Everyone experiences financial difficulties at one time or another. Whether it comes about because of overwhelming credit card debt or mounting debts from a medical emergency or the loss of a job, the federal and state bankruptcy laws offer the chance for a fresh financial start. As a Delaware County, PA bankruptcy attorney, Michael Malarick will provide a thorough bankruptcy evaluation to determine whether bankruptcy is right for you.
The US Constitution in Article I Section 8 grants Congress the power to enact “uniform Laws on the subject of Bankruptcies.” A goal of the bankruptcy laws is to give debtors relief from burdensome debt. The US Supreme Court has explained that bankruptcy “gives to the honest but unfortunate debtor… a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of pre-existing debt.” Local Loan Co. v. Hunt, 292 US 234(1934).
The financial fresh start provided by a bankruptcy petition may stop foreclosure on your home, prevent wage garnishment and end harassing demands from consumer creditors.
An individual’s petition for bankruptcy is filed under Chapter 7 or Chapter 13 of the Bankruptcy Code. A Chapter 7 bankruptcy (Liquidation) provides a financial fresh start by discharging or erasing your debts. In many Chapter 7 petitions, the debtor has a large amount of unsecured debt (such as credit cards or medical bills) and little, if any, assets. As a Delaware County Chapter 7 bankruptcy lawyer located in Boothwyn, the law office of Michael T. Malarick can help you with your legal matters.
In a Chapter 13 bankruptcy (Reorganization) the debtor files a 3 to 5 year plan to pay off some or all of the debtor’s past and present debts from future income. In many Chapter 13 petitions, the debtor who has a regular source of income seeks to keep a secured asset such as a home. As a Delaware County Chapter 13 bankruptcy lawyer located in Boothwyn, the law office of Michael T. Malarick can help you with your legal matters.
What Property is Exempt from Bankruptcy
A Delaware County, PA bankruptcy attorney can advise his clients on the exemptions allowed under either Federal bankruptcy or Pa bankruptcy law. In PA, the debtor may elect either the Federal or PA exemptions – but not both. These exemptions list that property or assets which are exempt from the bankruptcy estate. In a Chapter 7 filing, the exemptions list that property the debtor is allowed to retain. In a Chapter 13 filing, the exemptions are factored into the repayment plan.
The Federal bankruptcy exemptions include:
- Homestead Exemption: $23,675 of the equity in the debtor’s principal place of residence (your home, not an investment or rental property);
- Personal Property Exemptions: some of these are $3,775 for a motor vehicle, $1,600 in jewelry, $2,375 in tools of the trade, $12,625 aggregate value of household goods, and $12,625 in loan value, accrued dividends or interest from a life insurance policy;
- Support or Benefits Exemptions: Social Security, Unemployment, Veterans, Public Assistance, and disability or illness benefits together with spousal and child support and life insurance payments that are needed for your support;
- Retirement Exemptions: retirement accounts that are exempt from taxation with a cap of $1,283,025; and
- Wildcard Exemption: $1,250 plus $11,850 of any unused portion of the Homestead exemption which may be applied to any property you own.
The PA bankruptcy exemptions include:
- Homestead Exemption: none, but property owned as tenancies by the entirety are exempt as to the debts of one spouse:
- Personal Property Exemptions: clothing, uniforms, bibles, school books, and sewing machines
- Wages: earned but unpaid wages and abuse victim wages;
- Pensions: tax exempt retirement accounts, state, county, city, and municipal employees, police officers and public school employees, and private retirement plans if so stated;
- Public Benefits Exemptions: Workers Compensation, Unemployment benefits, crime victim compensation, Veterans benefits, and Korean War Veterans benefits;
- Insurance Exemption: no-fault auto insurance proceeds; annuity or life insurance proceeds if policy so states or beneficiary is decedent’s souse, child, or dependent relative;
- Business Partnership Property Exemption; and
- Wildcard Exemption: $300 of any property.
What Debts Are Discharged in Bankruptcy
A majority of an individual’s debts can be discharged through bankruptcy. A discharged debt is wiped out—the debtor is no longer liable for the debt and the creditor cannot take any action to collect the debt.
Those debts that may be discharged include:
- Credit card charges, collection accounts, and medical bills;
- Personal loans from family, friends, or employers;
- Past due utility bills and rent;
- Business debts
- Dishonored checks (unless based on fraud);
- Civil court judgements (unless based on fraud); and
- Auto accident claims (except those based on drunk driving).
Those debts that may not be discharged include:
- Unscheduled debts (those not listed on the bankruptcy petition);
- Child or spousal support;
- Debts to a former spouse or child arising out of a divorce or separation;
- Attorney fees in child support or custody matters; and
- Court fines and penalties.
To get a financial fresh start through the bankruptcy law, a Delaware County, PA bankruptcy lawyer will provide a bankruptcy evaluation on a case by case basis for each bankruptcy consumer. Once a bankruptcy discharge has occurred or a repayment plan has been followed, the debtor will have a fresh start to rebuild credit without the burden of wage garnishment, foreclosure, or harassing phone calls or letters. Contact our bankruptcy attorney, Michael T. Malarick, for help with your legal matters.
Other Areas of Practice
- Slip and Fall Attorney in Delaware County
- DUI Attorney in Delaware County
- Workers Compensation Attorney in Delaware County
- Chester County Car Accident Lawyer
- Upper Darby Car Accident Lawyer
- Divorce Lawyer in Delaware County
- Expungement Lawyer in Delaware County