An Overview of Philadelphia Bankruptcy

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Bankruptcy is claimed for a variety of reasons as people may: possess bad spending habits, experience a loss of income, or encounter costly medical expenses. Regardless of the reason for arriving at bankruptcy, whether your case will play out smoothly or not depends on these two dynamics: (1) the defaulter’s point of view on what bankruptcy achieves, and (2) the level of legal service received during the bankruptcy process.

How Bankruptcy is Perceived

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.

When your life is being dictated by debt you are unable to pay, claiming bankruptcy can dissolve some, if not all, of your debt. Bankruptcy can dissolve monetary obligations associated with credit and medical debt. Yet, it can’t dissolve debts involving: college and/or educational loans, mortgages, charges fined by the court, alimony, child support, and civil debts associated with court rulings. For additional information concerning Pennsylvania bankruptcy laws, consult with a Philadelphia bankruptcy attorney.

Bankruptcy: Chapter 7 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. Chapter 7 Bankruptcy

A chapter 7 bankruptcy is the most recognized form of bankruptcy and involves the process of liquidation where non-exempt assets are turned over for cash to help the debtor pay down what they owe. As a court selected financial manager assists in the liquidation of assets, they will pass on the proceeds to creditors, who will then dissolve the outstanding debts. This process is a practical solution to help those who would be unable to pay down their debts even if provided additional time and an updated payment plan.

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.

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Topics: Bankruptcy | Comments Off

Tags: attorneys, Bankruptcy, chapter 13, Chapter 13 Bankruptcy, chapter 7, chapter 7 bankruptcy, lawyers, Pennsylvania Bankruptcy, Philadelphia Bankruptcy, Philadelphia Bankruptcy Attorney, Philadelphia Bankruptcy Lawyer, Philadelphia Law, Philadelphia Legal Services

Article Citation
MLA Style Citation:
Smithson, Sherry "An Overview of Philadelphia Bankruptcy." An Overview of Philadelphia Bankruptcy. 4 Feb. 2011. uberarticles.com. 11 Apr 2012 <http://uberarticles.com/finance/bankruptcy/an-overview-of-philadelphia-bankruptcy/>.

APA Style Citation:
Smithson, S (2011, February 4). An Overview of Philadelphia Bankruptcy. Retrieved April 11, 2012, from http://uberarticles.com/finance/bankruptcy/an-overview-of-philadelphia-bankruptcy/

Chicago Style Citation:
Smithson, Sherry "An Overview of Philadelphia Bankruptcy" uberarticles.com. http://uberarticles.com/finance/bankruptcy/an-overview-of-philadelphia-bankruptcy/

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