Bankruptcy Frequently Asked Questions

Answers to common Pennsylvania bankruptcy questions from Pittsburgh, PA Bankrupty attorney Foster Law Offices, LLC

We invite you to look through our frequently asked bankruptcy questions and find answers to common Pennsylvania bankruptcy issues. Don’t see an answer to your bankruptcy question? Contact our firm using our contact form or call 412-922-3427 to speak with a licensed Pittsburgh bankruptcy attorney. We work with clients throughout greater Pittsburgh, Allegheny County, Butler, Washington, Lawrence, Mercer and New Castle Counties.

Q: What is bankruptcy?

A: The United States Courts define bankruptcy as a legal procedure which helps people and businesses, who are no longer able to pay their debts, get a fresh start by liquidating assets to pay their debts or by creating a repayment plan.

Q: What is a Chapter 7 bankruptcy?

A: A Chapter 7 bankruptcy allows you to eliminate most of your unsecured debts including medical bills, credit card debt, personal loans, and in some instances taxes. Typically, a Chapter 7 bankruptcy takes approximately 4 months to complete and there is no long term repayment plan.

Q: What is a Chapter 13 bankruptcy?

A: A Chapter 13 bankruptcy is also referred to as a ‘home saver”. It enables individuals with regular income to KEEP their property and develop a plan to repay all or part of their debts. Typically, debts are reorganized and paid over a period of time – generally 3 to 5 years.

Q: How long does a Chapter 7 take?

A: A Chapter 7 bankruptcy generally takes 4 to 6 months from start to finish. At the end of the process, you will receive confirmation (discharge papers) stating that all of your debts eligible for discharge have been discharged and that your bankruptcy is complete.

Q: How long does a Chapter 13 payment plan last?

A: A Chapter 13 payment plan typically lasts betwen 36 to 60 months. In most instances, at the end of the process, you will receive a discharge of any remaining dischargeable debt once you successfully complete the plan (make all scheduled payments to the Court).

Q: How do I know if I should consider filing for bankruptcy?

A: As licensed Pittsburgh, Pennsylvania bankruptcy lawyers, we can assist you with determining if bankuptcy or an alternative to bankruptcy is right for you. The first step to determining if bankruptcy can provide you with the debt relief you need contact us to schedule your free consultation. A review of your unique financial situation with a Pittsburgh bankruptcy attorney may be a good idea if you are experiencing the following:

  • Falling behind on mortgage or vehicle payments
  • Fear of repossession or foreclosure
  • Have been served with Court papers regarding a judgment or lawsuit
  • Using credit cards to pay off other credit cards or debts
  • Significant medical bills
  • Interest charges are larger than the original debt
  • Paying the minimum payment just to “stay above water”
  • Purchasing small items or neccesities with credit cards just to survive
  • The stress of debt is affecting your health, family and work

Q: Will I be able to get student loans after I file for bankruptcy?

A: In most cases, yes. Student loan providers are barred by federal law from discriminating against an applicant because of a bankruptcy.

Q: Can I be fired for filing for bankruptcy?

A: No. Federal law prohibits an employer from firing an employee for filing for bankruptcy.

Q: Are there any age restrictions on filing for bankruptcy?

A: There is no age limit on the protections offered by the U.S. bankruptcy code. In fact, our office is seeing an increase in senior citizens looking for debt relief. If you are a senior considering bankruptcy, we invite you to contact our office and schedule a free consultation with one of our licensed Pittsburgh bankruptcy lawyers. There is no cost or obligation. The initial consultation allows us to meet you, address any questons or concerns you may have, and to fully explain the  bankruptcy process and the option it offers to seniors who may be experiencing debt problems or suffering to make ends meet on a fixed social security income.

Q: If I file for bankruptcy, will creditors continue to harrass me with phone calls and letters?

A: Once your bankruptcy is filed, the “automatic stay” goes into effect immediately. This means, creditors and debt collectors, once they receive notice of your bankruptcy, are barred from trying to make any further attempts to collect your debts.

Q: Will my utilities be cut off because I filed for bankruptcy?

A: No. Filing for Chapter 7 and Chapter 13 bankruptcy prohibits utility companies (such as water and electric company) from turning off your service.

Q: What is debt negotiation?

A: Debt negotiation is an alternative to bankruptcy, that is not appropriate in all cases, but can prove to be a valueable tool for some individuals. In a debt negotiation case, your licensed Pennsylvania bankruptcy attorney negotitates with your creditors directly, with the goal of reaching a settemet for a fraction of the full amount owed. That said, the risks and benefits of negotiation are different than those of bankruptcy and you should consult with an attorney before entering into debt negotiation with a law firm or debt consolidation company.

Q: Can I keep my personal property if I file for bankruptcy?

A: In most cases, the answer is yes. The US Bankruptcy Code offers “exemptions” allowing individuals to protect (keep) a specified amount of personal property. This includes: household goods, clothing, vehicles, real estate, jewelry, recreational goods, electronics, retirement plans, etc.. The amount of property that can be exempted varies based upon the type of property you are trying to protect. For additional information on exemptions and protecting assets in YOUR unique financial situation, contact the licensed Pennsylvania bankruptcy attorneys at Foster Law Offices, LLC to schedule a free consultation.

Q: Will I lose my retirement plan or social security benefits if I file for bankruptcy?

A: No. Typically, Social Security benefits, IRS qualified retairement plans such as a 401k plan, pension, IRA, SIMPLE or Keogh plan are considered “exempt property” (they are protected in bankruptcy).

Q: Can I purchase or sell property during bankruptcy?

A: It is possible to sell property during a bankruptcy; however, all purchases or sales must go through the Court. If you are in an active bankruptcy, contact your licensed Pennsylvania bankruptcy attorney BEFORE you purchase or sell any real or personal property (this includes vehicles, real estate AND personal property such as jewelry, collectibles, guns, etc…).