Allentown Lawyer Charles Laputka Explains Pennsylvania Chapter 7 Bankruptcy

In personal bankruptcy chapter 7, debtors wipe out their debts and get fresh start. Alimony, child support, fraud debts, and certain items cannot be discharged.

ALLENTOWN, PENNSYLVANIA, UNITED STATES, January 30, 2022 /EINPresswire.com/ -- In a personal bankruptcy chapter 7, debtors wipe out their debts and get a fresh start. Chapter 7 bankruptcy is a liquidation where the trustee collects all of the debtors nonexempt assets and sells them. In most Chapter 7 cases, debtors have no assets that are not exempt and so the Trustee will not sell any of the debtor's property. If the debtor has nonexempt assets, the trustee will sell these and pay them the proceeds. The leftover amount after this is then distributed to the creditors with a commission taken by the trustee who oversees this process.

Alimony, child support, fraud debts, certain taxes, and certain items charged cannot be discharged in a Chapter 7 bankruptcy. (see Pennsylvania Exemptions) In the vast majority of cases, people filing for bankruptcy will have large credit card debt and few assets. In a Chapter 7 personal bankruptcy, all debts are wiped clear.

Debtors can reaffirm secured debts such as their car, furniture or house by signing a voluntary “Reaffirmation Agreement”. The move does not cancel the debt, but it prevents it from going into default and allows debtors to repay a lower amount over a longer period of time. If debtors decide that they want to keep their house, car, or furniture and reaffirm the debt, debtors cannot declare bankruptcy on that debt for six years. If debtors want to reaffirm the debt, they will need to bring it up-to-date. If one is just over three or four months past due, then one will need to pay back these past payments in order to reaffirm their contract. Doing so is critical for one's continued business presence. Although it may be difficult to pay off the high balances on the more expensive assets, one can mention that they want to keep some property like where one lives and their furniture as well as some property that is of lesser value such as cars or jewelry.

Once a reaffirmation agreement is filed with the court, it can be set aside at any time before 60 days have passed, or if the judge orders an agreement to be discharged.

When filing for personal bankruptcy, most people cite medical expenses, excessive credit card debt, loss of employment, or divorce. These events not only lead to financial hardship but also emotional strain. If one is struggling to pay their bills, it's important that they explore all the possible solutions available to make sure the one they make a decision on will work in their favor in the long-term.

If one can't repay their debts, then federal bankruptcy may be an option for them. It's worth doing some research to find out more about the main features of this law and its application to one's own situation. It is usually recommended to consult with an experienced bankruptcy attorney if one is considering filing for personal bankruptcy. There are also online services that offer bankruptcy help, but their expertise will vary. If one decides to file for bankruptcy on their own, the process could be confusing for them. Talk to an expert first before starting on the bankruptcy paperwork.

Charles Laputka
Laputka Law Office LLC
+1 610-510-8317
claputka@laputkalaw.com
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Chapter 7 Personal Bankruptcy Lehigh Valley Laputka Law Office LLC.