Debt can build up faster than most people expect. If you’re stuck dealing with nonstop collection calls, bills you can’t keep up with, and that constant sense of financial pressure, it’s not just you. Many individuals across Philadelphia and Montgomery County are in the same boat. For some, filing for bankruptcy Philadelphia might offer a real way forward— while not an easy step, it can provide meaningful relief.
In this guide, we’ll walk through the process step by step. If you’re considering filing for bankruptcy Philadelphia, whether it’s Chapter 7 or Chapter 13, having a clearer picture of your options can make all the difference—and help you avoid mistakes that could set you back even further.
Step 1. Determine Eligibility
The first step in filing for bankruptcy Philadelphia is determining the type that suits your financial situation before you file for bankruptcy in Pennsylvania:
- Chapter 7 or
- Chapter 13
Chapter 7 Bankruptcy allows you to discharge the debts:
- credit cards
- personal loans
- and medical bills.
- You must pass the means test to qualify for Chapter 7. This compares your income to the Pennsylvania median income for your household size.
- You automatically qualify if your income is below the state median.
- If your income is above the threshold, you must calculate your disposable income after essential expenses to determine eligibility.
- In this bankruptcy, you can repay your debts in a time span of three to five years. The court pre-approves this plan.
- Income and debt limits apply: as of 2024, unsecured debts must be below $465,275, and secured debts should not exceed $1,395,875.
- Chapter 13 can help prevent losing their home. The debtor gets a chance to gradually pay back overdue amounts.
Step 2. Complete Mandatory Credit Counseling
- Lasts 60 to 90 minutes.
- It can be completed online, over the phone, or in person.
- Costs are between $25 and $50, though fee waivers are available for low-income individuals.
- After completion, you will receive a certificate of credit counseling, which must be filed along with your bankruptcy petition.
Step 3. Gather and Submit Required Documents
- Tax returns for the past two years.
- Income statements (pay stubs, profit and loss statements, Social Security, or disability benefits proof).
- Bank statements from all active accounts.
- A detailed list of debts, including credit cards, medical bills, and personal loans.
- Asset documentation includes property deeds, vehicle titles, and investment accounts.
- Monthly expenses include rent/mortgage, utilities, groceries, and transportation costs.
Once you have gathered these documents, file your bankruptcy petition with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.
Step 4. Automatic Stay and 341 Meeting of Creditors
- Wage garnishments
- Foreclosure proceedings
- Evictions
- Debt collection calls and lawsuits
- The trustee will verify your identity and review financial disclosures.
- You must answer questions about your assets, income, and debts under oath.
- If additional documentation is needed, the trustee may request it before proceeding.
Step 5. Complete Debtor Education & Receive Discharge
- Covers topics like budgeting, credit management, and financial planning.
- Costs between $10 and $50, with fee waivers available.
- It must be completed before you can receive a discharge of debts.
Bankruptcy Discharge Timeline
- Chapter 7: The court typically grants a discharge within three to four months after filing.
- Chapter 13: You will receive a discharge after completing your repayment plan, which lasts three to five years.
Take the First Step Toward Financial Freedom
If you’re feeling overwhelmed by debt, don’t wait until it’s too late. Seeking filing for bankruptcy Philadelphia help can guide you toward the best path forward.