Filing for Bankruptcy in Pennsylvania

A bankruptcy filing begins prior to the time the legal paperwork is filed in bankruptcy court.  With more than one type of bankruptcy filing available, you first need to determine your qualifications to file and then do a great deal of preparatory work to establish your exact financial situation.  At this point, you are in a position to identify the right kind of bankruptcy to file, prepare the legal documents, and file with bankruptcy court.

Qualifying for bankruptcy

Your financial and employment situation determines your qualification for bankruptcy as well as which type of bankruptcy is right for you.

  • Chapter 7:  You may qualify for Chapter 7 if you are unemployed or earning less than a median income defined by Pennsylvania.  In most cases, those who qualify for Chapter 7 have little non-exempt property for a trustee to sell.
  • Chapter 13:  If you have a stable income, including disposable income that can be used to eliminate debt over time, you may qualify for Chapter 13. Additional requirements include a limit on the amount secured debt (backed by property that can be taken if you do not pay) and another limit on unsecured debt (unbacked debt, such as credit cards).

Preparing your financial information

This is typically the most difficult part of bankruptcy filing.  You must be able to produce complete records of assets and debt, including the following:

  • A full listing of all outstanding debt and the terms of that debt
  • A list of all property and assets you own
  • An accounting of all sources of income you are currently receiving
  • A record of all financial holdings, including bank accounts and retirement accounts

If you do not accurately report every detail of your finances, your filing can come to a sudden stop.  If you leave out any debt information, that debt cannot be considered in your bankruptcy, and you continue to be responsible for it without the benefit of any negotiation.  If you retain an experienced bankruptcy attorney who knows the questions to ask, your accounting is most likely to be accurate and complete.

The actual filing

At this point, you may be wondering what the steps are for filing for bankruptcy in PA.  The basic process involves accurately completing the required forms and filing your petition with the bankruptcy court.  Once filing is complete, your creditors must stop all collection efforts until a new plan has been created within the bankruptcy process.

The process between Chapter 7 and 13 varies greatly:

  • Under Chapter 7, the court identifies any assets that you are not allowed to keep and order them to be sold to partially repay outstanding debt.  After that, your remaining unsecured debt is erased. 
  • Chapter 13 is much more complicated, requiring meetings between you, a court-appointed trustee, and all interested creditors to establish a repayment plan for each outstanding debt.  Once all outstanding debt has been repaid, you emerge from bankruptcy with a clean slate.

Free initial consultation

Filing bankruptcy is a complicated process.  Regardless of whether you are an individual filing for the simplest form (Chapter 7) or an individual or business reorganizing through Chapter 13, you will see the best results by retaining an experienced Pennsylvania bankruptcy attorney. 

If you are considering bankruptcy as an option for your debt problems, make sure you choose Chapter 13 bankruptcy lawyers who understand the local laws and take the time to look at your individual personal or business situation to find the best solution for you.  Contact the experienced attorneys at Cibik & Cataldo, P.C.  We will help find the best fresh start you need and support you through every step of the process.