If you stacked all of your credit bills, would they be the same depth as the Allegheny River? Are you tired of missing the pre-game tailgate because you’re too busy talking to debt collectors? Do you wish that you didn’t have to worry about your accounts being garnished due to unpaid taxes?
Pennsylvanians, if your response to one or more of those questions was a resounding, “Yes,” and you’ve had enough of being hounded by collections agencies, then a bankruptcy, Chapter 7 may be just what you need.
File for Chapter 7 Bankruptcy
A Chapter 7 bankruptcy isn’t as difficult or as scary as it sounds. To start off the process, you first have to hire a Pennsylvania bankruptcy attorney. While you may be able to file on your own with a pro se filing, a bankruptcy attorney can assist you in avoiding some of the common pitfalls that usually occur with self-filing. When you first meet with your Pennsylvania bankruptcy attorney, you’ll need to bring several important documents with you. With these documents, your attorney can determine the best way to help you:
- Last year’s tax return, plus that of your spouse
- A list of every debt that you owe, whether they are dischargeable or not
- Past six months’ worth of your pay stubs
- Deeds and titles to your home, any other residential property, and all of your vehicles
- A list of all of your physical assets, including jewelry, antiques, and other household goods
- Bank statements and other information regarding all any stocks, bonds or certificates of deposit
- Information regarding judgments, liens, and other government information
You Don’t Have to Live Like the Amish in Order to Qualify, Pennsylvania Residents
The Pennsylvania Dutch don’t have to worry about things like unpaid utilities and credit card bills because they grow their own food, don’t use electricity and rarely use credit. For those who don’t follow the Amish way of living in Pennsylvania, there are other options. You can file a Chapter 7 bankruptcy if meet the state income levels as listed below. Please note that these amounts can change:
- Family of 1 - $44,897
- Family of 2 - $53,706
- Family of 3 - $67,113
- Family of 4 - $79,916
- Families larger than 4 - add $7,500 for each person
Worried that your salary won’t make the cut? If you make above the income limit for your family size, you may still qualify for a Chapter 7 bankruptcy, thanks to the means test. A mathematical process that carefully weighs your income, assets and debts, the means test can determine if you will still qualify for bankruptcy. Instituted by the Bankruptcy Reform Act of 2005, if you are not able to qualify for this test, you may be able to file for a Chapter 13.How Long Will Bankruptcy Take?
The answer is: not as long as you think. After your initial meeting with your attorney, the next step is to fill out the bankruptcy petition. This petition is what gets filed with your local bankruptcy court after you complete two short, but mandatory courses on financial management. The purpose of these courses is to make sure that you get off on the right foot and are fiscally responsible after your bankruptcy is approved.
Once you petition is filed, the court appoints a trustee to your case. The trustee represents your debtors, and is available to answer all of their questions. At this point, you cannot be contacted by any debt collectors, since it is against the law for them to keep harassing you. They must either speak to the trustee or your attorney.
After your Chapter 7 bankruptcy petition is approved, your medical bills, liens and credit card debts will disappear. You’ll still be responsible for the following debts, though, since a bankruptcy, Chapter 7 won’t affect them:
- Child support and alimony
- Student loans
- New tax liens and debts
- Money owed due to fraud or to court judgments
With minimum complications a Chapter 7 bankruptcy should be complete in about six months.
Pennsylvania Residents can save their Homes
It’s important that debtors are able to keep some of their assets and property, otherwise survival after bankruptcy would be next to impossible. Those who file a Chapter 7 or 13 are allowed to keep a certain amount of assets depending on the state a debtor resides in. Some states, including Pennsylvania allow debtors to choose between state and federal exemption laws. Below are some exemptions according to the state of Pennsylvania:
- Home: No state exemption exists for a primary residence. Federal law allows for $21,625 in value.
- Household goods - $300 of any property and also 100% of the following:
- Wearing apparel
- School books
- Sewing machines for seamstresses
- Vehicle: No state exemption exists. Federal exemption: $3,450
- Wages: 75% of all earned but unpaid wages (does not include taxes)
- Benefits – includes 100% of the following:
- County employee’s retirements
- Public school employee’s retirement
- State employee’s retirement
- Police pension fund
- City employee’s retirement & pension
- Municipal employee’s retirement
- Workers' Compensation
- Unemployment Compensation
- Other exemptions:
- 100% Crime victims’ reparation awards
- 100% Tenancies by the entirety-certain circumstances
- 100% Crop insurance proceeds
- 100% Federal homestead lands and debts contracted before insurance of the patent
These exemptions and the amount available to keep may change annually. For more exemption laws, please see your local bankruptcy attorney.
You deserve to claim your free time back. Spending it worrying about the consequences of debt will make you miserable. Find happiness and file for a Chapter 7 bankruptcy today. Once it’s done you will be debt free.
Pennsylvania Bankruptcy Courts
17 South Park Row, Room B160
Erie, Pennsylvania 16501
Phone: (814) 464-9740
Ronald Reagan Federal Building
228 Walnut Street, Room 320
Harrisburg, Pennsylvania 17108-9988
Phone: (717) 901-2800
Robert N.C. Nix, Sr. Federal Building
900 Market Street, Suite 400
Philadelphia, Pennsylvania 19107
Phone: (215) 408-2800
600 Grant Street, Room 5414
Pittsburg, Pennsylvania 15219-2702
Phone: (412) 644-4060
400 Washington Street, Suite 300
Reading, Pennsylvania 19601-3915
Phone: (610) 208-5040
Max Roseann United States Courthouse
197 South Main Street, Room 274
Wilkes Barre, Pennsylvania 18701-1500
Phone: (570) 831-2500