Options in a Chester County Bankruptcy
Most individuals have the option of filing a Chapter 7 or a Chapter 13 bankruptcy.
First, the options depend on your income, assets and debts. It also depends on your goals — some people may want to “save” their Chester County home or car if they are behind on payments, others may want to be sure they can keep their home if they file for bankruptcy. After discussing your options and seeing what type of bankruptcy is best for you, you will begin the bankruptcy process.
First, we will have to perform a “means test” calculation to determine where your household income falls in qualifying for a Chapter 7 or Chapter 13. This is a complicated formula with a lot of exceptions, exemptions, and pitfalls. Most Chester County bankruptcy attorneys use a high-powered software program to extrapolate the means test.
Next, your assets will be determined to see if you have “non-exempt” assets. Most people in bankruptcy are able to keep all of their assets because they are within the allowable exemptions.
Next, we will have to determine your debts. Are you current on your home? Car? What amount of credit card debt do you have? Medical debt? All of these debts are important in assessing whether you are a Chapter 7 or Chapter 13.
Other Issues for a Bankruptcy
Your goals: Some people in Chester County want a clean, fresh start. They are willing to surrender their home an just want to get rid of all of their debt. These individuals, if they qualify, normally are a Chapter 7.
If, however, you are facing foreclosure or sheriff sale in Chester County, you may want to consider a Chapter 13 to “save” the home. In a Chapter 13, your Chester County bankruptcy lawyer will formulate a Chapter 13 payment plan that will help you catch up on your missed payments.
So, what are some of the main reasons people file a Chapter 7?
- They qualify on the means test
- They want to stop creditor harassment
- They want a fresh start free from overwhelming debt
- They have property that is fully exempt
- They are current on payments on their cars or home
And what are some reasons people in Chester County file for Chapter 13?
- They are behind on home or car payments and want to save their home/stop foreclosure or sheriff sale
- They have nonexempt property that they desire to keep
- They want to try and “strip down” a second mortgage
- Your income for your household is too high for a Chapter 7
Bankruptcy in Chester County is highly technical and complicated. I have tried to assist in making a very murky and scary process clearer. Please contact me for a free consultation so we can begin to determine the best path and strategy for you.