Chapter 7 Bankruptcy Lawyer, PA

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, also referred to as “liquidation bankruptcy,” is a legal process that is designed to help individuals reduce or eliminate some or all of their secured and unsecured debt, including but not limited to credit card debt, medical bills, collection accounts, auto loans, and personal loans. It is often the best option for those with very little income and are unable to repay any or part of their debt. Chapter 7 allows you to get a fresh start by discharging most kinds of qualifying debt.

Who Qualifies for Chapter 7 Bankruptcy?

Income Limits

Your household income must be below a certain threshold to file for Chapter 7 bankruptcy. That threshold is based on the median income in your state and the size of your household. If your income is below that limit, you may be eligible to file under Chapter 7.

The Means Test is used to determine whether or not you qualify. It’s a formula that determines your disposable income. If your disposable income is low enough, you may qualify under Chapter 7.

Asset Limitations

Even if you meet the income qualifications, asset limitations will come into play. Chapter 7 allows specific assets to be exempt. There are the usual obvious things: your house, car, personal savings, retirement accounts, and personal items. However, the value of these assets must be below specific exemption limits.

It would be advisable to consult with a Chapter 7 bankruptcy attorney to discuss asset valuation and exemption planning to maximize asset protection.

Benefits of Chapter 7 Bankruptcy

Filing Chapter 7 bankruptcy may be considered one of the best decisions for people burdened with mounting debt. Filing bankruptcy is a legal method for discharging many kinds of debts and reorganizing your financial life. The following are some of the major advantages of filing Chapter 7 bankruptcy:

Debt Discharge

Discharge of Most Secured and Unsecured DebtsChapter 7 bankruptcy may help get rid of various secured and unsecured debts such as credit card balances, medical bills, personal loans, and many more. This gives individuals a fresh start by legally wiping out those financial debts. No Repayment PlanUnlike bankruptcy under Chapter 13, which requires a court supervised Repayment Plan, Chapter 7 bankruptcy does not involve a Repayment Plan. This automatically means that qualifying debts are quickly wiped out. Read More

Immediate Relief Through the Automatic Stay

Protection from CreditorsA Chapter 7 petition activates the Automatic Stay upon filing. This can make it illegal for creditors to contact you with harassing phone calls and letters, wage garnishment, foreclosure, and repossession.

Peace of MindThe Automatic Stay can make it illegal for creditors to harass you and continue collection activity such as wage garnishment, phone calls, repossession, and foreclosure.

Retention of Exempt Assets

Protection of PropertyWhile non-exempt assets may be sold to creditors to pay debts, Pennsylvania has general exemptions that protect essential property such as your primary residence, vehicle, retirement accounts, and household goods and furniture. Law by Exemptions May VaryUnder different federal or state exemption laws, debtors can retain rather substantial assets while discharging most of their unsecured debts. Read More

Relatively Quick Process

Speed of DischargeChapter 7 bankruptcy is generally wrapped up within 3-6 months from the date of filing. This speed will allow you to move on with life and rebuild your credit relatively quickly.

Less Administrative BurdenCompared to Chapter 13, the length of time and the steps involved make Chapter 7 less burdensome.

Financial Health After Bankruptcy

Credit Rebuilding OpportunitiesAlthough bankruptcy will initially hurt credit scores, most filers find that their scores improve approximately a year after filing. Debt-to-Income Ratio ResetIn instances where large portions of debt are eliminated, it can improve your debt-to-income ratio, which increases your credit score, and allows you to qualify for new credit. Read More

Emotional and Mental Relief

Reduced StressMost people who receive a Chapter 7 discharge of their debt feel instant stress relief because the burden of the debt and creditor harassment is eliminated.

New BeginningEliminating overwhelming debt allows you to get a fresh start and provides you with an opportunity to chase your goals, dreams, and quest for financial stability.

The Chapter 7 bankruptcy filing Process

A Chapter 7 bankruptcy filing is an elaborate process that includes the following steps that must be followed to successfully discharge your debt. The step-by-step overview of how to file Chapter 7 bankruptcy includes the following:

Pre-Filing Preparation

Pre-filing preparation is the first step towards filing for Chapter 7 bankruptcy protection and discharge of your debt.

Assess your financial situation: Before filing, your financial condition must be assessed to determine if Chapter 7 is the best option. Consulting with a Chapter 7 bankruptcy attorney is essential. Contact Jefferson Law, LLC today for a free consultation.
Means Test: Complete the means test to confirm eligibility for a Chapter 7 filing by comparing your income against the median income in your state to ensure that your gross monthly income meets the requirements for a Chapter 7 bankruptcy filing.
Credit Counselling Course: Take an approved credit counselling course within 180 days before filing. You cannot successfully file until after you take the first credit counselling course and obtain a credit counselling certificate.

Document Collection

Necessary Documents: Collect required documents and financial records such as:
1. Pay stubs and tax returns
2. Bank account statements
3. Retirement and investment account information
Asset Valuation and Exemption Planning: Value all assets and apply exemptions to protect those assets.

Filing the Petition

Bankruptcy Forms: The unrepresented debtor will need to create and fill out official bankruptcy forms. These typically include, but are not limited to, specific information relative to income, expenses, assets, debts, and property exemptions.
Filing Fees: Pay the filing fee. For 2024, the Chapter 7 filing fee is $338.
Filing the Petition: The completed petition, forms and schedules are filed with the bankruptcy court. Filing marks the official beginning of your case, immediately activates the Automatically Stay, and makes it illegal for creditors to continue collection activity and harassment.

Appointment of a Trustee

Trustee Assignment: The court assigns a bankruptcy trustee to your case. The trustee’s work is to review your petition, forms and schedules, confirm that the documents you have submitted are complete and accurate, and sell non-exempted assets.
Communication with Trustee: The trustee may require you to submit additional documentation.

Meeting of Creditors (341 Meeting)

Attend the 341 Meeting: The trustee schedules a 341 meeting approximately 21 to 40 days from the date of filing. Before the meeting begins, you will be placed under oath and the trustee and creditors will ask questions to verify your finances and information in the petition. While very few creditors ever show up to these meetings, the trustee always appears to ask you many questions to determine who you are, and to verify that the information in the petition, forms and schedules is truthful and accurate.
Tips for Preparation: You must bring the following documents to the 341 Meeting: valid photo identification; acceptable proof of your social security number, and a signed copy of the Chapter 7 petition, forms, and schedules.

Liquidation of Non-Exempt Assets

Asset Review: The trustee is entitled to review your assets to determine if any are non-exempt and eligible for liquidation. Since each state dictates which , assets can be considered exempt, what is kept versus sold depends on your location and the associated laws.
Distribution to Creditors: The proceeds from any liquidated assets will be distributed to creditors according to the priority structure set forth under bankruptcy law.

Complete Debtor Education Course

Take the Second Course: You cannot receive a discharge of your debt until after you take the second course and obtain another credit counselling certificate.
Filing of Certificate: The counselling certificate must be filed in the bankruptcy court.

Discharge of Debts

Order of Discharge: Unless anyone objects, your debt will be discharged approximately 60 to 90 days after the 341 meeting, and the court will issue an order discharging all eligible debt listed in the petition, forms and schedules. The court order wipes out qualifying debts.
Notice: Both you and your creditors will receive a copy of the discharge notice and order.

Case Closure

Case Closure: The court will officially close the case when all proceedings are finished, including any disposition of the non-exempt assets.
Credit Report Update: The discharge should also be reflected on your credit report to show that under Chapter 7 bankruptcy, debts have been eliminated. This entry would normally last for 10 years from the filing date.

How We Help at Jefferson Law, LLC – Your Trusted Montgomery County Chapter 7 Attorney

At Jefferson Law, LLC, we know that overwhelming debt can disrupt every aspect of your life. Deciding to file for Chapter 7 bankruptcy protection is a significant step, and you need experienced, compassionate guidance to effectively navigate the process. Jefferson Law, LLC specializes in Chapter 7 bankruptcy law and has a proven track record of helping individuals and families in Pennsylvania, Philadelphia, and all surrounding counties get the fresh start they deserve. Here’s how our Chapter 7 law firm can help you successfully file for Chapter 7 bankruptcy protection:

Personalized Case Analysis

At Jefferson Law, LLC, we take the time to understand your financial situation as every case is unique.

In-Depth Consultations: We will review your income, debts, and assets to determine whether Chapter 7 bankruptcy is the right solution for you. Call now for a free consultation!

Guidance Through the Chapter 7 Means Test

The Means test is complex. However, our Chapter 7 law firm will help you understand it.

Expert Support: We will manage every step of the process to ensure that you meet the requirements for a Chapter 7 bankruptcy filing.
Clear Communication: We’ll explain the process so that you understand what is going on with your Chapter 7 bankruptcy case, and thoroughly prepare you for the 341 Meeting with the bankruptcy trustee.

Seamless Document Preparation and Filing

Filing Chapter 7 bankruptcy requires a lot of paperwork. To ensure that the correct documents are collected, processed, and filed, our firm will guide and assist you with:

Collection of all documents: We will provide you with a checklist of all required documents needed to prepare the filing and deliver those documents to the bankruptcy trustee.
Cloud Based Folder: You will be given access to a cloud-based folder so that you can conveniently and securely upload the required documentation to your file. You can also deliver the documents to our office.
Professional Filing: We will prepare and electronically file your bankruptcy petition, forms and schedules with the bankruptcy court.

341 Meeting Preparation and Representation

The 341 Meeting of the creditors with the bankruptcy trustee can be intimidating for an unrepresented individual. With Jefferson Law, LLC by your side, you are never alone! We will do the following to ensure you are prepared and confident:

Preparation and Rehearsal – We prepare you for the 341 meeting by discussing potential questions and making sure you have the necessary documentation.
Experienced Representation – Your Philadelphia Chapter 7 bankruptcy attorney will attend the meeting with you to advocate on your behalf and address any issues that may arise.
Understand Trustee Expectations – Jefferson Law, LLC has practiced before every Chapter 7 bankruptcy trustee in this area, and we know what each expects us to deliver before and during the 341 Meeting.

Asset Protection Strategies

One of the key things we focus on is how to protect your assets:

Maximizing Exemptions: We identify exemptions that can be applied to protect essential assets such as your house, vehicle, income, and all other personal property.
Impact Minimized: In the rare event that the need does arise to sell certain non-exempt assets, we work to minimize the impact this will have on your life.

Completion of Mandatory Courses

You must obtain pre-and-post filing counseling certificates to file for Chapter 7 bankruptcy protection and obtain a court ordered discharge of your eligible debt.

Counseling and Education: We guide you through the process of obtaining approved credit counseling and debtor education certificates to meet pre-and-post-filing requirements.
Timely Filing: Our staff will file the certificates with the bankruptcy court to ensure a successful filing and discharge of your eligible debt.

Securing Your Debt Discharge

The goal of Chapter 7 bankruptcy filing is to receive a discharge of your debts. If you qualify and follow our guidance, you will receive a court order discharging your qualifying debt. Why Jefferson Law, LLC?

Trusted Chapter 7 Bankruptcy Lawyers: With years of experience as a Philadelphia Chapter 7 bankruptcy Law Firm, we offer reliable and informed legal assistance.
Clear, Honest Communication: We ensure that you are fully informed throughout the process, building trust and confidence.
Client-Centered Approach: Your well-being and financial recovery are always our main focus.

Still Have Questions? Contact Jefferson Law, LLC

For a free personalized consultation with an experienced Philadelphia Chapter 7 bankruptcy attorney, contact Jefferson Law, LLC today and take the first step toward a stronger financial future.