January 26, 2024
Whether you’re in a challenging financial place from income changes or high debt that has just become too much to bear...Read More >
Considering filing for bankruptcy? You are most likely going to file a Chapter 7 or Chapter 13. But how do you know which bankruptcy option is best for you and your situation? The Debt Doctors are here to explain the major differences between Chapter 7 and Chapter 13 and help you decipher which case would be most appropriate.
There are several types of bankruptcy, but only two are common for individual debtors. Chapter 7, which is a liquidation process. And Chapter 13, which involves restructuring debt into a long-term plan
In a Chapter 7 bankruptcy, you essentially wipe out your debts and get a fresh start. Chapter 7 is a liquidation where the trustee collects all the debtor’s assets and sells any that are not exempt, (click here to see PA Exemptions.) The trustee sells the assets and pays the debtor any amount that is exempt. Then, the net proceeds of the liquidation are distributed amongst your creditors.
However, certain debts cannot be discharged in a Chapter 7 bankruptcy such as alimony, child support, fraudulent debts, certain taxes, etc. You can read more on PA’s Non-Dischargeable Debts here.
In many Chapter 7 cases, the debtor has a large amount of credit card debt, other unsecured bills, and very few assets. In the vast majority of these cases, Chapter 7 bankruptcy can eliminate these debts.
Under a Chapter 13 bankruptcy, the debtor proposes a 3-5 year repayment plan. This plan goes to the creditors that are offering to pay off all or part of the debts from the debtors future income. Chapter 13 can be used to:
As long as you stick to the terms of your repayment agreement, all your remaining dischargeable debt will be released at the end of the plan.
Several factors go into the amount that is to be repaid, like the debtor’s disposable income. This is usually determined as part of the Pennsylvania Means Test. In addition, the total amount paid to creditors in the Chapter 13 plan must also be as much as creditors would receive if the debtor filed a Chapter 7 bankruptcy instead.
To file a Chapter 13 bankruptcy, you must have “regular source of income” and some disposable income to apply towards your payment plan.
Chapter 13 bankruptcy is generally used by debtors who want to keep secured assets like a home or car. When they have more equity in those secured assets, they can protect them with PA’s bankruptcy exemptions.
Understanding the ins and outs of filing for bankruptcy can help you decide if it’s the right path for you. Chapter 13 bankruptcy is a reorganization and restructuring of debt. Whereas, Chapter 7 bankruptcy is a liquidation. If you are unsure which chapter is best for you and your situation, contact us for a free consultation. Making the right decision now can enable future financial success and eliminate sleepless nights.
I am pleased to let you know that the Debt Doctors have joined the law firm of Quatrini Rafferty. Our new affiliation does not change anything. You case will be handled the same. Your current payment plan will remain the same. We will still practice under the name “the Debt Doctors”. You will still be working with Matt, Amy, Heather and Kate. We will have the same phone numbers, emails and website. The only change will be our physical location. We are moving from the Grant Building to 941 Penn Avenue, Suite 101, Pittsburgh, Pa 15222 (near the David Lawrence Convention Center).
All future mail should be sent to the 941 Penn Ave address.
We will still meet clients in Quatrini Rafferty’s Greensburg office (550 East Pittsburgh Street) and Latrobe office (816 Ligonier St.) and in New Castle at the Offices of Levine Law (22 East Grant Street).
We are joining with Quatrini Rafferty (see attachment) so that we can offer – you – our client more comprehensive legal services. Vince Quatrini and Dennis Rafferty, along with 10 other attorneys, have been practicing law – for over 40 years – throughout Western Pennsylvania.
Vince Quatrini, the managing partner of Quatrini Rafferty commented, “Matt and I believe this partnership works because of our shared respect for our clients and our sincere desire to help our clients work thru difficult and worrisome times in their lives.”
I am personally excited to have the opportunity to work in a firm that can help you if you need legal assistance with:
We do “Free Consultations”. You can reach us 24/7 at 888 534 6016. Please email -or call me – if you have any questions about our new group and if you would like to know more about our expanded list of legal services. My best to you and your family.
Very Truly Yours,
The Debt Doctors at QuatriniRafferty