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bankruptcy can help

Overview

Bankruptcy for Small Businesses

Bankruptcy for Individuals

Bankruptcy can be a good solution for people with problems with creditors and debt. It can provide you with a fresh start and keep you from losing your home and possessions. It can prevent harassment by debt collectors, sheriff sales, foreclosures, repossessions, garnishments and other efforts to collect debts. It can give you a chance to rebuild your credit. In Pennsylvania, individuals that file can keep their home, vehicles, and possessions.

Bankruptcy for Individuals

Bankruptcy for Small Businesses

Bankruptcy for Individuals

There are principally two types of Bankruptcy available to Pennsylvania residents: Chapter 7 and Chapter 13. The knowledgeable advice I can give you in choosing between the two is key to your future success.

Chapter 7 Bankruptcy is the most commonly known and most often used. It allows you to wipe out your debts completely.

Chapter 13 Bankruptcy is most often used by homeowners with appreciable equity in their home. It requires you to make regular payments through the Bankruptcy Court for a period of between 3 and 5 years. You would pay a portion of your debts to some of your creditors. After these payments of part of the debts are completed, the debts are extinguished.

The decision about which type of Bankruptcy is right for you is one of the first and most important steps when filing for Bankruptcy.

Bankruptcy for Small Businesses

When small businesses need to cease operations and resolve debt problems, bankruptcy can be a good option. Chapter 7 bankruptcy is available to business below a certain level. Chapter 13 bankruptcy is not open to use by businesses, but individuals that own small businesses can use Chapter 13.

Automobiles in bankruptcy

Chapter 7

In the Middle District of Pennsylvania, in a Chapter 7 bankruptcy, you are allowed to protect one car, up to an amount currently set at $4000.00. That does not include any loan that is attached to the car.

If you have a loan on the car, the lender may require you to sign a reaffirmation agreement. That is a pledge to continue to be bound by the terms of the loan. A decision on whether it is advisable to enter a reaffirmation should take into account advice from an attorney knowledgeable with the law applicable to the procedure. There are other options, including getting a different car.

If you have more than one car, an attorney familiar with the Bankruptcy Code and Practice can usually protect them all. It is generally not a good solution to make a sale or gift of a car within 2 years of bankruptcy.

A repossession frequently results in a balance remaining. That often leads to a lawsuit. A Ch. 7 bankruptcy eliminates the balance and any possibility of a suit.

Chapter 13

In the Middle District of Pennsylvania, in a Chapter 13 bankruptcy , as in a Chapter 7, you are allowed to protect one car, up to an amount currently set at $4000.00. You also have the ability to cure any car loan arrears.

The biggest advantage of a Chapter 13 in relationship to cars, is the ability in some circumstances to lower the amount outstanding on the loan to the value of the car. If the car would sell for thousands of dollars less than the amount owed, the debt could be set to the current worth of the car, regardless of your original purchase price.

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