David R. Black's Bankruptcy Legal Group
a division of Black, Stranick & Cella, P.C.
Chapter 7 Personal Bankruptcy Laws in Philadelphia and Media
Qualifying for Chapter 7
Chapter 7 is the chapter of the Bankruptcy Code providing for the "liquidation” (sale) of a debtor's nonexempt property and the distribution of the proceeds to creditors. Individuals with unsecured debt often seek relief from Chapter 7. Unsecured debt is debt where creditors have no special assurance of payment. Debts from medical expenses and credit cards are both considered unsecured and are common reasons for an individual to file for Chapter 7.
Do I qualify for Chapter 7?
The amount of the debt is not an issue in a Chapter 7 bankruptcy case. What is important is the debtor’s income level. A debtor must compare their monthly income to the mean income level of the state that they file in to determine their eligibility. If a person’s median income is less than their state’s median income level, they typically qualify to file under Chapter 7.
What happens to my property?
The bankruptcy trustee sells the debtor's nonexempt assets and uses the proceeds to pay creditors. The debtor is allowed to keep exempt property but all the other assets will be liquidated. Exempt property is determined by Pennsylvania and federal law. The debtor should consult an attorney to determine the exemptions available in Media and Philadelphia.
Which of my debts are included in my bankruptcy case and when will my debts be discharged?
Debts that are not discharged in Chapter 7 include debts for taxes and educational loans, alimony and child support, and debts caused by injury or death due to a motor vehicle accident in which the debtor was intoxicated by alcohol. In most cases, unless a complaint is filed, the bankruptcy court will issue a discharge order within 60 to 90 days after the initial filing.
Chapter 7 bankruptcies are complicated and require knowledge of the state and federal bankruptcy laws.
