Bankruptcy (Debtor's Rights: Chapter 7)

Filing for Chapter 7 bankruptcy is a useful tool to someone who has overwhelming consumer debt. However, with the new law that became effective on October 17, 2005, a Chapter 7 has become much more difficult to obtain. Under the old bankruptcy rules, even if a person had sufficient income to pay some or all of his or her debts, the bankruptcy judge had the power keep a person in Chapter 7 based merely on the judge’s own prerogative. Under the new bankruptcy rules, however, there are clear criteria that dictate who will be allowed to stay in Chapter 7 and who must use Chapter 13. Under the new rules, the first step in figuring out whether you can file for Chapter 7 is to measure your "current monthly income" (average over 6 months) against the median income for a family of your size in Pennsylvania. Once you've calculated your income, compare it to the median income. (Table of median incomes can be found at www.usdoj.gov/ust ). If your income is less than or equal to the median, there is no presumption of abuse and you can file for Chapter 7. If it is more than the median, however, you must pass the "means test" before you may file for Chapter 7. If you do not pass the “means test,” you will need to file a Chapter 13 case. At the close of a successful Chapter 7, you will receive an order stating that your debts are officially discharged. Once a debt is discharged, you no longer have a legal obligation to pay it and the creditor has no legal right to demand it. An experienced attorney at Kaminsky, Thomas, Wharton, Lovette & Vigna will be able to assist you in determining whether you are eligible to file a Chapter 7 petition or whether you will need to file a Chapter 13. If you have an appointment to meet with an attorney from Kaminsky, Thomas, Wharton, Lovette & Vigna  to discuss bankruptcy, please download, read and sign the § 342(b) Notice and bring it to your initial consultation. Please note you cannot file for Chapter 7 if you obtained a discharge of your debts in a Chapter 7 case within the last eight years. NOTICE: WE ARE A DEBT RELIEF AGENCY THAT COUNSELS IN DEBT RELIEF. WE HELP PEOPLE FILE FOR BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE.