Do I Qualify For Bankruptcy?
While only an experienced bankruptcy attorney can determine with finality whether you qualify for a bankruptcy, this page is intended as a primer for individuals who are considering bankruptcy. The following review is a collection of common issues that prevent individuals from filing bankruptcy (but once again, only an experienced bankruptcy attorney can tell you for sure!)
Contact us to schedule a free consultation and see if bankruptcy is an option for you. Even if you don't currently qualify for bankruptcy, we can determine when you will, and give you a plan to become "creditor-proof" until that day. We can also discuss alternatives to bankruptcy.
The following questions should serve as a preliminary guide in determining if you eligible to file a bankruptcy.
Have you lived in Pennsylvania for at least Ninety-ONe (91) Days?
If the answer is "no", you will not be able to file in Pennsylvania until 91 days after you established residency. Otherwise, you would be required to file in your previous state. Contact an experienced bankruptcy attorney to determine your ideal state for filing (each state has different exemption laws).
have you recently transferred any property to someone else?
You may be prohibited from filing a bankruptcy if you have recently transferred property to another person for less than its true value, or to a family member or business insider, or into a trust.
The bankruptcy Trustee will ask if you transferred any property (including money) to a family member in the last year. The Trustee will also ask if you have transferred any property into a trust within 10 (ten) years before filing.
Your attorney will closely review any transfers you have made to determine if it will impact your ability to file bankruptcy.
HAVE YOU EVER FILED A BANKRUPTCY?
If the answer is "yes", you may be prohibited from filing another bankruptcy until certain deadlines have passed.
If you previously filed a Chapter 7 bankruptcy and received a discharge, you cannot file...
- another Chapter 7 bankruptcy for eight years from the date your previous Chapter 7 bankruptcy was filed.
- a Chapter 13 (AND receive a discharge of your debts) until four years from the date of your previous Chapter 7 filing. A Chapter 13 can technically be filed immediately after a Chapter 7 discharge, but you would not be eligible for a second full discharge until four years after the Chapter 7 was filed.
If you previously filed a Chapter 13 bankruptcy and received a discharge, you cannot file...
- another Chapter 13 bankruptcy (and still be eligible for a discharge) for two years after the date the previous Chapter 13 is FILED. (This rarely a problem.)
- a Chapter 7 bankruptcy for four years after the date the previous Chapter 13 was filed.
NOTE: In some instances, a new bankruptcy can be filed immediately after a previous Chapter 13 if the previous filing paid all unsecured creditors in full, or unsecured creditors were paid 70% and the plan was filed in good faith.
Do you exceed the debt limits in a Chapter 13 bankruptcy?
Chapter 13 bankruptcy has a debt limit of $383,175 for unsecured debt (such as credit cards, medical bills, etc.) and $1,149,525 for secured debt (such as mortgages and car payments). This is rarely an issue for most debtors. NOTE: these limits will be adjusted on April 1st, 2016.
Chapter 7 bankruptcy has NO debt limit.