Bankruptcy is a legal process allowing an individual or business to have some or all of their debt absolved. It is almost always considered as a last resort because it can have some negative long-term consequences which must be considered, even if you eventually decide that they are outweighed by the benefits. Bankruptcy is controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Pennsylvania are often the identical as everywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Edinboro, Pennsylvania bankruptcy Attorney beforehand.

Chapter 7 Bankruptcy in Edinboro, Pennsylvania

There are 2 main forms of bankruptcy in Edinboro, Pennsylvania. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is absolved. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, basic personal items, and retirement accounts.

Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is absolved. But some forms of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Edinboro, Pennsylvania debts are not dischargeable, you may want to consider options other than bankruptcy.

Chapter 13 Bankruptcy in Edinboro, Pennsylvania

Chapter 13 bankruptcy in Edinboro, Pennsylvania is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 Bankruptcy involves a court setting up an altered payment plan, which allows the debtor to pay off most or all of his debts over a prolonged period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.

Which Type of Consumer Bankruptcy Should I File in Edinboro, Pennsylvania

This depends entirely on the facts of your individual case. If you have a decent amount of stable income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 may be the best option for you. If most of your property is exempt, and you don't have much stable income, Chapter 7 might be the best option.

Regardless of your situation, you should speak with an attorney in Edinboro, Pennsylvania who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely outcomes of each one, allowing you to make a much more informed decision.