Lehighton & Carbon County Consumer Bankruptcy Attorney
In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), which established a means test in order to determine if a consumer debtor may qualify for a chapter 7 bankruptcy or have to undertake a chapter 13 repayment plan to creditors. The means test looks at your average of the past six months worth of income as it relates to the medium family income in the Commonwealth of Pennsylvania of a similar household size. BAPCPA also established two mandatory credit counseling classes to be completed by consumers debtors before and after they file a petition for bankruptcy relief.
Most consumers file for relief under either Chapter 7 or Chapter 13 of the Bankruptcy Code. Once you file your bankruptcy petition, a trustee is appointed to review your case.
If you qualify for a Chapter 7, you may obtain your discharge of your pre-petition debts within four-five months after your petition is filed with the Bankruptcy Court. A Chapter 7 is commonly referred to as a liquidation case because the Trustee has the ability to liquidate the non-exempt property, if any, and uses the proceeds to distribute to your creditors under the priority structure of the Bankruptcy Code to your creditors. You may elect to claim certain property as exempt from the reach of creditors under Pennsylvania law or Federal bankruptcy law. Most debtors do not lose any assets when they file a Chapter 7 petition because their exemptions cover their equity in their property. Contact our experienced Lehighton & Carbon County consumer bankruptcy attorney today to learn more.
Under Chapter 13, unlike Chapter 7, you may keep all of your non-exempt property as long as you continue to make payments under your plan. In a Chapter 13 case, you must file a repayment plan with the Bankruptcy Court to repay your creditors all or part of the money that you owe them, using your future earnings and/or by the sale or disposition of certain real or personal property to pay a base plan figure established by the Bankruptcy Code to receive your discharge. This base figure of what you must repay your creditors is normally calculated under the means test as well of an analysis of any non-exempt property you may have. Your repayment plan is normally three to five years. Moreover, you can pay back any past due arrears that you owe a secured creditor, such as your mortgage or auto lender. If you purchased your vehicle more than 910 days ago, then you may be able to cram down the car loan to its present fair market at a lower interest rate inside a repayment plan.
A Chapter 13 case is commonly filed to take a house out of a mortgage foreclosure proceeding to pay back the mortgage arrears in monthly installments as opposed to paying it in one lump sum. Chapter 13 also enables a Debtor to strip off (treat as a dischargeable unsecured debt) a 2nd or 3rd mortgage if your residence has a present fair market value lower than the principal of your 1st mortgage.
Contact An Experienced Lehighton & Carbon County Consumer Bankruptcy Attorney Today
Attorney Weaver has experience in consumer bankruptcy cases to help guide you in the best direction to solve your financial difficulties and explore all options available to you, which may or may not involve filing a bankruptcy petition. Attorney Weaver will ensure that you are aware of federal bankruptcy law’s requirements in order to obtain your discharge order and which bankruptcy chapter you qualify under.
Attorney Weaver’s bankruptcy practice includes serving clients in Carbon County, Schuylkill County, Monroe County, Luzerne County, Pike County, Lehigh County, Northampton County, and Berks County.