Pennsylvania consumers face difficulties when their debt is mismanaged. However, the financial circumstances of consumers change quickly and could prevent timely payments. The drawback of acquiring delinquent debts is that legal action against the consumer could occur. It could also have a damaging effect on their credit and ability to open new accounts. Bankruptcy attorneys in Phoenixville, PA, show consumers appropriate solutions for their unique circumstances.
What Advantages are achieved Through Bankruptcy?
Both chapters provide an automatic stay, which prevents legal action by creditors. It stops repossession and foreclosure of the property, and it lasts for the full duration of the bankruptcy case. However, any debts that aren’t managed during the case are the immediate responsibility of the consumer once the case is closed.
What Does Chapter 7 Present Consumers?
Chapter 7 is an opportunity to generate the funds needed to settle debts. The court acquires the deeds and tiles for any property that is up for sale. The court determines what properties should be sold and which options are protected through bankruptcy. They choose a person to manage the sale and distribute the funds to the creditors. It is the fast method of settling multiple debts at once.
Why is Chapter 13 a Clear Answer for Some Consumers?
Chapter 13 is a clear answer for consumers with larger volumes of debt. It gives them a plan that lasts up to five years and helps them settle debts through one monthly payment. These opportunities allow for the discharge of smaller debts without a settlement. They could include credit card debts that weren’t secured and have been collected through insurance claims or otherwise.
The major drawback of this plan is that the consumer must use all expendable income for additional debts. The court monitors their progress and modifies their plan based on pay increases and provisions included in their case.
Pennsylvania consumers need a solution that helps them settle their debts without creating financial hardship. Bankruptcy is among these opportunities that help consumers reduce their total volume of debt. Consumers who need to discuss a clearer solution should contact bankruptcy attorneys in Phoenixville, PA, through David T. Schnarrs.
