Bankruptcy is a legal process allowing an individual or business to have some or all of their debt discharged. 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 Bradford, Pennsylvania bankruptcy attorney beforehand.

Chapter 7 Bankruptcy in Bradford, Pennsylvania

There are 2 common forms of bankruptcy in Bradford, Pennsylvania. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 liquidates part of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many forms of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and essential personal items, like clothing. These assets are not available to creditors.

Once eligible assets are sold, and the money turned over to the creditors, most remaining debt is discharged. However, there are certain types of debt that cannot be discharged in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Bradford, Pennsylvania.

Chapter 13 Bankruptcy in Bradford, Pennsylvania

Chapter 13 bankruptcy in Bradford, Pennsylvania is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your particular case. Chapter 13 does not eliminate any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.

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

This depends entirely on the facts of your particular 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 Bradford, Pennsylvania who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely consequences of each one, allowing you to make a much more informed decision.