Philadelphia Debt Removal and Consolidation

A Chapter 13 bankruptcy allows you to restructure your debt into a manageable payment plan. It gives you between three and five years to pay creditors, and if the sum of the debt is too large, you may only need to repay a portion of the total.

Chapter 13 Basics – How Do I Determine My Payment Plan?

In Pennsylvania, if you are behind on mortgage payments, often the result of health care costs, you might receive a notification of foreclosure. To make matters worse, the letter notes that the house will be foreclosed in a quick 30 days. There is no way for to come up with the entire lump sum in such a short period. Chapter 13 bankruptcy can help save your home. After filing, the next step of the process is to calculate an appropriate payment plan.

To qualify for a Chapter 13 bankruptcy, you need to prove you can comply with the payment plan. A consistent source of income is necessary, either from a job or otherwise. Your ability to pay is determined by either your disposable monthly income, or the liquidation value of non-exempt assets.

If you make $4,000 per month and spend $3,800 on necessities (including your current mortgage payment), your disposable income would be $200 per month. If the $200 is higher than the value of liquidating your non-exempt assets over the time period of the repayment plan, then it will be used to determine payments.

I can sit down with you and help construct the best plan for your long-term financial outlook which is then approved by the U.S. Bankruptcy Court, Eastern District of Pennsylvania. After diligently making monthly payments for the full period, the remaining unsecured debt, like credit card debt, is discharged.

Should I Choose a Chapter 13 or a Chapter 7 Bankruptcy?

Close to 400,000 Americans opted for Chapter 13 to relieve debt last year, according to the Administrative Office of the U.S. Courts. It is the second most common form of bankruptcy behind Chapter 7. But do not let the prevalence of Chapter 7 bankruptcies fool you. Chapter 13 can be a very powerful financial tool, particularly for homeowners.

Chapter 13 bankruptcies provide different advantages over Chapter 7, including the ability to repay a significant amount or all of your debt over the repayment period. It also allows individuals with second mortgages or home equity lines of credit (HELOC) to eliminate these sources of debt entirely.

Bankruptcy Law is a complex field, requiring professional expertise in Personal Finance, as well as legal services. I am passionate about helping you take control of personal finances and set the groundwork for success and security. For a free consultation on your next financial decision, call (215) 854-6342.

Pennsylvania Bankruptcy Resources:

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