Over the years, consumer bankruptcy has been used as a tool by millions upon millions of Americans who are seeking relief from debts and creditors they are unable to pay. Statistics compiled by the United States Bankruptcy Courts report that in 2013 alone, there were a total of 1,071,932 bankruptcy filings across the country. The same year, there were 27,126 bankruptcy filings throughout Pennsylvania, and 1,005 bankruptcies filed in Lehigh County. This means that in 2013, bankruptcies filed in Lehigh County represented 3.7% of all bankruptcies in the state of Pennsylvania.
The statistics illustrate that consumer bankruptcy is fairly widespread in Lehigh County, including the community of Allentown. With a large population of just under 119,000, many Allentown residents file for Chapter 7 or Chapter 13 bankruptcy on an annual basis.
If you are thinking about filing for bankruptcy in Allentown, you shouldn’t begin this challenging and sometimes confusing process without the guidance of a qualified attorney. At the law offices of Young, Marr & Associates, our seasoned lawyers have over 20 years of experience handling all types of consumer bankruptcy cases, including Chapter 7 and Chapter 13. In our decades of practicing bankruptcy litigation, our bankruptcy law firm has represented over 5,000 clients across Pennsylvania, Lehigh County, and Allentown.
Why Do I Need a Bankruptcy Attorney?
Before you embark on the process of obtaining a bankruptcy discharge, it is very important that you retain the services of an Allentown, Pennsylvania bankruptcy attorney. But why? Why not simply handle your bankruptcy by yourself?
To begin with, bankruptcy law has a reputation for being exceptionally technical and convoluted. Debtors must interpret and strictly adhere to not only the U.S. Bankruptcy Code, but also the Pennsylvania bankruptcy legislature, as well as the regulations enforced by the court which hears their case. These multiple systems of legislature are prone to changing, and to conflicting with one another.
In many cases, where the federal and Pennsylvania bankruptcy rules and allowances are divergent, it is not necessarily obvious which is more advantageous or appropriate for the debtor. To use a common example, a debtor may be unsure as to whether they should file in accordance with the exemptions allowed by Pennsylvania, or the exemptions allowed by the federal government.
Additionally, if a debtor makes an error at any point during the bankruptcy process — which in some cases, can last for as long as five years — their entire case could be hurt, or at worst, even dismissed. Common examples of mistakes made by debtors who file without an attorney (known as filing pro se) including forgetting to list a creditor, incorrectly filling out bankruptcy documentation, and missing deadlines.
The United States Federal Bankruptcy Courts strongly caution debtors against filing on a pro se basis, making statements such as:
“While individuals can file a bankruptcy case without an attorney or ‘pro se,’ it is extremely difficult to do it successfully. […] The rules are very technical, and a misstep may affect a debtor’s rights. […] Bankruptcy has long-term financial and legal consequences — hiring a competent attorney is strongly recommended.“
Many people who are considering bankruptcy hesitate to hire a lawyer, because they are worried about the costs of legal representation. At Young, Marr & Associates, we are sensitive to our bankruptcy clients’ financial concerns. We offer affordable representation with flexible options for payment.
Which Type of Bankruptcy Should I File For?
Bankruptcy is not one-size-fits-all. Instead, there are different types of bankruptcy. These unique categories of bankruptcy are called Chapters. For example, it is relatively common to hear about businesses filing for Chapter 11.
In consumer bankruptcy, there are two main Chapter categories:
- Chapter 7 bankruptcy
- Chapter 13 bankruptcy
While the majority of consumer bankruptcies fall into the Chapter 7 category, Chapter 13 bankruptcies also make up a significant portion. But what are the differences between these two Chapters, and which type of bankruptcy should you file for?
It isn’t completely a matter of choice. The type of bankruptcy you should file for is largely determined by something called the Means Test. The Means Test is essentially a calculator which measures financial variables like median household income to determine whether Chapter 7 or Chapter 13 is a better fit for a given debtor. However, there are some cases in which an individual who qualifies for Chapter 7 may want and be able to file under Chapter 13. An experienced Allentown, Pennsylvania bankruptcy lawyer can advise you about the pros and cons.
Chapter 7 bankruptcy is a fast-moving process which is often completed in four to six months. Chapter 7 is also called liquidation, because some debtor assets may be sold off to creditors as a way to help cover their debts. However, many debts can be erased in Chapter 7, including medical bills, credit card bills, and utility bills. Chapter 7 bankruptcy is based on financial need.
Chapter 13 bankruptcy is a much more gradual process, typically taking three to five years for completion. Chapter 13 is also called reorganization, because Chapter 13 features a reorganization or repayment plan with creditors. Making these repayments helps debtors hold on to their assets and possessions. Like Chapter 7, Chapter 13 bankruptcy discharges many major categories of debt.
If you would like to speak with an Allentown, Pennsylvania bankruptcy attorney about what bankruptcy can do for you, call the law offices of Young, Marr & Associates today at (609) 755 3115 in New Jersey or (215) 701 6519 in Pennsylvania to schedule a free legal consultation. You can also contact us online.