The Bankruptcy Discharge Process in Pennsylvania Explained

The bankruptcy discharge process in Pennsylvania is a critical step for individuals seeking relief from overwhelming debt. It marks the conclusion of a bankruptcy case and provides the debtor with a fresh financial start. Understanding this process is essential for those considering bankruptcy as a viable option.

In Pennsylvania, bankruptcy is governed by federal law, and the most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Each type has its own discharge process and implications.

Chapter 7 Bankruptcy Discharge

In Chapter 7 bankruptcy, individuals can eliminate most unsecured debts, such as credit cards and medical bills. The discharge process usually takes about 3 to 6 months from the filing date. After the bankruptcy petition is filed, the court assigns a trustee who oversees the case.

Once your petition is accepted, a mandatory meeting of creditors, known as the 341 meeting, will be scheduled. During this meeting, creditors can ask questions about your financial situation, although they often do not attend. If there are no objections from creditors or the trustee, the court will issue a discharge order, wiping out eligible debts.

However, certain types of debts are typically excluded from discharge, including tax debts, student loans, and child support obligations. Understanding which debts can be discharged is crucial for making informed decisions.

Chapter 13 Bankruptcy Discharge

Chapter 13 bankruptcy, on the other hand, involves a repayment plan that allows individuals to pay off their debts over a period of 3 to 5 years. This process begins with the creation of a repayment plan that must be approved by the bankruptcy court. Once you complete all payments as per the plan, you can receive a discharge of the remaining unsecured debts.

The discharge in Chapter 13 can include debts that were not fully paid during the repayment period, but, similar to Chapter 7, certain debts will remain non-dischargeable. It's important to work with a licensed bankruptcy attorney to ensure that your repayment plan is feasible and meets legal requirements.

The Importance of Credit Counseling

Before filing for bankruptcy in Pennsylvania, individuals are required to undergo credit counseling from an approved agency. This step is necessary to determine whether there are feasible alternatives to bankruptcy and to help individuals understand the implications of their decision.

The completion of credit counseling is mandatory, and certification of this counseling must be submitted with the bankruptcy petition. Failing to complete this step can result in the dismissal of your bankruptcy case.

Post-Discharge Responsibilities