Bankruptcy is a legal process allowing an individual or business to have some or all of their debt excused. 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 ultimately decide that they are outweighed by the benefits. Bankruptcy is governed by federal law, and proceeds in federal courts. So, the procedure for filing for bankruptcy in Pennsylvania will be very similar to the procedure anywhere else in the U.S. However, individual bankruptcy courts have different rules for exemptions, so it might be a good idea to consult with a local attorney in Hummelstown, Pennsylvania before filing.
Chapter 7 Bankruptcy in Hummelstown, Pennsylvania
There are 2 typical types of consumer bankruptcies in Hummelstown, Pennsylvania: 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 excused. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.
Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is absolved. However, some types of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Hummelstown, Pennsylvania is not dischargeable, you might want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Hummelstown, Pennsylvania
In Hummelstown, Pennsylvania, Chapter 13 is substantially different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your specific situation. Chapter 13 Bankruptcy involves a court setting up an adjusted payment plan, which allows the debtor to pay off most or all of his debts over an extended 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 Hummelstown, Pennsylvania
The answer to this question depends heavily on your distinct situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.
Whatever your situation, you should speak with a local Hummelstown, Pennsylvania bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely results, which will help you make a more educated decision.