to pay them. There are some exceptions, however. Student loans and taxes are two unsecured debts that in most cases still have to be repaid, even after you file for Chapter 7 bankruptcy.
Chapter 13 personal bankruptcy is a repayment plan. This is a good option for individuals who have fallen seriously behind on bills due to a short-term problem, such as a health issue or being out of work temporarily. Under Chapter 13 bankruptcy, you keep all of your assets and file a repayment plan with the bankruptcy court. Plans must be for 60 months or less. After your plan is accepted, you send a monthly payment to the court to go towards paying your past due bills in addition to paying your current bills. With this type of bankruptcy, debt laws allow you to get back on track without having to worry about foreclosures, repossessions or other collection action.
Why You Need A Bankruptcy Attorney
Pennsylvania’s bankruptcy laws are complicated as is the paperwork necessary to file these actions with the court. Although individuals are permitted to file without an attorney, you put yourself at a disadvantage and risk having your case dismissed. In addition, hiring a bankruptcy attorney can save you the hours of research and paperwork necessary to complete your filing. He or she can also help you determine which type of bankruptcy is best suited to your situation.
If you’re considering filing bankruptcy in eastern Pennsylvania, we at Jeanne Marie Cella, Esq are able to help you. Our firm has more than 30 years of bankruptcy law experience. We understand that filing bankruptcy, especially with student loans involved, can be stressful. We’ll help you navigate the laws and court requirements, so you can get on with your life.