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5 Questions to ask if You’re Considering Bankruptcy

Dennis-Plank-Lancaster-County-Attorney-PA By Dennis Plank, Attorney

If you’ve been struggling with a mountain of debt, you may be considering bankruptcy as one way to remedy your financial challenges. Bankruptcy is a good solution for many people in Lancaster County, but it is not right for everyone. Each person’s issues and needs vary, so you may want to consult a bankruptcy attorney before making your final decision.

As you consider your financial options, there are some questions many clients ask. If you wonder if bankruptcy is right for you, take some time to consider these questions, and see if they apply to your situation.

Will I Have to Liquidate my Assets if I Declare Bankruptcy?

Every situation is different, but bankruptcies usually don’t require you to sell everything to pay off debts. Much depends on whether you will file Chapter 7 or Chapter 13 bankruptcies. Your income and personal situation will dictate whether you qualify for Chapter 7 or Chapter 13, but in both types of bankruptcy, certain classes of property are exempt. Contact the team at Going and Plank and we’ll explain how property is treated in bankruptcy, and give you all the facts before you make a decision.

Is it Too Late to File Bankruptcy?

People often wait to file bankruptcy, hoping they may be able to convince creditors to hold off until they can repay their debt. That’s why some people are surprised by notices of foreclosure, repossession or lawsuits. Even if you’ve been served notice, it’s not too late to declare bankruptcy. In emergency situations, Going and Plank can often file an emergency bankruptcy, that allows us to stop actions like foreclosure, repossession, eviction, garnishment of wages, or lawsuits. An emergency bankruptcy stops legal actions against you and allows you time to get all the required filings and paperwork in order.

Emergency bankruptcies can help you if you are facing;

  • Foreclosure

  • Car repossessions

  • Eviction

  • Garnishment of wages

  • Lawsuits

Contact Going and Plank to discuss your options, and find out if an emergency bankruptcy makes sense for your situation.

Can Bankruptcy Help Eliminate Medical Bills?

Over 700,000 households declared bankruptcies last year, and many of those were due to the financial consequences of overwhelming medical expense and long-term illness. Having health insurance doesn’t mean you won’t be hit with huge medical bills. If a wage-earner is out of work or ill for long periods of time, financial hardships can be multiplied.

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That’s why, after a major or long-term illness, some people find they are facing insurmountable amounts of medical debt. While medical debt can be reduced or even eliminated in a Chapter 7 bankruptcy, in Chapter 13, it may be restructured into more manageable payments.

If you feel overwhelmed by medical debt, Chapter 7 or Chapter 13 may be a smart way to manage or eliminate debt.

Do I Have to Take a Credit Counseling Course?

The short answer is yes. No matter what type of bankruptcy is filed, Pennsylvania state law requires you to complete a credit counseling course with an approved agency. These mandatory courses are designed to help you evaluate and reformat your finances in ways that help you understand ways to pay down debt and avoid bankruptcies in the future. Going and Plank can connect you with a course that meets the state requirements.

What Happens After Bankruptcy?

Many clients wonder if they will be able to refinance mortgages or get a mortgage after declaring bankruptcy. Other are concerned about bankruptcy’s effect on their credit rating. The answers to those inquiries depend on the type of bankruptcy filed and if debts were eliminated or if a repayment plan was formed.

Bankruptcies do affect your ability to refinance a  mortgage or get approved for a new mortgage. As of this writing, you should be able to refinance or obtain a new mortgage two years after declaring bankruptcy, but underwriting requirements and legislation change frequently so this timeframe may change.

Your bankruptcy will be reported to a credit agency and can stay on your credit report for up to ten years. You will find that it will take time to regain a good credit score. But for many people bankruptcy provide a fresh start for their personal finances. By relieving some types of debt, eliminating some debt, and restructuring other types of debt, bankruptcy can give you the time and space you need to change your financial outlook.

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While it may seem like a bankruptcy lawyer is just another expense, an experienced bankruptcy lawyer is dedicated to helping you find the financial solutions that make the most sense for your situation. In addition to helping you through a complicated, paper-intense process, a bankruptcy attorney can steer you away from activities that may be seen as deceitful or fraudulent.

The team at Going and Plank can also help you determine which type of bankruptcy is right for you, help you protect your most important assets, and help you map out an improved financial future. Contact us today for a free consultation, and find out if bankruptcy makes sense for you

Chapter 7 Bankruptcy in Pennsylvania

Is This Debt Relief Option Right for You?

When your finances get out of control, you might resist filing for bankruptcy. After all, many people and businesses can find the financial relief they need by selling off assets, downsizing cars and homes, eliminating memberships, rethinking budgets, and reducing expenses dramatically enough to find the funds they need to work their way out of crippling debt.

However, others struggle to stay afloat when life events severely impact their finances. Perhaps you or someone in your family or business has experienced a serious drop in income, a job loss, got divorced, became ill, or passed away. Sometimes the economy, new regulations, changes in interest rates, or industry shifts also challenge your ability to make ends meet. When life events surprise you, it can become hard to pay leases, rents, mortgages, car payments, installment payments, major medical expenses, or other ongoing financial responsibilities.

Bankruptcy Offers a Chance to Reboot Your Finances.

While declaring bankruptcy feels like a failure to some people, legal and financial professionals know that can actually be a good way to rebuild your life. Numerous successful people have declared bankruptcy during their lives, including Abraham Lincoln, Walt Disney, Henry Ford, Milton Hershey, and H.J. Heinz.

What is Chapter 7 Bankruptcy?

Chapter 7 is the most common form of bankruptcy. Once a Chapter 7 bankruptcy is completed, the debtor is usually free of major debt, and is provided a fresh start with smaller, more manageable expenses. However, in exchange for the forgiveness of debts, a trustee will evaluate your assets and may require you to sell possessions to subsidize your debt. Depending on your situation, you may be able to keep your home and essential vehicles. If you have no possessions, your debt will be dissolved without selling off assets. Contact us to discuss your situation.

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How do I Know if I can Declare Chapter 7 Bankruptcy in Pennsylvania?

Before you file Chapter 7 bankruptcy in Pennsylvania, the Commonwealth mandates that you must meet these requirements.

1. You’re a Pennsylvania Resident

You must be a resident in Pennsylvania for at least 91 of the past 180 days preceding your bankruptcy filing date. Bankruptcy courts in Pennsylvania have jurisdictions. If you live in Lancaster, Berks, or Bucks counties, you’re in the jurisdiction of the United States Bankruptcy Court for the Eastern District of Pennsylvania. Residents of York, Dauphin, and Cumberland Counties fall under the jurisdiction of the Pennsylvania Middle District Bankruptcy Court.

2. You Meet Chapter 7 Income Requirements

To qualify for a bankruptcy discharge in Pennsylvania, you’ll have to submit a variety of forms and records, which will be compared to federal IRS and Social Security documents. Honestly is required, and dishonesty or hiding assets may result in criminal prosecution.

The income means test compares your adjusted monthly income to the median state income for a household of your size. If your income falls below the mean, or average, of a Pennsylvania household like yours, you may be a good candidate for Chapter 7. However, if your income ranks about the mean, or is higher than an average Pennsylvania household like yours, you may be asked to switch to a Chapter 13 bankruptcy filing. Chapter 13 bankruptcies focus on reorganization and repayment, not elimination, of debt. It’s important to remember that each case is different. A qualified legal expert on bankruptcy can help you walk you through this process, and identify exceptions in your favor when they exist.

3. You Have Fulfilled Credit Counseling Requirements

Anyone who wishes to file any type of bankruptcy in Pennsylvania must complete a designated pre-bankruptcy credit counseling course. In fact, this is a federal law. The course requirements and fees may vary slightly among bankruptcy court jurisdictions. A Going and Plank bankruptcy expert can talk you through this process.

Is Chapter 7 Right for You or Should You Pursue Other Options?

Once you decide to explore bankruptcy seriously, you should schedule a free consultation with a bankruptcy expert from Going and Plank. We’ll help you evaluate your current situation in many ways, including assessing your eligibility and identifying which debts can be discharged. Our team will help you check your credit report, identify all your debts, and gather the paperwork needed to file.

Before you commit to a Chapter 7 bankruptcy, we’ll help you explore all your options. Even if you qualify for Chapter 7 bankruptcy, other types of bankruptcies might be more helpful to you or your business. We’ll be understanding but honest, and our experienced legal team will help you explore all your choices.

Bankruptcies Will Change Your Life. Make Sure You Have Experienced Support.

Bankruptcies are complex and time-consuming. Mistakes in the process can significantly affect your ability to file bankruptcy and discharge debt. That’s why it’s so important to get the right legal help from Going and Plank. Like Abraham Lincoln and Milton Hershey, you can make bankruptcy the first step to launching the next phase of your life. Contact us today to schedule your free bankruptcy consultation.

The Law Offices of Going and Plank are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.

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