Bankruptcy is a legal procedure that allows individuals to reorganize or eliminate their debts when they are unable to pay them. In Pennsylvania, Chapter 7 bankruptcy is the most common type of bankruptcy, allowing individuals with low income and few assets to discharge most unsecured debts.
Eligibility Requirements
Individuals must have unsecured debt of $394 or less (including credit cards, medical bills, and personal loans), plus a showing of not having enough income to pay their debts in full.
Those who are currently employed may be eligible for Chapter 7 bankruptcy if they can prove that they will continue to work after the bankruptcy is discharged.
Court Process
The bankruptcy process typically begins with a meeting with a trustee, followed by filing paperwork and a court hearing. After approval of the petition, the trustee will liquidate non-exempt assets and sell them to pay off creditors.
Chapter 13 Bankruptcy: A Repayment Plan
Chapter 13 bankruptcy is a type of bankruptcy that allows individuals with regular income and assets to create a repayment plan to pay off debts over three to five years. This option is ideal for those who want to keep their credit cards, wages, or other secured items but need to discharge non-dischargeable debts.
Eligibility Requirements
Individuals must have unsecured debt of $394 or less (including credit cards, medical bills, and personal loans), plus a showing that they will continue to pay their regular living expenses after the bankruptcy is discharged.
Those who are currently employed may be eligible for Chapter 13 bankruptcy if they can prove that they will continue to work after the bankruptcy is discharged.
Court Process
The bankruptcy process in Chapter 13 typically begins with a meeting with a trustee, followed by filing paperwork and a court hearing. After approval of the petition, the trustee will review the repayment plan and ensure that it is feasible to meet the payments.