Erie, PA asked in Bankruptcy for Pennsylvania

Q: I have charge cards bills adding up to $12000 do I do a chapter 7 or 13?

Related Topics:
1 Lawyer Answer
  • Consumer Law Lawyer
  • Cary, NC
  • Licensed in Pennsylvania

A: The amount of debt is not the determining factor for you. The question is whether you have assets and whether you make too much money to file a chapter 7. In a chapter 7, you get to keep only what is exempt under the state or federal exemptions. The exemptions in PA are limited, so if you have a house or car, you would probably want the federal exemptions. Assuming that all your assets would be exempt in a chapter 7 the next question is whether you meet the income test. Each state is different and you would need to sit down with a bankruptcy attorney to see whether you make too much money. If you do, then you cannot file a chapter 7 and have to file a chapter 13.

The difference between the two is this - with a chapter 7 you keep all your assets if they are exempt. You file your petition and schedules, have your meeting with the creditors and then get a discharge. If you have too much income, or too many assets or you are behind on your mortgage and want to save your home, then you have to file a chapter 13. In a chapter 13, you keep all your assets but you come up with a plan as to how you will repay about 25% of your debt over a 3-5 year period. However, to do a chapter 13 you must have a steady income stream so as to be able to make all of your payments.

Your credit card debt is not all that bad. Bankruptcy has consequences of its own. So its something you need to consider carefully. Many bankruptcy attorneys give free consults and you should definitely get one. You should also educate yourself on the bankruptcy process - or are a few places where you can go to get information and see for yourself as a preliminary thing whether you would qualify for a chapter 7 or not.

If you just want to be done and can file a chapter 7, that may be the way to go. However, your debts are not all that bad. There are other options too. If bankruptcy is not right for you, I have some non-bankruptcy alternatives suggestions for dealing with your debt. Please email me at if interested.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.