Is Chapter 7 Bankruptcy Right for You?

Making the decision to file for bankruptcy is difficult. Getting solid counsel from an experienced bankruptcy attorney can help you decide if Chapter 7 bankruptcy is the right choice for your situation. An attorney will represent you throughout the process so that you can avoid making mistakes that could hurt you during the proceedings. Considering a few key factors is the first step.

  1. Chapter 7 bankruptcy is available to both consumers and business owners. Often referred to as a “liquidation” bankruptcy, this type of bankruptcy intimidates some potential filers because they worry that they will lose all of their personal property.  All or nearly all of your property will be exempt, including your residence, primary vehicle, personal property and retirement funds.  If any of your property is at risk, this can be discussed privately with your attorney and a positive solution can be found.  An attorney will advise and counsel you.


  1. Bankruptcy’s impact on credit is often another source of concern. The filing will stay on your credit report for up to ten years; the impact of that and mitigating the impact can be discussed with your attorney.  You will want to weigh the potential harm from the bankruptcy against that of unpaid bills, foreclosures and possible legal repercussions.  Sometimes, the damage caused by the latter issues is worse and these negative, non-bankruptcy choices will offset your credit for at least seven years. Choices will be made.  After filing the Chapter 7 bankruptcy, the door is closed on the debts; collection calls and law suits will stop immediately.  You will receive a fresh start.


  1. Some debts cannot be discharged with a Chapter 7 bankruptcy. If you have alimony, child support, school loans or certain tax bills, you will still be responsible for them. You may also be held liable for debt incurred shortly before filing. Discussing this with your bankruptcy lawyer and knowing which debts will remain after bankruptcy will help you make the decision to file.

Once you have decided to file for bankruptcy, the next step is to determine your eligibility.  A “means test” will determine whether your income (including all sources) is below the median for Pennsylvania. If so, you will qualify to file. If your income is above the median, several other factors will be considered.  Chief amongst these is a household income and expense analysis required by Sections 707(b) of the bankruptcy code, as well as the timing of the receipt of the income.

The key to a successful Chapter 7 bankruptcy filing is to be well-informed. If you are considering filing for bankruptcy and want to succeed in the filing and make the process as stress-free as possible, consult a bankruptcy attorney in Philadelphia like William D. Schroeder, Jr. At the first sign that you might be in financial trouble you should discuss matters.  You do not want to make a major misstep, which will hurt you once you file the bankruptcy. For more information, call 215-822-2728 for a 30 minute, $50 consultation.