Philadelphia Bankruptcy: A Basic Overview
In additional to a variety of other causes, people may reach the point of bankruptcy if they develop careless spending habits, lose their source of income, or incur unaffordable medical expenses. When facing bankruptcy, the deciding factor in whether it will be a positive or negative experience depends on two things: he debtor\’s viewpoint on what the bankruptcy process will do for them and the quality of legal assistance received during your case.
The Perspective of Bankruptcy
Concerning the first factor, bankruptcy is equally viewed as something that destroys financial freedom and something that gradually restores it. Debtors who take the former perspective are likelier to avoid bankruptcy for as long as possible, often incurring more debt that further complicates their eventual bankruptcy. Concerning the second factor, debtors who retain quality legal counsel are likelier to experience bankruptcy as a process that, although stressful, is a step toward financial freedom, not the loss of it.
If your life is currently defined by un-payable debt, bankruptcy could partially or totally dissolve your debt. Two of the most common debts dissolved by bankruptcy are medical debt and credit debt. However, there are some debts that bankruptcy will not dissolve, such as: educational loans, mortgages, fees assessed by a court of law, alimony, child support, and civil debts owed as the result of a court decision. To learn more about your options under Pennsylvania bankruptcy laws, consult with a Philadelphia bankruptcy attorney.
Chapter 7 Bankruptcy Versus Chapter 13
There are two choices when claiming personal bankruptcy within the state of Pennsylvania, Chapter 7 and Chapter 13. To offer an overview of your options under Pennsylvania bankruptcy law, a basic explanation for each kind of bankruptcy is provided below. For additional information, speak with a Philadelphia bankruptcy attorney to discuss your options.
1. Claiming Chapter 7
The most well known type of bankruptcy, Chapter 7 involves the liquidation of the debtor\’s non-exempt assets to help pay for his or her outstanding debts. Once a court appointed trustee liquidates these assets, their proceeds are delegated to the debtor\’s creditors, after which the debts are dissolved. Chapter 7 is ideal for debtors that would not be able to pay on their debts over an extended period of time under new pay arrangements.
2. Chapter 13
Assuming that a debtor\’s income is sufficient enough to pay their debts over a period of time, debtors that earn more than their state\’s median household income are usually required to file for Chapter 13 bankruptcy. Chapter 13 is different from Chapter 7 because it doesn\’t involve the liquidation of assets. As an alternative, under a more reasonable pay agreement, the debtor is expected to repay their debts over a three to five year period.
Stop by the site of Reinherz & Reinherz where you can find out about selecting the right attorney for your Philadelphia bankruptcy case.. This article, Philadelphia Bankruptcy: A Basic Overview is available for free reprint.
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