Elements Involved in Bankruptcy
Determining whether to file for bankruptcy can be a difficult decision. Fortunately, there are some assessment tools that are helpful in determining whether a bankruptcy will be beneficial. The decision to declare bankruptcy should be based upon whether creditors have the ability to take your income or property, whether bankruptcy would relieve you of your major debts, and what property you might lose by filing.
Creditors and Your Property: Do your creditors have the right to seize your income and property if you default on payments? In Pennsylvania, an unsecured creditor has the right to file suit against you and to obtain a judgment. Once this occurs, the creditor has the right to garnish bank accounts and to attempt other collection activity such as seizing your property and belongings to auction them off. Bankruptcy stops collection activity and often provides complete relief from these seizures and sales.
Major Debts: Most debts, such as personal loans, medical bills, and credit cards are dischargeable through bankruptcy. Some debts, however, are generally not dischargeable; these debts include such things as student loans, child support, and alimony.
Exempt and Nonexempt Property: The bankruptcy code provides specific exemptions for many personal items including equity in your home up to the statutory limit, vehicles, guns, retirement accounts, tools and the like. You should review these exemptions with an attorney to ensure that your belongings would be protected by a bankruptcy.
If you are considering filing for bankruptcy, call Ross & Ross at (814) 274-8612. We will work hard for you.