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A Chapter 13 Bankruptcy may be filed in Philadelphia, Pennsylvania for several reasons.  The three most common situations that a person or married couple qualifies for a Chapter 13 Bankruptcy repayment plan are listed herein below:

Situation #1

A person is facing mortgage foreclosure or a tax sale on their home. By virtue of the automatic stay in Bankruptcy, upon the Bankruptcy filing on your behalf the foreclosure or tax sale is stopped. In exchange, the homeowner will pay back the mortgage or tax arrearages interest free while enjoying their home. Additionally, if any other unsecured debts exist they will be paid a mere percentage and included in the Chapter 13 Bankruptcy plan.

Scenario #2

In 2005 the Bankruptcy laws were amended. Among other changes, the medium income standards were implemented. Generally, if a person or couple’s income exceeds the medium income standards then a Chapter 13 Bankruptcy is presumed appropriate. There are a many factors in determining if a Chapter 13 Bankruptcy is necessitated based on income and therefore it is imperative that you consult out Bankruptcy Attorneys to fully discuss your situation.

Situation #3

A person has equity over the bankruptcy exemptions in personal or real property. Using the “liquidation analysis” the court will mandate a payment toward unsecured debt up to the amount of the non-exempt equity or the amount of the debt itself. Although this scenario may sound confusing, the Philadelphia Bankruptcy Lawyers at Sadek Law Offices, LLC can explain if you fall into this rare category of Chapter 13 Bankruptcy.

The biggest difference between Chapter 7 and Chapter 13 Bankruptcy is that in Chapter 13 Bankruptcy a repayment Plan is filed.  The Petitioner makes a payment every month on a regular basis for a period of three (3) to five (5) years.  The benefit of a Chapter 13 Bankruptcy is that the debts contained in the bankruptcy are paid back at 0% interest.

As in a Chapter 7 Bankruptcy, there is a 341 Meeting where the trustee reviews your petition for truth and accuracy.  The hearing is generally up to a half an hour long.  Subsequent to the 341 Meeting, there is a Confirmation hearing, where the creditors and trustee have an oppurtunity to object to the filed Plan and request an amendment or modification to the Subject Plan.  If the Plan is successful at the Confirmation stage, the Judge will sign an Order “Confirming” the Plan.   Chapter 13 Bankruptcy can be a very complex and time consuming process, it is essential that you hire competent counsel to guide you through the entire process.

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Philadelphia, Pennsylvania region, you may contact the Philadelphia Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008  or (877) 4-LAW-411 or email [email protected]. Thank you.