Bankruptcy in Pennsylvania is a legal process through which some of the debts of an individual or a business are absolved (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult procedure. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good Pennsylvania bankruptcy lawyer can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your particular case.
Types of Bankruptcy in Pennsylvania
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in Pennsylvania will be the same as everywhere else in the United States. There are 2 basic forms of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy usually used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
In Pennsylvania, Chapter 7 bankruptcy is referred to as "liquidation." The court will conduct an accounting of all of the debtor's assets, and determine which ones should be sold to help pay off the debts. Many classes of property, such as homes and cars, are exempt from this requirement, and therefore don't have to be sold. Once all of the eligible property is sold off, and the proceeds given to the creditors, the rest of the debt is excused. When Chapter 13 bankrutpcy is filed, the debt is reorganized instead of excused. Essentially, the court, the debtor, and the creditors will work out a repayment plan that the debtor can manage, and will result in most of the debt being paid off, hopefully in a reasonable period of time.
Usually, Chapter 11 bankruptcy is used by businesses as opposed to individuals. Much like Chapter 13, Chapter 11 involves the reorganization, as opposed to discharge, of a debtor's obligations. However, it is up the to the debtor to come up with a repayment plan, and once this happens, the plan is submitted to the participating creditors, who must approve it by majority vote.
How Can a Pennsylvania Bankruptcy Lawyer Help?
Because bankruptcy is a huge financial and life decision, it is not one to be made without as much information as possible. A Pennsylvania bankruptcy attorney can help give you this information, and advise you as to whether or not bankruptcy is a prudent course of action, given your individual situation.
Interesting Facts About Pennsylvania
Pennsylvania is one of America's oldest states, being only the second state to join the Union. Formally known as The Commonwealth of Pennsylvania, the area was settled as early as the 1630's. With 253 members in its legislature, Pennsylvania has the second largest legislature in the nation. Pennsylvania is named after its founder, William Penn.
Education has always been a focal point of Pennsylvania life. The state is home to a large number of nationally recognized universities. Some of these have law schools associated with them, such as the law schools at Penn State University, Temple University, and the University of Pittsburgh. A significant number of Pennsylvania Supreme Court cases have also involved education, including Abington v. Shempp (1963) and Lemon v. Kurtzman (1971).
Pennsylvania's court system is called the "Unified Judicial System of Pennsylvania". At the basic level are the Courts of Common Pleas, which are organized into 60 different judicial districts. Appeals are heard either at the Superior Court or at the Commonwealth Court. The Pennsylvania state Supreme Court also hears appeals and other matters of a more complex nature. There are also minor municipal courts with limited jurisdiction beneath the Courts of Common Pleas.
Pennsylvania lawyers are skilled at handling legal claims of all types. Lawyers in Pennsylvania participate in continuing legal education and various programs in order to refine their skills. An experienced Pennsylvania attorney can assist you with any legal disputes or inquiries you might have.