Chapter 7 Bankruptcy Attorneys Poconos
Many people are discouraged from filing Chapter 7 because of some widely held fallacies.
If you are behind on your bills, you may have considered Chapter 7, but have stopped short of filing it because you have heard several things about it that may seem unappealing. However, since Chapter 7 can often mean the difference between financial ruin and getting back to financial solvency, it is important to be clear about the common misconceptions about this type of bankruptcy.
Filing it will cause me to lose my property
Once of the least savory things you may have heard about Chapter 7 is that your property will be sold to pay your debts during the process. However, this is only true part of the time. In reality, the liquidation sale that you may have heard about mainly occurs if you have nonexempt property-property that is not protected from the sale by federal or Pennsylvania law. Since most Chapter 7 filers do not have this type of asset, which includes se cond homes and luxury items, most do not lose any significant property to the sale during the Chapter 7 process.
I cannot qualify for Chapter 7
Due to the tightening of bankruptcy laws in the past, you may have heard or assumed that you do not qualify for Chapter 7’s protection. While it is true that you now must pass a means test in order to qualify, most filers have little problem passing it.
The test primarily involves an examination of your income. If your income falls below the median income for a household of your size in Pennsylvania, you are automatically eligible to file Chapter 7. Even if your income is above the median, you still may have a chance of qualifying. In such cases, the court considers your disposable income-what is left over after paying for your basic living expenses. If your disposable income is below a certain threshold, you qualify for Chapter 7. In cases where you do not qualify for Chapter 7, you may benefit from filing Chapter 13 instead.
I will ruin my credit by filing Chapter 7
Many people do not consider filing Chapter 7 or other types of bankruptcy because they think that their credit will be ruined, which will forever disqualify them from obtaining another loan or mortgage. In reality, this is not the case. Although your credit score will decrease once you file, the negative effect that bankruptcy has on it is only temporary. If you demonstrate financial responsibility following bankruptcy, by paying your financial obligations on time, your credit score can increase to creditworthy levels in as few as one or two years.
Since there are many rumors and half-truths out there that discourage many from getting the help they need, it is best to speak to an experienced attorney to get the truth about bankruptcy. The bankruptcy attorneys at Newman, Williams, Mishkin, Corveleyn, Wolfe & Fareri, P.C. can advise you further on how bankruptcy would affect your specific situation and recommend the best way to back to financial recovery for you.