The Bankruptcy Process in Pennsylvania

The Bankruptcy Process in Pennsylvania

Bankruptcy is a legal process that can wipe out your debts, prevent foreclosure, protect you from creditor harassment and debt collectors, and give you other financial benefits. In this informational bankruptcy guide for Pennsylvania residents, the Philadelphia bankruptcy attorneys of Sadek and Cooper Law Offices, LLC explain the Pennsylvania bankruptcy process, including differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy, and requirements for completing bankruptcy procedures in Pennsylvania successfully.

If you think bankruptcy could be right for your situation, or if you have any questions about the process of filing for bankruptcy in Pennsylvania, we encourage you to contact our law offices at (215)-545-0008 for a free bankruptcy consultation. Our Southeast Pennsylvania bankruptcy law firm is proud to serve residents of Bucks, Delaware, Montgomery, and Philadelphia Counties, including Manayunk, Germantown, Northern Liberties, Levittown, Croydon, Bristol, Chester, Drexel Hill, Ardmore, Norristown, Pottstown, King of Prussia, and beyond.

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How Does Bankruptcy Work in PA?

A person who files for bankruptcy is known as a “debtor,” “filer,” or “petitioner.” A person or company to whom the debtor owes money is called a “creditor.” The debtor may be a:

  • Single individual
  • Married individual, filing jointly with his or her spouse
  • Married individual, filing individually
  • Business owner

There can be advantages and disadvantages to filing jointly or individually for married couples. If you and your spouse are thinking about declaring bankruptcy separately or together, our attorneys can help you decide which approach would better help you attain your financial goals.

The primary purpose of bankruptcy is to help the debtor reduce, or in some cases completely eliminate, the debts he or she owes various creditors. Some debts need to be paid back in full, while other debts can be repaid for a fraction of what is actually owed. Debts that can be eliminated are called “dischargeable debts” and include:

  • Business Debts
  • Collection Agency Accounts
  • Credit Card Debt
  • Medical Bill Debt
  • Older Income Tax Debt
  • Past-Due Rent
  • Past-Due Utility Bills
  • Personal Loans
  • Repossession Deficiency Balances
  • Social Security Overpayments
  • Veterans Assistance Loans

Debts that cannot be eliminated are called “non-dischargeable debts” and include:

  • Alimony Payments
  • Child Support Payments
  • Criminal Restitution
  • Government Fines and Penalties
  • Most Student Loans
  • Recent Income Tax Debt

The process your case will follow depends on what type of bankruptcy, or which bankruptcy “chapter,” you choose. While there are rare circumstances where Pennsylvania residents file Chapter 11 bankruptcy, the vast majority of personal bankruptcy cases involve either Chapter 7 bankruptcy or Chapter 13 bankruptcy.

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PA Chapter 7 Bankruptcy Procedures

Other names for Chapter 7 bankruptcy include:

  • Liquidation
  • Ordinary Bankruptcy
  • Straight Bankruptcy

The process begins when you file your bankruptcy petition and pay a $335 Chapter 7 filing fee. You will also be required to submit supporting paperwork describing your debts, assets, income, and other financial information. Keep in mind that failure to provide complete and accurate information can result in dismissal of your case, leaving you stuck with your debts.

As soon as you file, you become protected by the “automatic stay” under federal law. The automatic stay stops (“stays”) debt collections while your case is pending, unless a creditor gains court approval to lift the stay.

Shortly after filing, the bankruptcy court will also assign a Chapter 7 bankruptcy trustee to your case. The trustee bears responsibility for administering the bankruptcy estate. In Chapter 7, the trustee’s role is to liquidate (sell) property and assets. Proceeds from the sale help you repay your debts.

Fortunately, most Chapter 7 debtors can keep much or all of their property. There are two reasons for this:

  1. If the property has low value, the trustee may abandon it.
  2. Debtors can protect certain property with bankruptcy exemptions. Pennsylvania debtors may choose between two sets of exemptions: the Pennsylvania bankruptcy exemptions, or the federal bankruptcy exemptions.

Chapter 7 bankruptcy typically takes as little as four to six months to complete. While there are variations from case to case, a general Chapter 7 timeline includes the following steps:

  1. Before you can file bankruptcy in Pennsylvania, you must (1) meet residency requirements, and (2) undergo mandatory pre-bankruptcy credit counseling through an approved agency.
  2. You file Chapter 7 bankruptcy.
  3. You mail requested financial documents to the bankruptcy trustee.
  4. Approximately one month after filing, the bankruptcy court schedules a meeting of creditors. During this meeting, you will be interviewed by the trustee to ensure all of your information is accurate, complete, and up-to-date.
  5. Within 60 days of the meeting of creditors, you must undergo mandatory pre-discharge debtor education through an approved provider.
  6. Approximately 60 to 75 days after the meeting of creditors, the bankruptcy court should discharge your debts if you have followed the process properly.

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PA Chapter 13 Bankruptcy Process

Other names for Chapter 13 bankruptcy include:

  • Reorganization Bankruptcy
  • Wage Earner’s Plan

Like Chapter 7, Chapter 13 begins with the filing of the bankruptcy petition, accompanied by a $310 Chapter 13 filing fee and supporting financial paperwork. Other similarities are that:

  • A bankruptcy trustee will be assigned to your case shortly after filing.
  • You will immediately gain the protection of the automatic stay, with some exceptions.

In Chapter 13 bankruptcy, nonexempt property and assets are not liquidated. In other words, you get to keep all of your property. However, you must propose, gain court approval for, and commit to a repayment plan, which will last for either three or five years.

Under the repayment plan’s terms, you make monthly or biweekly payments to the Chapter 13 trustee, who then distributes the funds amongst your creditors. Funds are distributed based on the types of claims each creditor has. This includes:

  • Secured Claims – These are debts “secured” by collateral, like a vehicle or a piece of property. Examples include auto loans and mortgages. These must be paid in full with interest in order to retain the property.
  • Unsecured Priority Claims – These are debts given special priority by federal bankruptcy regulations. They typically must be paid in full. Examples include spousal support, child support, and newer income tax debts.
  • General Unsecured Claims – Other debts belong in this category, and include utility bills, medical bills, credit card bills, and personal loans. You may pay less than what you owe on these debts, as long as your creditors receive at least the same amount that they would have received if you filed Chapter 7 instead of Chapter 13.

The process for Chapter 13 follows similar steps, including the meeting of creditors. However, the process is longer and more complicated than Chapter 7. For example, after the meeting of creditors, you must attend a confirmation hearing for the court to approve your reorganization plan. You must begin making payments to the Chapter 13 trustee within 30 days of filing for bankruptcy, even if the court has not yet approved your plan at that time.

The Pennsylvania bankruptcy court in the eastern part of the state is the United States Bankruptcy Court for the Eastern District of Pennsylvania. It has two courthouses, which are located at the following addresses:

Robert N. C. Nix, Sr. Federal Courthouse
900 Market Street, Suite 400
Philadelphia, PA 19107

The Madison Building
400 Washington Street
Reading, PA 19601

Philadelphia Attorneys Can Help You File Bankruptcy

Bankruptcy is a complicated procedure, but can yield great rewards, including foreclosure prevention, debt reduction, protection from debt collectors, improved ability to build good credit in the future, and invaluable peace of mind that your finances are stable again. To learn more about filing Chapter 7 bankruptcy in Pennsylvania or filing Chapter 13 bankruptcy in Pennsylvania, contact the Philadelphia bankruptcy attorneys of Sadek and Cooper Law Offices, LLC at (215)-545-0008 today for a free and confidential legal consultation.





Joseph Olson
Joseph Olson
17:12 22 Jun 18
We are extremely pleased with this firm. They have provided amazing detail, information and support during this difficult time in our life. We are truly grateful for all of their hard work and would highly recommend them to anyone!
Jamie Daniels
Jamie Daniels
13:20 20 Jun 18
I am more than happy with the service and expertise I received when I filed my recent chapter 13 case. They made everything very easy and comfortable under very stressful circumstances. I would highly recommend Sadek and Cooper.
Nagena Pierre-Louis
Nagena Pierre-Louis
13:19 13 Jun 18
I was less than a week away of losing my home. Sadek And Cooper helped me to save my only home. If they helped me they will be able to help you. Their help is just a phone call away. Please just call them!
Alicia Green
Alicia Green
14:16 22 May 18
My experience with Sadek and Cooper was awesome. They were extremely helpful with answering all my questions and made me feel comfortable and less anxious about filing for bankruptcy. The process was smooth and quick and had no issues at all!Alicia
Selena Pinkney
Selena Pinkney
13:52 22 May 18
I used Sadek Law Firm and had the best experience. All of the staff were very helpful and knowledgeable. They made a very scary process easy and painless. I would and have recommended their services.
Ethan Hew
Ethan Hew
13:44 16 May 18
Sadek & Cooper has to be the best firm for our bankruptcy needs. They walked my wife and I through the entire process and were always there to answer our questions. Hands down the best firm I’ve ever worked with.
Chris Jamison
Chris Jamison
19:52 04 May 18
Matt Lazarus from the start was very helpful with making me filing for bankruptcy as easy as possible. It is one of the hardest things to go thru in life. But you have to look at it as a new start. Thank you again to everyone at Sadek & Cooper for all your help.
Thomas Wright
Thomas Wright
15:09 24 Apr 18
Sadek and Cooper Law did a great job on my bankruptcy case. I really appreciate their assistant. Thank you
Kelly McKenna
Kelly McKenna
11:57 19 Apr 18
This form - specifically Yoninah Orenstein and Patrick Cooper are PHENOMENAL. They were great to work with, very fair with legal fees, and successful in getting an excellent settlement for my divorce (short term marriage
Dessiana Cruz
Dessiana Cruz
13:11 04 Apr 18
I was nervous about bankruptcy, but from the moment I stepped in your office I felt at ease. This process was so easy with your help, that yesterday I was talking to my coworkers about it and recommending your firm to them. You make something that’s scary seem easy and I thank you so much for helping me!
Valerie Nesbitt
Valerie Nesbitt
14:51 03 Apr 18
Sadek and Cooper have been excellent. Everyone has been extremely helpful and patient. The lawyers I have worked with, Matt and Brad, are extremely knowledgeable. I felt very comfortable with them handling my case.
Marlena Lucas
Marlena Lucas
16:08 02 Apr 18
Very simple. Any time I had questions, they were answered quickly. The lawyers are just great. Just a fast painless process.
James Smith Sr
James Smith Sr
13:19 14 Mar 18
Everything has been great. Really awesome job with my case... You and your staff have done a perfect job in my opinion.
Michkel Davis
Michkel Davis
17:02 09 Mar 18
Mr. Sadek was the best and most thorough lawyer I’ve ever met. He’s very human and caring about our case. His whole staff is great too. Highly recommend...
Tamika Richardson
Tamika Richardson
14:56 01 Mar 18
My bankruptcy went very smoothly with your firm. No issues. You are all very nice. That’s why I recommend my sister to your firm and your now helping her too! Thanks again.
Geraldine Ross
Geraldine Ross
14:14 28 Feb 18
This is an Excellent firm to work with; my questions were answered in a timely manner and I felt very supportive in handling my bankruptcy. I would highly recommend this firm to others who have found themselves in a position like mine.
Lavern Baker
Lavern Baker
17:03 23 Feb 18
You are all super lawyers. Brad and Matt made me feel comfortable. Every one in your office so nice and just made it easy. You’re the best!
peter b
peter b
19:42 21 Feb 18
Thank you, Sadek and Cooper Law offices for your dedication on my behalf. I appreciate Matthew and Patrick and your staff and all that everyone did to support me in this legal matter. You took an embarrassing, sad experience, for me, and turned it into a successful solution without all the emotional pain expected. After dealing with a loan modification company for over eighteen months without going to an attorney first that is the biggest mistake anyone can make. The Modification Companies set out to sell you lies, broken promises and dilute the homeowner's assets with no knowledge of any kind of law. I can't stress enough stay away from Modification companies, as a Military Veteran and family man, protect you or your family best interest. Go directly to Sadek and Copper you will not regret it! This firm moves with Super speed and diligence protecting you and your family's the entire process, even after watching some of these other attorneys in the courtroom appearing to mishandled their clients’ cases before the Trustee. You made it easy and I’m finally getting my financial life back on track! Thank you for your prompt replies to me, your clear information and preparation needed when at the courthouse. I would of course recommend you to others and I am glad you were the one who had my case. Kind genuine law firm who treats you like family. God bless you all and I pray for your continued success in your field of expertise. This firm is Super Lawyers for a reason. They are the best at what they do! Pete
Doug Tinlin
Doug Tinlin
06:55 15 Feb 18
Brad Sadek gave me hope when he decided to handle my mortgage for enclosure defense. I had exactly 10 days left of the 30 days ultimatum given me, but he was able to bargain for an extra 30 days for me to pay up. That duration turned out just right.
Jacinth Jacinth
Jacinth Jacinth
16:07 31 Jan 18
Excellent service. Brad and Matt were outstanding and friendly. They helped me through this. I’ve never met attorneys like these. Thank you!
julie njoku
julie njoku
12:29 24 Jan 18
Brad Sadek is excellent!. He understands and he's fair. You feel like you have someone fighting for you. The staff is friendly, professional, and courteous. These guys are the best at what they do !
Owen Black
Owen Black
20:14 09 Jan 18
Thanks for the great service! I would recommend this firm highly. Throughout the years I have been helped by this firm greatly and very much appreciated.
Steven Rychalsky
Steven Rychalsky
15:30 09 Jan 18
Sadek and Cooper law office was a wonderful experience to work with. Bankruptcy is a difficult experience but they helped with the stress so much and made it easy. I would recommend Sadek and copper too anyone.
Chris Kourelias
Chris Kourelias
19:09 28 Dec 17
Working with both Brad & Matthew was a pleasure. Both gentlemen are extremely knowledgeable and helpful in providing me the right assistance needed to make the correct decision to benefit me in the long run. I would recommend both candidates to anyone looking for assistance with a reputable law firm.
Jennyfer Santana
Jennyfer Santana
21:17 21 Dec 17
Highly Recommended. Matt & Brad assisted with my case. I felt comfortable throughout the entire process. Matt was very understanding, patient, and ensured he answered all my questions! Both great guys and very friendly! It was a pleasure working with Matt and Brad.
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