Bankruptcy Law

Bankruptcy Law Pittsburgh, PA

Bankruptcy LawBankruptcy is an extremely complex subject. It is almost always necessary to involve an attorney. If someone has more debt than he or she can possibly pay, they may file for bankruptcy in Federal Bankruptcy Court.

Chapter 7 Bankruptcy is the most common form of bankruptcy. The person filing is known as the debtor. The debtor’s non-exempt property is sold at a court administered sale. Proceeds will be distributed to the creditors. A discharge follows, which signifies that the debtor is free from payment of debts.

Chapter 13 Bankruptcy lets the debtor pay off debts under installment plans administered by a trustee. This is advantageous in the case of secured property like a house, where the debt is the mortgage. Time is gained to pay off the debt, and in some cases the debt may be reduced. Chapter 13 protection usually lasts three to five years. Cosigners may also be protected.

Exempt property in Pennsylvania includes $300 for an individual and $600 for a married couple, filing jointly. Clothing, certain insurance payments, compensation and disability payments are exempt. The majority of Pennsylvanians choose the federal exemptions which are:

  • $17,425 in primary residence, $2,775 motor vehicle, $1,150 in jewelry,
    $9,300 household furnishings.
  • Unused amount of residence exemption up to $8,725. $925 additional
  • Social Security, unemployment compensation, welfare, disability, support select pension benefits, veteran’s administration.

Amounts are doubled if wife and husband file jointly (regarding equity in real or personal property, unless property secures a loan). In that case exemptions may be effected. This whole area can best be analyzed in each particular case by an attorney.

A debtor may acquire property after bankruptcy, but here again legal advice is helpful. Bankruptcy appears on a credit record for ten years. Subjects like a creditor’s ability to prevent a discharge and debtor’s timeline for filing again (chapter 7 – 6 years), and subsequent filing of a chapter 7 after having filed a chapter 13, are best discussed with an attorney.

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