Chapter 7 Bankruptcy
Chapter 7 bankruptcy is an option for many lower-income individuals seeking debt relief from significant financial hardship. I am an experienced Pittsburgh bankruptcy attorney who can help you explore whether Chapter 7 bankruptcy is an option for you.
- Stop Credit Card Lawsuits
- Quiet Harassing Phone Calls and Letters
- Discharge High-Interest Credit Cards
- Remove Bank and Property Liens
- End Wage Garnishments
- Eliminate Massive Medical Bills
- Rebuild Your Credit
Chapter 7 bankruptcy has the potential to resolve many nagging debt issues. Most types of unsecured debt can be eliminated. This includes credit card debt, medical bills, "pay day loans", personal loans, and even debt related to a personal business. As long as these debts aren't too recent and were not procured by fraud, they most likely can be discharged (or eliminated). Debts properly discharged through a Chapter 7 bankruptcy will be eliminated for good. The creditor cannot attempt to collect now, or ever again.
Chapter 7 bankruptcy can also wipe out judgments on your record, whether these judgments relate to a credit card, a car repossession, or a foreclosure. These judgments destroy credit by creating ongoing negative reporting to credit agencies. Of more concern, they can also result in your property being seized or your bank account being frozen. These judgments don't go away; consequently, they can cause significant problems well into the future.
An important part of any Chapter 7 bankruptcy is the "automatic stay". The bankruptcy "automatic stay" prevents creditors from attempting to collect debts, from filing or proceeding with a lawsuit, or even attempting to contact you. Not only will this greatly reduce the stress in your life, it will also allow you to get back onto your feet. The automatic stay takes effect the moment your Chapter 7 bankruptcy is filed. Therefore, there will often be a benefit to filing sooner rather than later.
As discussed below, and elsewhere on this website, your personal property can be protected in Chapter 7 bankruptcy. Your property can be protected, your debt concerns can be eliminated, your legal record can be cleared, and your credit can be restored. While not everyone will be eligible, for those who are, Chapter 7 bankruptcy is a great option for ending financial distress.
HOW DO I KNOW IF CHAPTER 7 BANKRUPTCY IS FOR ME?
As a Pittsburgh bankruptcy attorney, I help individuals determine if Chapter 7 bankruptcy is an option for them. In some cases, you may only be eligible for a Chapter 13 bankruptcy. In other cases, there may be alternatives to bankruptcy. I may be able to negotiate a significant reduction on a debt, as creditors take phone calls from bankruptcy attorneys very seriously (they know I might file a bankruptcy and leave them with nothing). However, there are a number of scenarios where Chapter 7 bankruptcy is both available and appropriate.
Your free consultation will involve a detailed review of your debts, assets, income, and other factors relevant to your Chapter 7 bankruptcy eligibility. Most attorneys offer a free consultation, but I take the time to listen, learn your situation, and respond with thoughtful advice. You'll never be pressured to do anything in my office.
Your ability to file a Chapter 7 bankruptcy is determined by numerous factors. Your monthly income must be calculated and included in a "means test" (see the glossary section for more details). The value of your property, and the types of debt you are facing also play an important role in your eligibility. Please read our page, Do I Qualify For Bankruptcy for a more thorough explanation.
If you are eligible, and Chapter 7 bankruptcy makes sense for you, we can get the process started. If you are not eligible, we can discuss your alternatives. Either way, I'll give you the knowledge you need to tackle your problems.
Will chapter 7 bankruptcy destroy my credit score? IN A WORD, "No".
While bankruptcy is one variable credit agencies use to calculate your credit score, it is only one of many factors. Credit agencies look for ongoing lawsuits, liens, and late payments. In all likelihood, if you have been sued by a creditor or if you have been late on multiple payments, your credit score is already damaged. The longer these problems are ignored, the longer your credit score will be harmed.
Chapter 7 bankruptcy is a way to hit the "reset" button and begin the process of fixing your credit score. Chapter 7 will remove liens and end lawsuits, and it will eliminate the ongoing debt and missed payments. With your credit cleared up, you will be able to finally begin the process of rebuilding your credit score.
I will advise you on some simple steps that will get your credit score shooting up after bankruptcy. From using pre-paid credit cards to consistently paying bills on time (which is much easier to do with your old debt removed), a few simple steps and a little time can result in amazing results. By taking the proper actions, your credit score should go up within months, not years, after bankruptcy. The worst thing for your credit score is to not address the problem.
Will I LOSE MY PROPERTY IN A CHAPTER 7 Bankruptcy?
In most cases, absolutely not! Bankruptcy law allows for a series of "exemptions" that an experienced bankruptcy attorney can use to protect your property. This includes personal items, a car, equity in your home, savings and retirement accounts, and most other property. The bankruptcy exemptions are designed to give filers a fresh start with all the property they need to go forward in their life.
It's important to disclose all of your property to your attorney so that it can be exempted and protected. Your attorney will go through a detailed review of your property, including your real estate, your cars, your savings and retirement accounts, even your personal items and household goods. Don't be alarmed, this process is for your own protection. If your property is not disclosed, it can't be protected. By going through the process of listing all of your property, you are assuring you will get to keep it, and you will be guaranteeing that any judgment liens on the property will be removed through bankruptcy.
As an experienced Pittsburgh bankruptcy attorney, I can help you "exemption plan" and protect your property. If Chapter 7 bankruptcy can't protect your property (and once again, it normally does) I can help you determine if Chapter 13 bankruptcy is a better option for you. I will decide if the Pennsylvania state or the Federal exemptions are your better option (as both are available in Pennsylvania bankruptcy filings). My familiarity with bankruptcy exemptions will assure the safety of your property.
I will also help you time your bankruptcy filing to maximize what property can be protected under the Bankruptcy Code. I will never rush you into filing a bankruptcy; if waiting several months is in your best interest, I will advise patience.
My job is to help you keep your property and get back on your feet, and I am very passionate about it.
A creditor has a judgment against me. what can chapter 7 bankruptcy do about it?
Has a creditor obtained a judgment against you for credit card debt, a repossessed vehicle, or a foreclosed home? Chapter 7 bankruptcy can normally eliminate these judgments and remove their associated liens.
These judgments have the potential to be incredibly damaging and long-lasting. Creditors commonly freeze bank accounts, which can mean lost paychecks if you have direct deposit. My initial advice to anyone facing a credit card lawsuit who is unable to file a bankruptcy is to immediately stop direct deposits and empty all bank accounts. A creditor lawsuit judgment can also result in a lien being placed on your home (or a future home!) or your car. Any future sale of this property would require full payment of the lien, which could grow enormous in the intervening years with additional interest, fees, and attorney costs.
Worst of all, the creditor with a judgment against you has the ability to seize your car or home and sell it from underneath you to collect on the judgment. While this cannot happen without you first receiving notice, it is a real danger. These lawsuits are potentially very serious, but fortunately they can be eliminated through bankruptcy.
In Pennsylvania, creditors have twenty (20) years in order to execute on a judgment (42 Pa. C.S. 5529). While the threat caused by these judgment liens may not be pressing at the moment, it is likely that you will own property at some point in the next 20 years that needs protected.
As your bankruptcy attorney, I will notify the law firm suing you of your bankruptcy filing, which will immediately end their ability to execute on the lawsuit, contact you, or harass you. At no point in the future will the creditor be able to collect on a debt discharged in bankruptcy, even if they had obtained a judgment. I will file a Suggestion of Bankruptcy in the Allegheny Court of Common Pleas and a Motion to Avoid Judicial Lien with the Federal Bankruptcy Court (when your property has a lien). This provides notice to the Court that a bankruptcy has been filed, and that the judgment is voided pursuant to United States law. These judgments will never be a problem again.
Filing Chapter 7 bankruptcy can protect your property by permanently removing these judgments from your record, allowing you to rebuild your credit and plan for your future.
What is a "No-asset" Bankruptcy
Most Chapter 7 bankruptcies are referred to a "no-asset" cases, so you may come across this term while researching bankruptcy. This does not literally mean you have zero assets. It simply means all the assets you do have are protected by the available bankruptcy exemptions.
As discussed above, bankruptcy exemptions allow you to protect your interest in your real estate and personal property. Once protected using the bankruptcy exemptions, your property cannot be touched by creditors. When all of your assets are protected, your filing becomes a "no-asset" bankruptcy.
In some cases, a bankruptcy debtor will have a small amount of non-exempt assets at the filing of the case. If the amount is less than is worthwhile for the trustee to administer, the case may be deemed a "no asset" case. An experienced Pittsburgh bankruptcy attorney can help you determine how the trustee is likely to act in these situations.
When the Chapter 7 bankruptcy trustee determines your bankruptcy is a "no-asset" case, the process becomes greatly simplified because the trustee and all of your unsecured creditors will acknowledge you have no property that can be used to pay your unsecured debts. The Chapter 7 discharge is generally routine at this point.