Millions of Americans have credit card debt, medical debt, personal loan debt, or debts related to a court judgment. These debts can spiral out of control quickly due to loss of a job, unexpected illness, or just bad luck. These debts can often be significantly decreased or even completely eliminated through bankruptcy.
At Ross, Quinn & Ploppert, we have years of experience helping people overcome debt. We use every possible avenue to get you out of debt and give you a fresh start.
Chapter 7 Bankruptcy in PA and Unsecured Debt
Unsecured debt is debt that is not attached to a piece of tangible property, including credit cards, court judgments, medical bills, some types of taxes, and personal loan debt. This is different than secured debt such as a mortgage or car loan, which is attached to your home or car.
In most cases, you can discharge all of your unsecured debt in Chapter 7 Bankruptcy. There are some limits to this, such as past-due alimony or child support. There are also specific limits to discharging Student Loan Debt and unpaid state or federal taxes.
Chapter 13 Bankruptcy
Chapter 13 of the Bankruptcy Code provides for the adjustment of debts for individuals who receive regular income. Chapter 13 allows a debtor to propose a repayment plan in order to pay his debts over time, while being allowed to keep his property. The time from for payment is usually three to five years. There are some advantages of Chapter 13 Bankruptcy over liquidation under Chapter 7.
Our attorneys are ready to discuss your concerns and provide all answers to your questions. Our attorneys represent clients in Montgomery, Berks, and Chester Counties in Pennsylvania.
Common Bankruptcy Myths
We hear misconceptions every day about what bankruptcy means, and what it means for you. Most of these common misconceptions occur because the Bankruptcy Code is confusing. We want you to know the truth about bankruptcy. Below we have listed some of the most common myths and misconceptions regarding Bankruptcy. For further information, browse our Frequently Asked Questions page, or Contact Us.
MYTH – Bankruptcy is only for people looking for a last resort
Bankruptcy is for people overwhelmed by debt related to credit cards, medical bills, an unreasonable mortgage, or a number of other reasons
MYTH – People will know that you filed bankruptcy
People are always concerned that family or friends will find out that they declared bankruptcy. While Corporate bankruptcy is listed in the newspaper, personal bankruptcy is not. The debtor privacy in bankruptcy in PA is protected. Only a credit check will reveal your bankruptcy. It is your decision to let anyone else know about your bankruptcy.
MYTH – You Cannot Discharge Secured Debt (Car Loan or Mortgage) in Bankruptcy
You can discharge secured debt such as a mortgage or car loan in bankruptcy. Usually this is an option for people who absolutely cannot keep up with the payments or wish to let go of property that is now worth less than the loan.
It is also possible in Chapter 13 to negotiate down the amount of your auto loan, or strip a second or third mortgage (link to stripping a second (or third) mortgage).
MYTH – Personal loans are not dischargeable
Many people believe when they took out a personal loan for school, that it will be treated like a student loan, which is usually not dischargeable. However, almost all personal loans can be discharged through bankruptcy.
MYTH – Bankruptcy preparers and debt consolidators are better options than bankruptcy
Preparation services and consolidators can make these options sound good and less expensive, but they are truly exposing debtors to greater risks, potentially higher fees, far less legal protection, and no advice related to your unique financial situation.
Many people see the ads on T.V. to avoid bankruptcy and to avoid legal fees by hiring debt consolidation companies and non-attorney bankruptcy preparing services. However, what they do not tell you is that these services offer you much less legal protection, and usually end up costing you much more in the long run. Debt consolidation generally has significant tax consequences, and preparation services have no legal recourse for shoddy or careless work which may leave you owing thousands of dollars.
MYTH – Your creditors will get your assets in bankruptcy
Almost all property can be protected by state and federal exemptions in bankruptcy. There are very few cases where people will lose personal property in a bankruptcy. Our experienced attorneys can help you avoid this possibility with creative use of the Bankruptcy Code.
MYTH – Bankruptcy ruins your credit forever
Over time bankruptcy will generally improve your credit score. The largest aspect of your credit score is debt to income ratio, and bankruptcy will help you significantly lower your debt.
Do’s & Don’ts of Filing For Bankruptcy in PA
- Disclose every asset.
- Be open, honest, and forthright about all property you own.
- Tell us the truth about how you got into debt.
- Let us know what concerns you have.
- Share your financial goals with our Attorneys.
- Read your mail from us, return our calls, and respond to e-mails (everything we send you is important to your case, even if it doesn’t seem that way).
- Listen to our advice; we always have your best interest in mind.
- Be excited for a fresh start.
- Stress out – We know it is hard, but our methods are tried and true, we will take care of everything that needs to be done.
- Procrastinate – the earlier you get us requested information, the better we will be able to represent you.
- Hire a non-attorney bankruptcy service — Non-attorney advisors have popped up in the last few years, some even may have an attorney who is on their payroll. These companies are often referred to as bankruptcy mills and will not work diligently on your case. These companies are rarely regulated and rarely as successful as an experienced and local law firm.
- Take out any kind of high interest loan
- Live on credit
- Withdraw funds or loans from a 401(k) or other retirement accounts