When it comes to such a point, filing for bankruptcy may be your last resort. Whereas there’s a negative perception about bankruptcy, it does not mean that you are a failure or incapable of handling your finances. On the other hand, it is an excellent way of taking back control. It is for this purpose that over 20,000 Pennsylvania residents file for bankruptcy each year.
Some of the benefits that you will enjoy after filing for bankruptcy include:
- Debt relief
- Foreclosure prevention
- Protection from debt collectors
However, filing for bankruptcy is a matter that should be taken seriously as it will reflect on your credit report. As such, this should only be a course of action when you have debts that you cannot service, and there’s a significant risk of losing your assets.
The process is governed by federal law under the US Bankruptcy Code. To ensure that you receive the reprieve you seek, your case should be filed correctly. This is why it is crucial to hire an experienced Pennsylvania bankruptcy attorney.
Are you overwhelmed with debts and living with the constant fear of losing your hard-earned property? Filing for bankruptcy will help. Read on to learn more about the bankruptcy process in Pennsylvania.
What Does Bankruptcy Accomplish?
In Pennsylvania, you can file for bankruptcy either under Chapter 7 Bankruptcy or under Chapter 13 Bankruptcy. Chapter 7 encompasses liquidation, ordinary bankruptcy, and straight bankruptcy. On the other hand, chapter 13 focuses on reorganization and the wage earner’s plan.
Chapter 13 has more technicalities and a greater need for skilled representation. Nonetheless, you should never file any bankruptcy claim without the assistance of a legal representative. If you are filing for a corporation, you’ll do so under Chapter 11.
Bankruptcy law offers consumers two key benefits that your creditors would want you to know.
- The automatic stay- Immediately after filing for bankruptcy, the automatic stay will go into effect. This is a legal injunction that prevents creditors from filing lawsuits against you, seizing your property, and taking other collection steps. They are also not allowed to contact you directly but only through an attorney.
- Debt relief- Under chapter 7 bankruptcy, all debts will be wiped off completely. With chapter 13, debts are reconsolidated under a manageable payment method.
Requirements for Filing for Bankruptcy in Pennsylvania
Just because some debts are pressing you does not mean that you can file for bankruptcy. To prevent misuse of this tool, there are certain requirements that you must meet to qualify.
1. Residency Requirements
In order to file for bankruptcy in Pennsylvania, you must have been a resident for at least 91 of the 180 days preceding the date of filing. Bankruptcy courts only have jurisdiction in specific geographical areas. If you live in Chester, Bucks, Berks, Delaware, Lehigh, Philadelphia, Northampton, or Montgomery counties, you should file at the United States Bankruptcy Court for the Eastern District of Pennsylvania.
The Philadelphia division serves the residents of Bucks, Delaware, Chester, Montgomery, Lancaster, and Philadelphia. While the Reading Division serves residents from the areas of Lehigh, Berks, and Northampton.
2. Waiting Period Requirements
With the first bankruptcy filing, there’s no waiting period imposed. However, for subsequent ones, there will be a waiting period of at least two years before you can receive your second discharge. The waiting period imposed will depend on the unique circumstances of your case.
3. Credit Counselling Requirements
Filing for bankruptcy is indicative of financial struggles. To help you navigate out of bankruptcy successfully and help prevent future occurrences, Federal bankruptcy laws dictate that you must undergo pre-bankruptcy credit counseling before filing. The credit counseling course will attract a small fee and should be done by a counselor approved by the Department of Justice.
4. Financial Requirements
The amount of debt you have will determine under which chapter you can file for bankruptcy. To file for Chapter 13 bankruptcy in Pennsylvania, secured debts should not exceed $1,184,200 and unsecured debts under $394,725. Also, if you earn a substantial amount, you may be ineligible to file for Chapter 7.
Filing Bankruptcy in Pennsylvania
The process of filing for bankruptcy has several steps that can be a bit intimidating. This is why it is essential to have a bankruptcy attorney.
1. Collection of Pennsylvania Bankruptcy Documents
As part of our free intake consultation, our intake team will be able to work with you to identify the types of financial documents to collect for your attorney. These include:
- Paycheck stubs or alternative proof of income for the last six months
- Two most recent statements from all your bank and investment accounts
- Last two income tax returns
- Property deeds along with mortgage statements and proof of homeowner’s insurance
- Vehicle titles with proof of insurance
- Copies of all your bills and creditor’s information
It is vital to list all your creditors and collection agencies. To be sure, get a credit report which will provide all your debt information.
2. Go for Credit Counseling
Under the Bankruptcy Code, credit counseling is mandatory before filing for bankruptcy. For this, many providers offer services via phone or online. Our team will share a few options that will be the best fit for your situation based on your needs and availability to attend.
3. Fill in the Bankruptcy Forms
With all the documents in place and having completed pre-bankruptcy counseling, the only step remaining is filling out the bankruptcy forms. The attorney will select the correct documents and complete the paperwork required based on information provided by the client during their initial intake and supported by the documents provided. Most of the forms are federal forms but be sure to check which local forms are necessary.
4. Know Your Billing Fee
Though it’s possible to have your court filing fee waived, it may not be the case for you. If so, make plans for how you will pay the fee before heading to court. If you are not in a position to raise the full amount, ask the court to pay in installments.
5. Print Your Bankruptcy Forms
Once you have addressed the filing fee and filled out your forms, proceed to print them out to initiate your file for bankruptcy in Pennsylvania. Make sure to print on one-sided pages as double-sided ones will not be accepted in court. Make additional copies for your records and use them at 341 meetings.
6. Proceed to Court
When filing for bankruptcy “pro se,” you’ll need to do so in person at the court. However, due to COVID regulations, you may want to check if there’s an alternative method. Once your documents are time-stamped as “filed,” automatic stay will be in effect.
7. Mail the Documents to Your Trustee
Immediately after filing your paperwork with the Pennsylvania Bankruptcy Court or thereafter, you’ll be assigned a court-appointed trustee. Gather the documents, along with the ones you used to fill out the forms before your 341 meeting.
8. Take the Second Bankruptcy Course
As required by bankruptcy law, you will have to take a second credit counseling course. After filing your case, you will have a specified duration within which to do the course. Ideally, you should take it soon after filing and, if possible, before your scheduled 341 meeting. Make sure that the credit counseling agency you take the course through is approved to offer it for Pennsylvania bankruptcy cases.
After successful completion, you will receive a certificate that needs to be officially processed by the court clerk.
Consulting a Bankruptcy Attorney
Considering you are filing for bankruptcy, you may be pressed for cash, consulting a bankruptcy attorney will help you get the best possible results, thus lightening your load. However, to get the best results, you are better off hiring a bankruptcy attorney. Bankruptcy regulations are strict, and there are many technical complexities involved with filing. An attorney can significantly make the process easier as they are well versed with the regulations and have the experience to foresee and handle any legal complexities. Other ways in which a legal representative will assist you with your case include:
- Helping you decide whether to file Chapter 7 bankruptcy or Chapter 13 bankruptcy.
- They’ll negotiate with creditors on your behalf.
- Assist you in preparing for court hearings and meetings.
- They’ll file the motions and other documents on your behalf.
- Intervention in case creditors are harassing you.
- Help you determine whether federal bankruptcy exemptions or Pennsylvania bankruptcy exemptions will protect you more.
Getting the Best Out of the Situation
Without a doubt, the need to file for bankruptcy to protect your assets can be stressful. How you run the process can have a significant bearing on the benefits you access and your ability to bounce back. This is why it is crucial to have an experienced bankruptcy attorney by your side.
Bankruptcy Done Right is a law firm dedicated to helping people handle the complex matters of filing for bankruptcy and getting them the best possible results. Call us for free today to help you make the right decisions to protect your assets.
