Philadelphia Bankruptcy Attorney
Top Bankruptcy Attorneys and Home Foreclosure Defense Attorneys.
Over 750 ★★★★★ Google Reviews
Contact Our Attorneys Today
EVALUATION
At Sadek Bankruptcy Law Offices, we realize that every situation is different. Our debt relief lawyers will take the time to learn about your situation and your goals. Our objective is to explain your legal options and offer the best debt relief strategy for you in the most compassionate and friendly manner possible. Call 24/7 to schedule your meeting with a lawyer.
AVAILABLE
Our office understands the financial stress our clients endure. Therefore, in addition to reasonable legal fees, we offer a payment plan to all of our valued clients to make quality legal services most affordable.
AND NJ
In addition to our primary law office in Center City, Philadelphia, we also have law offices throughout the Greater Philadelphia, Pennsylvania Area and in New Jersey. Our branch offices have contributed to making us the #1 Bankruptcy Filer and debt relief firm in the Greater Philadelphia area. Our goal is to have a convenient location within 20 minutes of where our clients work or reside.
Philadelphia Bankruptcy Lawyers
Sadek Bankruptcy Law Offices in Philadelphia is an expert in representing the legal needs of our clients and their businesses from our offices in Center City Philadelphia, Northeast Philadelphia, Delaware County, and Bucks County, Pennsylvania. When you work with a Philadelphia bankruptcy lawyer from our firm, you can rest assured that you’ll receive only the best legal representation for your case.
To schedule a free consultation with us, please call our office at 215-545-0008 today.
What Is Bankruptcy?
Bankruptcy is a legal process that individuals or businesses may go through when they are unable to repay their debts. It is designed to provide relief to debtors by either restructuring their debts or liquidating assets to repay creditors.
The process can be extremely beneficial for debtors looking to achieve financial freedom, but it can be confusing for those who have never encountered it before. Working with a skilled Philadelphia bankruptcy attorney is crucial to ensure your case goes as smoothly as possible.
Bankruptcy vs Debt Relief
Bankruptcy and debt relief are both methods aimed at addressing overwhelming debt, but they differ significantly in their approach, consequences, and impact on an individual’s financial status.
Bankruptcy is a legal procedure that involves the court system. It provides a way for individuals or businesses to either eliminate their debts or reorganize them under court supervision. Debt relief services refer to various strategies that are used to make debt more manageable without going through legal proceedings. Two common forms of debt relief are debt settlement and debt consolidation.
Debt settlement involves negotiating with creditors to allow the debtor to pay a lump sum that is less than the total amount owed to fully settle the debt. This can be beneficial if the debtor can afford to pay a significant portion of their debts at once. However, debt settlement can also negatively affect credit scores, and not all creditors may agree to negotiate the settlement terms.
Debt consolidation is the process of combining multiple debts into a single debt, typically with a lower interest rate or more favorable terms. This often involves taking out a new loan to pay off other debts, thereby simplifying monthly payments and often reducing the amount of interest paid over time. Debt consolidation is generally less damaging to one’s credit score than either bankruptcy or debt settlement and can be a proactive way to manage debt before reaching financial distress.
Types of Bankruptcy We Handle
Bankruptcy is designed to help individuals and businesses deal with overwhelming debt under the protection of the legal system. In Pennsylvania and New Jersey, the most commonly utilized forms are Chapter 7 and Chapter 13 bankruptcy, each serving different needs and providing different forms of relief. At our bankruptcy law firm in Philadelphia, these are by far the two most common forms of bankruptcy we handle.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy, also known as liquidation bankruptcy, allows individuals to wipe out most of their unsecured debts, such as credit card debt and medical bills, through a liquidation process. In this process, a trustee is appointed to sell the debtor’s non-exempt property and distribute the proceeds to creditors. Not all assets are sold; debtors are allowed to keep exempt property, which typically includes basics such as clothing, household furnishings, and a personal vehicle of modest value.
Chapter 7 is suited for individuals who do not have a significant regular income and cannot afford to pay back their debts. This type of bankruptcy can be completed relatively quickly, usually in a few months. Still, it remains on the individual’s credit report for 10 years and can severely impact their ability to obtain future credit. Working closely with a Philadelphia bankruptcy attorney is crucial to ensure your case goes smoothly.
Chapter 7 Bankruptcy Income Limits in Philadelphia
If you want to file Chapter 7 bankruptcy, you’ll have to take something called a Means Test. This test determines whether you are eligible to file Chapter 7 under the Bankruptcy Code. If you “pass” the means test, you can file Chapter 7.
In order to pass the means test, you must make less than or equal to the median income for the state of Pennsylvania. According to 2022 data from the Census Bureau, the median income for one earner in Pennsylvania is $60,640. Therefore, if you make $60,640 or less, you should qualify to file Chapter 7 in Pennsylvania.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy, known as reorganization bankruptcy, is geared towards individuals who have a regular income and can pay back at least a portion of their debts through a structured repayment plan. In Chapter 13, debtors propose a repayment plan to make installments to creditors over three to five years.
During this period, debtors can keep their property, including non-exempt assets that might otherwise be lost in a Chapter 7 case. This type of bankruptcy benefits those who may be behind on mortgage payments or car loans and wish to catch up on those payments and retain their property. Chapter 13 bankruptcy stays on the credit report for 7 years, which is slightly less impactful than Chapter 7.
Bankruptcy Chapter 7 vs 13
Chapter 7 and Chapter 13 bankruptcy serve different financial needs and offer distinct paths for debt relief. Chapter 7 bankruptcy, known as liquidation bankruptcy, is suited for individuals who lack the financial means to pay back debts, allowing them to discharge most unsecured debts quickly by liquidating non-exempt assets.
On the other hand, Chapter 13 bankruptcy, or reorganization bankruptcy, is designed for individuals with a regular income who can repay creditors over time through a court-approved repayment plan. This option allows debtors to keep their assets, including those that could be lost under Chapter 7 and is particularly beneficial for those looking to avoid foreclosure on their home or repossession of other valuable assets.
While Chapter 7 typically has a quicker resolution and a longer impact on credit history (10 years), Chapter 13 generally spans three to five years but remains on credit reports for a shorter period (7 years).
How Much Debt Is Worth Filing Bankruptcy?
There is no specific amount of debt that makes someone eligible or suitable for bankruptcy; instead, the decision to file depends on various personal circumstances and financial obligations. The appropriateness of filing for bankruptcy often revolves around the debtor’s ability to repay their debts outside of bankruptcy, their income, the types of debts owed, and the potential impact on their future financial situation.
How to File Bankruptcy in Philadelphia
Before deciding to file for bankruptcy, evaluate your financial situation. This includes reviewing your debts, assets, income, and expenses. Consider consulting with a financial advisor or a bankruptcy attorney to determine if bankruptcy is the best option given your circumstances.
Under U.S. bankruptcy law, individuals must complete credit counseling from an approved agency within 180 days before filing bankruptcy. This session can help you understand your financial situation better, explore alternatives to bankruptcy, and fulfill a legal requirement.
Decide whether Chapter 7 or Chapter 13 bankruptcy is right for you based on your financial assessment and goals. Chapter 7 is generally quicker and involves liquidating your assets to pay off debts, while Chapter 13 involves making a plan to repay debts over time.
Filing for bankruptcy starts with submitting a bankruptcy petition and several other forms to the bankruptcy court. These forms, known as schedules, include detailed information about your financial status—debts, assets, income, recent transactions, and monthly living expenses. Filing these forms initiates your bankruptcy case.
What Happens When You File for Bankruptcy?
Once you file the bankruptcy petition, an automatic stay immediately goes into effect. This prevents creditors from making direct contact with you or staking a claim on your property during the bankruptcy process.
The court will appoint a trustee to oversee your case. You’ll need to attend a meeting of creditors (341 meeting) where creditors can ask questions about your finances and bankruptcy forms under oath.
For Chapter 7, you may need to liquidate certain assets through the trustee. For Chapter 13, you’ll need to start making payments according to your repayment plan. Both types may require additional documents or financial management courses.
In Chapter 7, the discharge of debts typically occurs a few months after filing. In Chapter 13, discharge occurs after the completion of all plan payments, which can take between three to five years.
Is Bankruptcy Public Record in Philadelphia?
Yes, bankruptcy filings are public record. This means that the details of a bankruptcy case are accessible to the public and can be viewed through the court system.
While the records are public, accessing them usually requires specific actions, such as searching the PACER database or other legal databases, which might involve fees. Despite the public nature of bankruptcy filings, in practice, it is not typically information that is widely or easily accessed by the general public without specific reason or interest.
Does Bankruptcy Clear All Debt?
Bankruptcy can provide significant relief from debt, but it does not clear all types of debt. The types of debt that can be discharged—or wiped out—vary between different bankruptcy chapters and depend on specific regulations.
In Chapter 7 bankruptcy, the following types of debts are dischargeable.
- Credit card debt
- Personal loans from non-governmental sources
- Medical bills
- Past-due utility bills
- Business debts
- Older tax liabilities
In contrast, the following types of debts cannot be discharged through bankruptcy.
- Student loans (You cannot discharge student loan debt except in rare cases of undue hardship.)
- Recent tax debts
- Child support and alimony obligations
- Debts from personal injury caused while driving under the influence of alcohol or drugs
- Fines and penalties for violations of law
Chapter 13 works differently, as it involves a repayment plan over three to five years. After completing the payment plan, many remaining unsecured debts can be discharged. However, the same types of non-dischargeable debts listed under Chapter 7 typically still apply.
Secured Debt vs Unsecured Debt
Secured and unsecured debt differ primarily in the presence of collateral. Secured debt is backed by an asset, known as collateral, which the lender can seize if the borrower defaults on the loan. Common examples of secured debts include mortgages and car loans, where the house or vehicle itself serves as collateral.
Unsecured debt is not backed by any collateral. If the borrower fails to make payments, the lender has no immediate right to seize any assets directly. Instead, the lender may have to pursue legal action to collect the debt. Credit card debt, personal loans, and medical bills are typical examples of unsecured debt. The main risk for lenders with unsecured debt is that it often represents a higher risk, which is why interest rates may be higher than secured debt.
How Long Does It Take to File Bankruptcy?
The process of filing Chapter 7 bankruptcy typically takes about four to six months from the time of filing to the discharge of debts. However, the initial preparation, including gathering financial documents and completing required credit counseling, may take a few weeks. Once the petition is filed with the bankruptcy court, an automatic stay goes into effect immediately, halting most collection actions by creditors.
Filing Chapter 13 bankruptcy involves proposing a repayment plan to the court, which typically takes more time than Chapter 7. The preparation and filing of the petition may take a similar amount of time as Chapter 7, but the repayment plan can extend the process significantly. The repayment plan typically lasts three to five years, during which the debtor makes regular payments to creditors.
Should I File Bankruptcy?
Ultimately, the decision to file for bankruptcy is highly personal and should be based on a careful evaluation of your financial circumstances, goals, and priorities. Consulting with a qualified bankruptcy attorney can help you understand your options, navigate the complexities of the bankruptcy process, and make an informed decision about whether bankruptcy is the right choice for you.
For example, if you have an unmanageable amount of medical debt due to an accident or emergency that is greatly affecting your personal finances, bankruptcy can help. We strongly recommend speaking with an attorney about your situation to determine the best course of action.
When to File Bankruptcy in Philadelphia
Deciding when to file for bankruptcy is a significant financial decision that should be made carefully and thoughtfully. While each individual’s circumstances are unique, there are some common signs that may indicate it’s time to consider bankruptcy.
- Overwhelming debt: If you find yourself struggling to make minimum payments on your debts, borrowing from one source to pay another, or constantly being harassed by creditors or debt collectors, it may be a sign that your debt has become unmanageable.
- Threat of legal action: If you’re facing lawsuits, wage garnishment, foreclosure, or repossession of assets due to unpaid debts, bankruptcy can provide immediate relief by putting a stop to these actions through an automatic stay.
- Exhaustion of alternatives: If you’ve explored other options for managing your debt, such as debt consolidation, negotiation, or credit counseling, and they haven’t provided sufficient relief, bankruptcy may be the next logical step.
- Impact on quality of life: Financial stress can take a toll on your mental and physical health, as well as your relationships. Maybe your debt is causing significant emotional distress, affecting your ability to sleep or concentrate, or straining your relationships with loved ones. In that case, it may be time to consider bankruptcy as a means of getting a fresh start.
- Future financial outlook: Consider your long-term financial prospects. If your current financial situation is unlikely to improve significantly in the foreseeable future, filing for bankruptcy sooner rather than later can help you start rebuilding your financial life sooner.
Philadelphia Bankruptcy FAQs
How Much Does It Cost to File Bankruptcy in Philadelphia?
Not including legal fees, the filing fees for bankruptcy in the United States Bankruptcy Court are $338 for Chapter 7 and $313 for Chapter 13. In some cases, filers can have the fee waived. To achieve bankruptcy relief without paying the filing fees, they will need to submit a fee waiver to the court.
How Long Does Bankruptcy Stay on Your Credit Report?
Bankruptcy cases typically remain on your credit report for a significant period, affecting your creditworthiness and ability to obtain credit. A Chapter 7 bankruptcy filing typically stays on your credit report for up to 10 years from the filing date. Chapter 13 bankruptcy remains on your credit report for up to 7 years from the filing date.
How Many Times Can You File Bankruptcy in Philadelphia?
There is technically no limit to the number of times you can file bankruptcy in a lifetime. However, there are time limits between the dates on which you file bankruptcy. Speak with an experienced bankruptcy lawyer to determine when you are eligible to file bankruptcy if you have filed before.
How Often Can You File Bankruptcy in Philadelphia?
The frequency with which you can file for bankruptcy depends on the type of bankruptcy previously filed and whether your debts were discharged in the prior case. Under the Bankruptcy Code, if you previously filed for Chapter 7 bankruptcy and received a discharge, you must wait eight years from the date of the previous filing before you can file for Chapter 7 again and receive another discharge.
If you previously filed for Chapter 13 bankruptcy and received a discharge, you must wait six years from the date of the previous filing before you can file for Chapter 7 bankruptcy and receive a discharge. However, suppose you file for Chapter 13 bankruptcy after a previous Chapter 7 discharge. In that case, there is no waiting period to file, but you may not be eligible for another discharge in the new Chapter 13 case.
If you previously filed for Chapter 13 bankruptcy and received a discharge, you must wait two years from the date of the previous filing before you can file for Chapter 13 again and receive another discharge.
Can I File Bankruptcy Without a Lawyer?
While it’s technically possible to file bankruptcy without a lawyer, it’s generally not recommended due to the complexity of bankruptcy laws and procedures. Filing bankruptcy without legal representation can be risky and challenging, as the process involves navigating complex legal requirements, submitting detailed paperwork, and understanding the implications for your financial future.
A bankruptcy lawyer can provide invaluable expertise and guidance throughout the process, ensuring that your rights are protected, all necessary documents are properly filed, and you receive the best possible outcome for your situation. Additionally, a law office can help you explore alternatives to bankruptcy and provide personalized advice based on your specific financial circumstances.
How Can Sadek Bankruptcy Law Offices Help You With Your Bankruptcy Filing?
Our Philadelphia Bankruptcy Lawyers focus on the Consumer Bankruptcy Act (Chapters 7 and 13), Business Bankruptcy Law, Property Law, Family Law and General Litigation.
Our legal office is available to provide our clients with high quality services, including IRS bankruptcy, debt procedures and tax negotiation, while being able to provide efficient legal advice.
Our bankruptcy attorneys serve Philadelphia, Pennsylvania and provide bankruptcy representation to residents of Montgomery, Bucks, Chester, Delaware, and southern New Jersey counties.
Our main bankruptcy office is conveniently located near public transportation systems and attractions in Center City, Philadelphia, PA.
Why Should I Talk to a Philadelphia Bankruptcy Lawyer at Sadek Bankruptcy Law Offices?
At Sadek Bankruptcy Law Offices we understand the stress and sleepless nights that cause your situation, so telephone calls are answered promptly by our lawyers and our professional staff.
To arrange a free and confidential consultation with a Philadelphia bankruptcy attorney regarding your legal matter, call our Philadelphia headquarters at 215-545-0008.
Work with Our Dedicated and Experienced Bankruptcy Lawyers
Sadek Bankruptcy Law Offices, LLC has a dedicated team of lawyers who help clients achieve the benefits of bankruptcy in Pennsylvania and New Jersey. Our lawyers have over 75 years of combined experience and have filed more than 5,000 successful bankruptcy cases.