Financial difficulties can happen to anyone. Job loss, medical bills, divorce, or simply living beyond your means can lead to overwhelming debt. When creditors are calling, wages are being garnished, and there seems to be no way out, bankruptcy may provide the fresh start you need. A bankruptcy attorney in Pittsburgh can guide you through this process, helping you understand your options and take the steps necessary to regain financial stability.
Types of Bankruptcy for Individuals
Federal bankruptcy law provides several options for individuals seeking debt relief. The most common are Chapter 7 and Chapter 13 bankruptcy. Each has different requirements and consequences, and the right choice depends on your income, assets, and financial goals.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, often called liquidation bankruptcy, allows you to eliminate most unsecured debts like credit cards, medical bills, and personal loans. In exchange, a trustee may sell some of your non-exempt property to pay creditors. However, Pennsylvania’s exemption laws protect many types of property, and most Chapter 7 filers keep everything they own.
To qualify for Chapter 7, you must pass a means test that compares your income to the median income in Pennsylvania. If your income is below the median, you qualify automatically. If it is above, additional calculations determine your eligibility. A bankruptcy attorney can help you understand how the means test applies to your situation.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy works differently. Instead of liquidating assets, you propose a repayment plan lasting three to five years. During this time, you make monthly payments to a trustee who distributes the funds to your creditors. At the end of the plan, remaining unsecured debts are discharged.
Chapter 13 is often the better choice if you have regular income and want to keep property that might be sold in Chapter 7. It also allows you to catch up on mortgage or car loan payments while stopping foreclosure or repossession. People who do not qualify for Chapter 7 because their income is too high can still file Chapter 13.
What a Bankruptcy Attorney Does
Filing bankruptcy involves detailed paperwork, court appearances, and negotiations with creditors and trustees. A bankruptcy attorney handles these tasks and provides guidance throughout the process. They begin by analyzing your financial situation, including your debts, income, assets, and expenses. Based on this analysis, they recommend the chapter of bankruptcy that best fits your needs.
Your attorney prepares and files the bankruptcy petition and schedules with the court. These documents list everything about your financial life, including all debts, all property, income sources, and monthly expenses. Accuracy is essential because mistakes can delay your case or result in dismissal.
The Automatic Stay
When you file bankruptcy, an automatic stay goes into effect immediately. This stops most collection actions against you. Creditors cannot call, send letters, garnish wages, or continue lawsuits. Foreclosure and repossession proceedings are halted. This breathing room gives you time to work through the bankruptcy process without constant pressure from creditors.
Meeting of Creditors
About a month after filing, you attend a meeting of creditors, also called the 341 meeting. The trustee assigned to your case asks questions about your finances and the information in your petition. Creditors may attend and ask questions, though this is rare in most consumer cases. Your attorney prepares you for this meeting and attends with you.
Choosing the Right Attorney
Bankruptcy law is technical, and outcomes depend heavily on how cases are handled. Look for an attorney who focuses on bankruptcy and has experience with cases similar to yours. Ask how many bankruptcy cases they have filed and what percentage receive successful discharges.
Cost is a consideration for people already facing financial difficulties. Bankruptcy attorneys typically charge flat fees for Chapter 7 cases and may allow payment plans for Chapter 13. The fee should include the petition preparation, meeting of creditors, and any hearings required to complete your case.
Life After Bankruptcy
Bankruptcy remains on your credit report for seven to ten years, but its impact diminishes over time. Many people begin receiving credit offers shortly after their case concludes. Rebuilding credit involves using credit responsibly, paying bills on time, and gradually taking on new obligations.
The relief that comes with eliminating debt allows many people to save money, plan for the future, and regain financial stability. Rather than continuing to struggle with debts you cannot repay, bankruptcy provides a legal path to a fresh start.
Taking the First Step
If you are considering bankruptcy, consulting with an attorney is the best way to understand your options. Many bankruptcy attorneys offer free initial consultations where they review your situation and explain what bankruptcy can and cannot do for you. This consultation helps you make an informed decision about your financial future.
Debt problems do not improve on their own. Interest continues to accrue, collection actions escalate, and the stress takes a toll on your health and relationships. A bankruptcy attorney in Pittsburgh can help you evaluate your situation, understand the process, and take control of your financial life.