601 N. 3rd Street
Reading, PA 19601
Phone: (484) 648-1236 Fax: (484) 335-9908
Email: Info@AODLawFirm.com
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Bankruptcy
General Information:
One of the reasons people file bankruptcy is to get a "discharge." A discharge is a Court order which states that you do not have to pay most of your debts. A debtor cannot obtain a discharge in a Chapter 7 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past 8 years, or (b) a Chapter 13 case filed within the past 6 years. A debtor cannot obtain a discharge in a Chapter 13 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past 4 years, or (b) a Chapter 13 case filed within the past 2 years. Some debts cannot be discharged. For example, you cannot discharge debts for....
- most taxes;
- child support;
- alimony;
- most student loans;
- Court fines and criminal restitution; and
- personal injury caused by driving drunk or under the influence of drugs.
The discharge only applies to debts that arose before the date you filed.
Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lienon your car). You do not have to pay a secured claim if the debt is discharged, but the creditor can still take the property, by repossession or foreclosure if you do not pay the loan.
“We are a debt relief agency. We help people file for relief under the Bankruptcy Code.”
Under Chapter 7, many of your debts are completely discharged. This type of bankruptcy is usually appropriate for people who have a lot of credit card debt and/or medical bills or other unsecured debts. The debtor normally receives a discharge just a few months after the petition is filed. However, amendments to the Bankruptcy Code enacted in 2005 require the application of a "means test" to determine whether individual consumer debtors qualify for relief under chapter 7. If such a debtor's income is in excess of certain thresholds, particularly the median income for your household size, the debtor may not be eligible for chapter 7 relief. If have a large amount of equity in your home or own substantial other valuable assets besides normal household items, then you may not be eligible for Chapter 7 either. If you do not qualify for a Chapter 7 bankruptcy, you may be required to file under Chapter 13, discussed below.
Chapter 13:
Under Chapter 13, a debt repayment plan is set up through the bankruptcy court. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a "plan" to repay creditors over time – usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief under the means test. In basic terms, this involves figuring out how much money you can afford to pay to your creditors and then actually paying that amount to the Chapter 13 Trustee's office for the life of your plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The actual amount of your plan payment and the length of your re-payment plan will be calculated by our office after discussions with you.
All content contained on this website is for informational purposes only and should not be considered legal advice.
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