Chapter 13 bankruptcy (personal bankruptcy) - Filing in Pennsylvania

Under Chapter 13, the debtor proposes a plan to pay his creditors over a 3 to 5 year period. This written plan details all of the transactions and their durations that will occur, and repayment according to the plan must begin within 30 to 45 days after the case started. During this period, creditors cannot attempt to collect on the previously incurred debt except through the bankruptcy court. Overall, you as the debtor get to keep your property, and your creditors end up with less money than they are owed.

Disadvantages of Chapter 13 bankruptcy:

• The disadvantage of filing for personal bankruptcy is that, under the Fair Credit Reporting Act, a record of this stays on the individual's credit report for up to 10 years;
• During the pendency of a Chapter 13 case the debtor is not permitted to obtain additional credit without the permission of the bankruptcy court;
• Creditors may not be willing to risk lending money to you.

However, the disadvantage of not being able to receive lending money is not unique to Chapter 13; it may also apply to people currently in a Chapter 11 case, Chapter 12 case, or those who are in or have recently been in a Chapter 7 case.

Advantages of Chapter 13 bankruptcy:

The advantages of Chapter 13 over Chapter 7 include the ability to:

• Stop foreclosures although a foreclosure would be reinstated upon completion of the bankruptcy;
• Achieve a super discharge of debts of kinds not dischargeable under Chapter 7;
• Split the security interest of creditors in certain property that creditors are either charging too much interest for, or are over-secured, or both, and revise modification of the debt;
• Prevent collection activities against non-filing co-signers during the life of the case.

Do you need a Pa. Chapter 13 bankruptcy lawyer to lead the way through the legal maze?