Legal Question in Credit and Debt Law in Pennsylvania

Thank you for your inquiry below.

When you are in a situation in which it is difficult or impossible to repay your debts, you have several options. One is to negotiate with your creditors. However, that is time consuming, uncertain and possibly pointless if you do not have the ability to pay them. The second option is to ignore the debt. The creditors will hassle you, possibly sue you and could seize your assets and bank accounts. The third option is bankruptcy.

There are 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.

In each case, the filing of the bankruptcy creates what is known as an automatic stay. That prevents any creditor from taking any action whatsoever. They cannot call you, write you or sue you. Moreover, once we are retained, you can tell anyone who contacts you to contact us and that should provide you with some relief. Ultimately, when you receive a discharge order, the automatic stay becomes permanent.

Most assets are protected in bankruptcy and you should speak to counsel about whether your assets are at risk before choosing a course of action.

I trust this answers your question, but feel free to contact me at your convenience. Rest assured, I will provide you with clear and simple advice and information. If you call me and reach my voice mail, please feel free to leave a message as all calls are confidential.

Debts are never forgiven after 7 years. The unpaid debt can stay on your credit report for 7 years after the date of default, but the debt never ever goes away. Even if the statute of limitation has expired, these "zombie" debts can resurface. And yes, assuming that the creditor gets a judgment against you, the creditor can collect. I have had an experience where one creditor did just what you are afraid of - the client was essentially judgment proof and the creditor sent the sheriff out to try and sell the poor man's possessions - his bed, 17-inch tv, his kitchen table, etc. So it can happen, although I do not know what credit card debts you have or who will be the law firm representing the creditors. Some are nice and some are nasty.

You should definitely consult with a bankruptcy attorney. Many attorneys give free consults. They will best be able to advise you how to protect your assets and still file bankruptcy. The bankruptcy should not affect the house, but it may depend on if the house is solely in your name, its value and whether it is mortgaged. The inheritance may be problematic and a bankruptcy attorney would have to advise on that. In a Chapter 13, you can keep your assets but you must pay your creditors over a 5 year period, depending on whether you have secured debt or just credit card debt.

I have to disagree about debt settlement. I am an attorney and handle the PA clients for a debt settlement company. Yes, it is time consuming. Depending on the level of debt, it can take people 4 to 5 years to get it settled. However, it is geared to help people who do not have the resources to pay right now. They put a set amount in the program and when they have funds saved up, the debts are tackled, one at a time, depending on the level of funds. Debts can be settled for as low as 15% or as much as 90%. It depends on the creditor and the stage at which the debt is at (whether it has gone to judgment or not). And unlike bankruptcy, it does not stay on your credit report for 7 to 10 years and it does not mess up assets that are held with others or inheritances. For some people, bankruptcy just is not an option.

I also handle debt settlement outside the company for those who are able to settle immediately.

As I said, you should consult with a bankruptcy attorney to see if that is feasible. While you claim that you cannot pay, I do not know your circumstances. Are you unemployed? The company has programs for seniors and programs for others. If the program will not work, then debts can stilll be resolved.

If you are interested, feel free to contact me to better discuss your situation. I give free consults by email or 30 minutes by phone. There is no obligation and no pressure to use me or the debt settlement program.

Rachel Hunter

Attorney at law

[email protected]

(678)-687-9693

Atdmitted in GA, PA & NC