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Warminster Chapter 13 Bankruptcy Attorneys

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also called a "wage earner's" bankruptcy, is a common route many people take for reorganizing their debts. In Chapter 13, you develop a three-to-five-year debt repayment plan with your creditors and bankruptcy trustee. At the end of the repayment plan, you can release your dischargable debt.

When you choose to file for Chapter 13, your attorney can help you take account of your financial information, such as tax and income statements, develop a reasonable plan for your particular situation, and guide you through the filing and court processes.

The Benefit of Chapter 13 Bankruptcy

If you file a Chapter 7 bankruptcy, your assets that are not protected by Pennsylvania or federal exemptions are liquidated and used to pay your creditors, and then your remaining debts are discharged.

In contrast, in a Chapter 13 bankruptcy plan, the trade-off is that your debts are not immediately discharged after the 341 meetings, but reorganized into a more manageable payment plan over the course of several years. The main aspect that may make chapter 13 bankruptcy appealing is the fact that, typically, you are able to keep your non-exempt assets, such as home equity. This can save your home from foreclosure. Additionally, non-dischargeable debts such as alimony and child support can be arranged into the more manageable payments of the Chapter 13 plan.

Some debts that are discharged in Chapter 13, but not Chapter 7, include:

  • Debts related to malicious property damage
  • Debts related to paying nondischaragable taxes
  • Debts from an unsuccessful bankruptcy case
  • Debts related to securities law violations
  • Some debts related to property settlement in divorce proceedings
  • Stripped or crammed down liens

Additionally, if you have co-signers or other liable third parties on your personal debts, creditors are unable to seek payments from these co-debtors. You also would not have direct contact with your creditors during the process - instead, a bankruptcy trustee would serve as an intermediary to communicate between you and your creditors and deliver payments.

In certain situations, such as people who have high equity in their secured assets, a chapter 13 bankruptcy plan may be the best option to get you back on your feet. However, it is vital that you meet with an experienced and knowledgeable Warminster bankruptcy lawyer who has your best interests in mind and can help you discover which course of action is the best for you to take depending on your specific case.

Choose McCullough Eisenberg for Pennsylvania bankruptcy lawyers with over 50 years of experience who can give you a free case evaluation! Call us at (215) 392-6696 today.

Filing Process for Chapter 13 Bankruptcy

In Pennsylvania, one of the main determinants for whether you can file for chapter 13 bankruptcy is your income. If your income is above the median income of a Pennsylvania resident, then chapter 13 is most likely for you. However, if it is below, you will probably be redirected to chapter 7.

Then, once you and your Warminster bankruptcy lawyer have decided chapter 13 is the best direction for you to take, you can continue the filing process.

Certain steps in the process typically involve:

  • gathering statements of income sources, taxes, significant financial transactions, assets, and etc.
  • determining with your attorney which property of yours is exempt and the amount of money owed to which creditors
  • creating “schedules” (petitions and specific forms) that state your current financial status
  • paying a court fee
  • proposing a repayment plan
  • attending a 341 meeting of creditors

If your plan repayment plan is confirmed at the 341 hearing, it is vital that you make payments in accordance with it over the following years so that your remaining debts can be discharged.

For more information, call our compassionate and helpful chapter 13 bankruptcy attorneys in Warminster at (215) 392-6696.

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