Bankruptcy was an accepted concept long before Newman Williams, P.C., opened its doors in 1923. It was deemed wise to provide a safety vault for families mired in unpayable debt, to allow them back into the economy.
What is Chapter 7 bankruptcy and is it right for uou?
Today, there are two common forms of bankruptcy relief, Chapter 7 and Chapter 13. Chapter 13 is sometimes called wage-earner bankruptcy. It seeks to stretch out payments so that they are achievable. Chapter 7 is often referred to as liquidation bankruptcy. It is for people who are simply unable to pay their debt, no matter how the payments might be rescheduled.
Chapter 7 can be appealing for people with significant unsecured debts, such as medical or credit card debt. Very often, people seeking Chapter 7 protection have experienced downturns due to the economy, health problems or divorce.
Those who meet qualifications for Chapter 7 can often discharge these debts without owing any more to creditors. People can typically complete the process within six months.
Will you lose your property in a Chapter 7 bankruptcy?
You may worry about having to liquidate certain assets when filing Chapter 7 bankruptcy. However, there are ways to protect your assets through certain exemptions. Here is how it can work:
- Exemptions: In Pennsylvania, you have the option to choose between state and federal bankruptcy exemptions. These exemptions can determine which of your assets you can shield from creditors. Our lawyers can help you decide which set of exemptions offers the most protection for your specific situation.
- Keeping your home: While Pennsylvania doesn’t have a state homestead exemption, you can use federal homestead exemptions to protect a portion of your home’s equity. Additionally, if you own your home as “tenants by the entirety” with your spouse, it may have protections against individual creditors.
- Protecting your vehicle: You can use both state and federal exemptions to protect your vehicle equity. If your vehicle equity is covered by an exemption, you can typically keep it.
- Retirement accounts: Retirement accounts such as 401(k)s and IRAs can typically receive protections under both state and federal exemptions.
- Nonexempt property: If you have property that exceeds the exemption limits, that may be risky. However, many people find that their essential assets are protected.
If you want to know which exemption options may be effective for you, work with one of our seasoned bankruptcy attorneys today. They can provide you with the knowledge and reassurance you need to navigate the process effectively.
How can Chapter 7 bankruptcy help you?
Filing for Chapter 7 bankruptcy can provide several tangible benefits that can offer relief and peace of mind for individuals facing financial difficulties. Here’s how it can help:
- Immediate relief with an automatic stay: With Chapter 7 bankruptcy, an automatic stay can go into effect immediately. An automatic stay can put a stop to all collection and garnishment efforts so you can focus on getting your finances in order.
- Stop creditor harassment: If you are dealing with financial hardship, chances are you are facing harassing letters and phone calls. Chapter 7 bankruptcy can stop creditors from harassing you for a certain period through an automatic stay.
- Prevent wage garnishment and bank levies: Chapter 7 bankruptcy can also stop creditors from taking wages out of your paycheck or gaining control of your bank accounts. That way, you can utilize the money you have to provide for yourself while you reconfigure your financial picture.
- Peace of mind: Filing Chapter 7 bankruptcy can offer peace of mind. When you know that you have a path to financial recovery, you can pursue a fresh start without the overwhelming burden of unsecured debt.
If you have any additional questions about whether Chapter 7 bankruptcy is right for you, please do not hesitate to reach out.
Contact our office to discuss discharging your unpayable debt in a free consultation
Contact our office today to discuss your bankruptcy questions with a Stroudsburg, Pennsylvania, Chapter 7 bankruptcy attorney. We are available between 9 a.m. and 5 p.m. Monday through Friday and by appointment at other times.
You can reach our attorneys by phone at 570-559-5507 or via email to schedule a free initial consultation with a lawyer.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
