Legal Question in Bankruptcy in Pennsylvania

Re: Seeking Answers re: GSL and real property liens

As you may know, there are generally two types of bankruptcies for consumers, Chapter 7 and 13. The former is generally for those who simply require the elimination of unsecured debt such as credit cards. The latter is generally for those who have fallen behind in secured debt such as a mortgage. Chapter 13 allows you to repay any arrears over five years.

A bankruptcy protects just about all consumer assets. There is a $16,000.00 minimum homestead exemption in your principal residence per person. The contents of your home, if any one item is not worth a great deal, are exempt up to at least $8,000.00. There are many other exemptions, as well. Vehicles are exempt to a minimum amount of $2,500.00 and, there is what is commonly known as the "wildcard" exemption. You may use up to one-half of the homestead exemption for any asset you want to protect.

An exemption is a dollar amount assigned to an asset so that, if a Trustee ( the person charged with liquidating assets) were to attempt to sell such an asset, he would have to pay the exemption amount to you. Since the stated exemptions usually cover the value of the assets, most consumer cases are determined to be "no asset". Thus, you simply obtain a discharge of your debt.

In Pennsylvania, a judgment entered against an individual in a county acts as a lien on any real estate owned by the person in that county. In bankruptcy, it is possible to remove a lien if there is no equity in the property or that equity is exempt. To advise you further, I need to know the value of the property and the amount of the liens on it, exclusive of the judgment creditor.

Regarding student loans, if they are guaranteed by the government, they cannot be discharged in bankruptcy.

Therefore, assuming you otherwise qualify, you should consider filing. You should speak with experienced bankruptcy counsel to discuss all the ramifications.