Montgomery, Chester, and Berks County Chapter 7 Bankruptcy Lawyers
Our Montgomery, Chester, and Berks County attorneys have helped countless people discharge their debt and get a fresh financial start through Chapter 7 Bankruptcy. The skilled attorneys at Ross, Quinn & Ploppert use extensive knowledge and time-tested methods to discharge your debt and getting you out of financial trouble.
We have the experience needed to fight for you in your Pottstown, Reading, King of Prussia or West Chester area Chapter 7 bankruptcy case. We have handled countless Chapter 7 bankruptcies, which means that we will not be guessing or learning on the go with your case. We will provide you concise legal advice based on years of experience and success.
Below, we have listed several common questions that people ask us when considering filing Chapter 7 Bankruptcy. If you have any concerns about these common questions, or would like some clarification, please do not hesitate to contact our office.
Chapter 7 Frequently Asked Questions:
What is the advantage to filing a Chapter 7?
The most obvious advantage is that a debtor can release all unsecured debt without tax obligations. Replacing the cost of the unsecured debt will be attorney and court fees, which in most cases are minor in comparison to the debt that will be discharged. Over time, a debtor’s credit will improve dramatically, which is another advantage of Chapter 7 Bankruptcy. Without the cost of paying off unsecured debts such as credit cards, the debtor will have more discretionary income and therefore be categorized as a lower risk to default on debts. One more benefit is the flexibility to discharge secured debt if you are willing to relinquish the property. For example, if you owe too much on a mortgage, and have no way of paying it back, you can let the property go free and clear without having to pay the difference between what you owe and what the bank receives for the property.
Are there disadvantage to filing bankruptcy?
Yes, while there are advantages there are obviously also disadvantages. The debtor’s ability to get credit after filing a bankruptcy will diminish. At first, obtaining credit will be difficult, but as your credit score rises after the initial drop. it will be much easier to obtain credit. In most cases, it will be easier to obtain credit than it was prior to the Bankruptcy. Another disadvantage is that the Bankruptcy remains on your credit report for 7-10 years.
Instead of filing bankruptcy, should I consolidate my debts?
No! Although several companies advertise that they can negotiate your debt down, in most cases they do not work. These companies may charge you a flat fee or a fee every month. Additionally, these companies try to alleviate your debt by making you take out a home equity loan that secures itself against your home. Furthermore, when these companies renegotiate your debt down, it creates a taxable interest that cannot even be discharged if you later decide to declare Bankruptcy. These companies advertise pennies on the dollar, but that is not the case. For example, if you owe $50,000 and they negotiate down your debts to $10,000, you will receive a 1099 tax form where you have to claim the $40,000 as an unearned income. On top of paying the non dischargeable taxes on this amount, you will also have to pay the fees that the company charges and still pay on the amount left over. In comparison, all secured debt will disappear and there will be no tax obligations on the discharged amount if oyu file a bankruptcy. All that will be owed are the attorney and court filing fees (at a much lower price than the fees for consolidation).
Will a bankruptcy appear on my credit report?
Yes, a Bankruptcy will remain on your credit report for 7-10 years. However, due to the fact that Bankruptcy is only one of many factors, in many cases filing Bankruptcy may end up raising your credit score dramatically. Once we look at your credit score, we will be able to give you an estimate on how your score will look post-petition.
How quickly can a bankruptcy be filed?
As soon as the attorney receives all information discussed above, and the debtor finishes the credit counseling certificate, a Bankruptcy may be filed.
What information must I provide to my attorney?
Proof of income (pay advices) for 6 months prior to the Bankruptcy filing, proof of insurance (home/auto), copies of medical bills, any debts not listed on a standard credit report, and Tax Returns for the two years prior to filing for the Bankruptcy.
Can people find out if I file bankruptcy?
The methods which people may use to find out about a Bankruptcy are limited. However, generally people can access court proceedings, 341 meetings, and information on the docket of the court in which the Bankruptcy is filed.
If I declared bankruptcy in the past, can I file now?
There is a statutory period of time which must lapse before a person can file another Bankruptcy, and a debtor may not have a previous Bankruptcy dismissed with prejudice. The statutory period between Bankruptcies varies based on the chapter of bankruptcy you filed in the past. A Chapter 7, for example, requires 8 years to pass before you may file another Bankruptcy.
What is a 341 meeting?
A 341 meeting is also referred to as a “meeting of the creditors”. Approximately 4-6 weeks after filing Bankruptcy, the Trustee will schedule the 341 meeting. Here, the Trustee will ask multiple questions in regards to your debt and examine the Petition filed with the court. These questions by the Trustee will require full disclosure on income, expenses, and assets.
If I file a bankruptcy, must my spouse file as well?
No. If you file Bankruptcy, your spouse does not need to do so as well. However, if one spouse does not file, that spouse is still responsible for paying any debt for which they are listed as a debtor. So it could be advantageous if all the debt is in one spouse’s name only. However, if the debt is in both names, it would cost significantly less to file together than to file separately at different dates.
I have a lot of student loans, is it possible to get rid of them?
Except in certain extreme hardship circumstances, school loans are non-dischargeable. One of the most common circumstances that would count as hardship extreme enough to discharge student loan debt would be a medical condition that leaves a person unable to work. Sometimes however, a personal loan is made to look like a student loan, and even though you may have used that loan to pay for school. it is not necessarily non-dischargeable.
Can I still file with my income?
The calculation to determine eligibility for Bankruptcy takes into account many factors such as income, expenses, dependants, and secured debt payments. Making a generalized statement about whether or not someone can file is almost impossible. In addition to the use of the means test, the Trustee will also look at an expected future income and expected future expenses. The simple truth is there is no hard line which a debtor must be over or under to determine if a Bankruptcy is possible.
What is a means test?
The Means Test is used to determine if a debtor has too much income to declare a Bankruptcy based on the average cost of living expenses and income for the county in which the debtor resides. The means test also incorporates the debtor’s number of dependents, spouse’s financial position, number and age of debtor’s vehicles, medical expenses, etc. This test is much like a tax return, and determines eligibility for bankruptcy.
How much does it cost to file Chapter 7 bankruptcy?
In addition to Attorney’s Fees, the court fee for a Chapter 7 is $335 whether you are single or filing jointly.
How much credit card debt can be discharged through bankruptcy?
All of it! While a debtor may not use a credit card for major purchases (such as major appliances, expensive electronics, furniture sets, etc.) within 60 days of filing, there is no limit on the amount of credit card debt that can be discharged in a Bankruptcy. The use of a credit card for essential items such as gasoline, groceries, or other basic necessities will most likely not affect the ability to file.
Is a Chapter 7 bankruptcy still available if I am behind in my payments for my mortgage and/or car?
Yes you may. When a debtor is behind on their mortgage or car payments and generally do not intend to keep that particular property, they may declare a Chapter 7 Bankruptcy. When someone does not plan on keeping property (such as a house or car), the advantage in declaring a Chapter 7 is that there is usually a gap between what the property will sell for and what the debtor still owes on the property. If one were to declare a Chapter 7, the debtor does not have an obligation to repay the difference, since the debt is discharged through the Bankruptcy. If the debtor does not declare Chapter 7, he/she has a personal obligation to pay the difference between what the property sells for and what they still owe on the property.
Does the change in bankruptcy law allow me to still declare bankruptcy?
Although some of the requirements for information that must be submitted by both debtors and attorneys have changed, a person in debt certainly may still declare Bankruptcy. Some of the changes to Bankruptcy laws include the requirements for Debtors to include and a Pre-Petition and Post-Petition Credit Counseling Certificate. Attorneys must now include a Financial Means Test calculation and more specific income verification. Although this does make filing Bankruptcy more of a meticulous process, it does not in any way restrict the ability to declare Bankruptcy.
What is Chapter 7 Bankruptcy?
A Chapter 7 Bankruptcy is a way to discharge all unsecured debt such as credit card debt or medical bills. If a debtor wished to keep secured debt (such as a house or car), they must be current on all payments towards those debts. However, if the debtor wishes to let go of the house or car, they may do so and they are relieved from the obligation to repay those debts. This can be a legitimate option since a debtor often owes more than a house or car is actually worth. This is a relatively cut and dry process that will usually be done without any complications.
Contact Our Pottstown Area Bankruptcy Lawyers Today
Our attorneys are ready to discuss your concerns and provide answers. Our attorneys represent clients in Pottstown, Norristown, West Chester, Reading, and the surrounding areas.