Common Questions About Bankruptcy
Do you have questions about the bankruptcy process in Reading and Berks County? As a seasoned Reading bankruptcy attorney with nearly 25 years of experience, I have the knowledge, insight and experience to answer your questions and help you decide if bankruptcy is right for you.
As my clients' greatest legal advocate, I am committed to sharing my knowledge about bankruptcy and helping them make informed decisions about their financial future. With the ability to represent clients in both state and federal cases, I have an in-depth knowledge of the Pennsylvania court system. Further yet, I began my legal career working as an assistant district attorney, where I developed valuable relationships with judges and courtroom staff in Berks County, which I have continued for over 20 years.
If you have questions regarding Chapter 7 or Chapter 13 bankruptcy, I encourage you to read the frequently asked questions I have included below. For further information, please feel free to contact me directly at the firm.
What is a Chapter 7?
Chapter 7 is known as the "liquidation" bankruptcy where a bankruptcy trustee liquidates the debtor's non-exempt assets to pay off creditors. However, since many Chapter 7 filings are no-asset cases, often debtors don't lose anything. With a Chapter 7, the debtor is released from personal liability from specific debts and creditors are prohibited from taking any kind of collection action on those debts.
What is a Chapter 13?
Chapter 13 is considered the "debt reorganization" bankruptcy. With a Chapter 13, the debtor pays all or a portion of his or her debts over a period of 3 to 5 years. A bankruptcy trustee collects an affordable, monthly payment from the debtor, and the trustee distributes that money to creditors. The debtor has no interaction with his or her creditors once he or she is put on a repayment plan.
What is a bankruptcy discharge?
The bankruptcy discharge releases the debtor from personal liability for certain specified debts. Once debts have been discharged in bankruptcy, the debtor is no longer legally required to pay any debts that have been discharged. What's more, creditors are prohibited from taking any collection actions on discharged debts.
Are all debts discharged in a Chapter 7?
No, not all debts can be discharged in a Chapter 7. While a debtor can usually discharge unsecured debts such as credit cards, personal loans and medical bills, a debtor cannot discharge debts for child support, spousal support, court-ordered fines, recent taxes, victim restitution and certain student loans.
Can bankruptcy save my home from foreclosure?
A Chapter 13 offers many advantages over a Chapter 7. Perhaps most significantly, the opportunity to save a debtor's home from foreclosure. By filing a Chapter 13, debtors may stop foreclosure proceedings and may cure delinquent mortgage payments over time. However, the debtor must still make their mortgage payments as they come due under their Chapter 13 repayment plan.
What is the automatic stay?
The "automatic stay" is an injunction that automatically stops lawsuits, foreclosures, wage garnishments, and all other collection activity against the debtor the moment the Chapter 7 or Chapter 13 bankruptcy petition is filed. Once a debtor files for bankruptcy protection, he or she will enjoy the benefits of the automatic stay because all collection calls and letters in the mail will cease immediately.
Will filing for bankruptcy ruin my credit?
If you're ready to file for bankruptcy, your credit has probably already suffered damage from late payments, charge offs or collections. While bankruptcy can stay on your credit report for up to ten years, if you follow some important credit rebuilding steps, you can be on your way to a credit score in the 700s long before the bankruptcy falls off your credit report. This is very encouraging for those who worry that they won't be able to reestablish good credit – because they can!
Contact a Reading bankruptcy lawyer today!
Do you have more questions about bankruptcy? I urge you to contact me, Curtis E. Barnes, Attorney at Law to arrange a consultation. I will go over the details of your case and advise you on how you should proceed forward. If I don't believe that bankruptcy is your best option, I will tell you so. On the other hand, if bankruptcy could dramatically improve your circumstances and give you the financial fresh start you need and deserve, I will guide you every step of the way!
Contact my office today to arrange your initial consultation. I look forward to helping you!