If you are dealing with overwhelming debt, it can easily be all that you can think about. You may feel helpless and unable to take any measures to better your situation. Many people avoid filing for bankruptcy, assuming they must give up their prized possessions. This is rarely the case, with most people who file for bankruptcy keeping their home and car, all while gaining a fresh start.

At Mette Law, our bankruptcy lawyers in York, PA, have assisted hardworking individuals like yourself in successfully climbing out of debt. If you want to learn more about our services, do not hesitate to contact our York firm today.

Different Types of Bankruptcy in York, PA

If you are an individual who needs help managing your debt, you may consider filing for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is reserved for lower-earning individuals, requiring your income over the past six months to be lower than the state’s median income (known as the “means test”). In filing Chapter 7, you can wipe out dischargeable debts, such as credit cards, medical bills, and personal loans, using these funds to pay off your creditors. If you are current on your mortgage and car payments, you can likely keep these possessions.

In contrast, Chapter 13 bankruptcy is intended for individuals who earn a regular income but want to restructure their debt to pay it off faster. People disqualified from filing for Chapter 7 (i.e., being above the state median income) should consider filing for Chapter 13. However, Chapter 13 has a debt threshold, which is adjusted every three years, so you will want to check to ensure that your total debt does not exceed these limits before applying.

Chapter 13 allows you to formulate a repayment plan, stipulating the fixed payments you agree to make to your Chapter 13 trustee (an appointed party overseeing your case), who will then pay your creditors. The repayment plan is contingent on court approval. Most debtors who undergo Chapter 13 typically repay their debt in three to five years. No matter your financial situation, our skilled bankruptcy lawyers will help you from beginning to end.

For Businesses

Businesses have the option of filing under Chapter 7 or Chapter 11 bankruptcy. While Chapter 7 liquidates debts to pay creditors, Chapter 11 allows a business to restructure its debt. Most companies that filed for Chapter 7 bankruptcy close, unable to continue operating once they sell off their assets. Typically, corporations elect to file Chapter 11, allowing them to stay in business while financially getting back on their feet.

Is Your Home Automatically Protected Under Bankruptcy?

No matter what chapter you are filing under, bankruptcy triggers an automatic stay. An automatic stay is an injunction that stops creditors from collecting money (debt collections and wage garnishments) or seizing property (foreclosure). It is initiated when the debtor files the bankruptcy petition. However, creditors can file for relief from the automatic stay, lifting the stay in certain circumstances.

Informing You of the Financial Options

Retaining counsel is key to understanding your options. A York bankruptcy attorney can inform you if your financial situation meets the criteria for an automatic stay. Even if you do not qualify, there are other ways in which you can protect your home.

If you are filing for bankruptcy in Pennsylvania, you will likely use the federal exemptions, allowing you to keep a certain amount of equity in your home. This amount will be protected from creditors, with most people choosing to use the higher federal limits to safeguard more of their property.

Speak with a Bankruptcy Lawyer in York Today

While filing for bankruptcy without hiring counsel is possible, it is strongly discouraged. Bankruptcy is an intricate process requiring certain forms to be completed accurately and remitted by specific deadlines. Given the nuances of the process, you are advised to seek legal guidance to navigate the complex nature of the legal landscape. If you are considering bankruptcy, the Mette Law legal team would like to hear from you. To schedule a consultation with one of our York bankruptcy attorneys, contact us online or by phone at (717) 232-5000 today.