Best Bankruptcy & Debt Lawyers in Philadelphia

About Bankruptcy & Debt Law in Philadelphia, United States

Bankruptcy law in the United States is governed by the federal Bankruptcy Code. If you are in Philadelphia you will file bankruptcy cases in the U.S. Bankruptcy Court - Eastern District of Pennsylvania, Philadelphia Division. Common consumer filings are Chapter 7 - liquidation - and Chapter 13 - repayment plan. Businesses most often use Chapter 11 or Chapter 7. Bankruptcy provides tools to stop most collection actions, address secured debts such as mortgages and car loans, and obtain a discharge of eligible unsecured debts. Local practice and procedure are governed by both federal bankruptcy law and local rules for the Eastern District of Pennsylvania, so local timing and document requirements matter.

Why You May Need a Lawyer

Bankruptcy affects your finances, assets, and credit for years. A lawyer can help you decide whether bankruptcy is the right choice or whether alternatives are better, prepare and file the petition and schedules accurately, and protect important exemptions. You may need a lawyer if your situation includes any of the following complications:

- You own a house, car, business, or other significant assets and want to protect them while filing.

- You have a foreclosure, repossession, wage garnishment, bank levy, or pending lawsuit that needs an immediate response.

- You have income that may make you ineligible for Chapter 7 under the means test or you need help structuring a Chapter 13 plan to fit your budget.

- You have complicated debt issues such as significant tax debt, recent large payments to creditors, allegations of fraud, or co-signed loans.

- You want to negotiate with secured creditors, resolve liens, or evaluate reaffirmation agreements for vehicles or other secured property.

An attorney can also represent you at the creditors meeting, respond to creditor or trustee objections, and guide you through post-filing requirements needed to obtain a discharge.

Local Laws Overview

Key legal and procedural points relevant to Philadelphia residents include the following:

- Federal framework - Bankruptcy filings rely on the U.S. Bankruptcy Code. The federal code sets the types of bankruptcy, discharge rules, the automatic stay, and national procedures.

- Local court - Cases arising in Philadelphia are filed in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, Philadelphia Division. The court uses local rules and procedures in addition to national rules. Court calendars, trustee assignments, and filing requirements follow the Eastern District format.

- Chapters commonly used - Chapter 7 is a liquidation filing that may discharge unsecured debts if you qualify. Chapter 13 is a 3-to-5-year repayment plan based on your income and allowed expenses and can stop foreclosure and cure mortgage arrears over time. Chapter 11 is used mainly by businesses or high-asset individuals seeking reorganization.

- Means test and eligibility - For consumer Chapter 7 cases, a means test compares your income to median household income and looks at allowable expenses to determine eligibility. If you do not qualify for Chapter 7, Chapter 13 is often an alternative.

- Exemptions - Exemptions permit you to keep certain property from the bankruptcy estate. Exemption rules and amounts vary by jurisdiction and may involve state exemptions, federal exemptions, or both depending on eligibility and local rules. An attorney can explain which exemption set is applicable and how to claim exemptions.

- Mandatory counseling and education - Federal law requires a pre-filing credit counseling session and a post-filing debtor education course as conditions of filing and receiving a discharge for consumer cases. These counseling requirements have specific timing rules.

- Section 341 meeting - After filing, you must attend a meeting of creditors, commonly called a 341 meeting, conducted by the assigned trustee. The trustee and creditors may ask questions about your finances and the documents filed.

- Automatic stay and relief from stay - The filing triggers an automatic stay that stops most collection efforts. Creditors can seek relief from the stay by motion if they have valid reasons - for example, to continue a foreclosure or repossession.

- Non-dischargeable debts - Certain debts typically survive bankruptcy, including most domestic support obligations, recent tax debts under certain conditions, criminal fines, and many student loans unless you prove undue hardship in an adversary proceeding.

- Consumer protections - In addition to bankruptcy law, consumers in Philadelphia are protected by federal debt collection laws such as the Fair Debt Collection Practices Act and by state consumer protection laws enforced by Pennsylvania authorities.

Frequently Asked Questions

What is the difference between Chapter 7 and Chapter 13?

Chapter 7 is a liquidation proceeding intended to discharge many unsecured debts after non-exempt assets are administered by a trustee - it is usually faster, often completed in a few months. Chapter 13 is a repayment plan that lasts three to five years and allows debtors to keep property while repaying creditors over time. Chapter 13 is commonly used to stop foreclosure and cure arrears.

How do I start the bankruptcy process in Philadelphia?

Begin by gathering financial records - income, tax returns, a list of creditors and debts, list of assets and monthly expenses. Complete the required pre-filing credit counseling session. Then prepare and file the bankruptcy petition and schedules in the U.S. Bankruptcy Court - Eastern District of Pennsylvania. Most filers consult an attorney before filing to ensure accuracy and to select the appropriate chapter.

Will filing bankruptcy stop creditor calls, wage garnishments, or foreclosures?

Yes - the automatic stay generally stops most collection actions, including creditor calls, wage garnishments, and foreclosure sales. However, creditors can ask the court to lift the stay. For foreclosures, timing and mortgage-specific rules may affect how long the stay provides protection.

Can I keep my home and car if I file bankruptcy?

Possibly. Whether you can keep your home or car depends on whether you are current on payments, whether the property is secured by a mortgage or lien, and whether exemptions protect enough equity. Chapter 13 often allows you to keep property by repaying arrears through the plan. An attorney can advise how exemptions and plan terms apply to your specific assets.

Which debts are not discharged in bankruptcy?

Common non-dischargeable debts include most child support and alimony, many recent tax obligations, criminal fines and restitution, and many student loans unless you win an undue-hardship adversary proceeding. Debts incurred by fraud or certain willful misconduct may also survive discharge.

How long does bankruptcy stay on my credit report?

A Chapter 7 bankruptcy can remain on your credit report for up to 10 years, while Chapter 13 typically stays for up to 7 years. The impact depends on your credit history and future financial behavior. Many people begin rebuilding credit soon after discharge.

Do I have to have an attorney to file bankruptcy in Philadelphia?

No - individuals may represent themselves and file pro se. However, bankruptcy law and local court procedures can be complex. Mistakes in filing, exemptions, or plan preparation can lead to denials, loss of property, or other adverse consequences. Most people benefit from consulting an experienced bankruptcy attorney.

What will a bankruptcy attorney in Philadelphia charge?

Fees vary by attorney, case complexity, and chapter filed. Consumer Chapter 7 fees are often a flat fee, while Chapter 13 fees may include a portion paid through the repayment plan. Initial consultations may be free or low cost. Ask prospective attorneys for fee structures and what services are included.

How does bankruptcy affect cosigners or joint account holders?

Bankruptcy typically discharges your personal liability for qualifying debts, but a co-signer or joint account holder who did not file may remain liable. Creditors can pursue non-filing co-signers for payment even after the primary filer receives a discharge.

What alternatives should I consider before filing bankruptcy?

Alternatives include negotiation with creditors for settlements or modified payment plans, debt management plans through nonprofit credit counseling agencies, debt consolidation loans where feasible, and seeking temporary forbearance from mortgage or student loan servicers. An attorney or a reputable credit counselor can help evaluate alternatives and compare costs and consequences.

Additional Resources

When seeking help in Philadelphia consider these types of resources and organizations - they can provide information, low-cost services, or referrals:

- U.S. Bankruptcy Court - Eastern District of Pennsylvania - for local court rules and filing information.

- U.S. Trustee Program - oversees bankruptcy administration and provides general information on consumer bankruptcy requirements.

- Legal aid organizations in the Philadelphia area - including nonprofit civil legal services that assist low-income residents with bankruptcy and debt matters.

- Consumer Financial Protection Office - for general information on debt, collection practices, and consumer rights.

- Pennsylvania Department of Banking and Securities and the Pennsylvania Attorney General - for state consumer protection resources and complaint processes.

- Nonprofit credit counseling agencies - for pre-filing counseling, debt management plans, and financial education.

Next Steps

1. Collect documents - assemble recent pay stubs, tax returns, bank statements, a complete list of creditors and balances, mortgage and car loan information, and a list of monthly living expenses.

2. Complete pre-filing credit counseling - this is required for consumer bankruptcy and must be done before filing.

3. Consult an experienced bankruptcy attorney - schedule a consultation to review your options, local rules, and the likely outcomes for Chapter 7 or Chapter 13 in the Eastern District of Pennsylvania.

4. Compare alternatives - consider settlement, debt management plans, or negotiation with creditors if bankruptcy is not the best fit.

5. If filing, prepare to attend the 341 meeting and complete the post-filing debtor education course required to receive a discharge.

Remember - this guide provides general information and is not legal advice. For advice about your particular circumstances consult a licensed bankruptcy attorney in Philadelphia who understands federal bankruptcy law and local court practice.