Pennsylvania businesses considering filing for business bankruptcy often have concerns regarding what will happen to the business if they choose to file for bankruptcy. The outcome of the bankruptcy will depend on the chapter under which the business files its bankruptcy.
Many people in Pennsylvania who are considering bankruptcy may want to file for Chapter 7, as most of their debts can be discharged when the action is granted by the court. However, not everyone is eligible to file in this specific category, which also equates to complete liquidation.
Many Pennsylvania residents have their wages garnished each year due to creditors obtaining judgments against them. People can choose to pay off the debt in full or to keep paying the debt through garnishment if they are able to do so. For many people, this is not an affordable option, however.
When someone files a Chapter 7 petition in Pennsylvania, a trustee will be appointed to administer the case. The trustee will liquidate the nonexempt assets that belonged to the debtor. If the debtor does not have any nonexempt assets, the trustee will likely file a no asset report with the court. In that event, no liquidation and distribution to unsecured creditors will take place.
Pennsylvania residents who are faced with overwhelming consumer or medical debt may sometimes consider filing for bankruptcy as a method of obtaining some relief from these obligations. The ultimate goal is to obtain a discharge from the bankruptcy court, as the effect of a discharge releases the filer from personal liability from some of these debts. The affected creditors are also prohibited from further communications with the debtor and from instituting or continuing any form of collection activity with respect to those obligations.
A Chapter 7 bankruptcy involves the liquidation of certain assets of the individual debtor, and creditors are paid off with the proceeds. Pennsylvania residents would file a petition for bankruptcy in a bankruptcy court closest to them. The filing fee is $245, and there is also a $75 administrative fee and a $15 trustee fee. These fees are normally due at the time of filing, but the court may give permission for the filer to pay in installments ending no later than 120 days after the petition is filed. Fees may be waived if the filer's income is less than 150 percent of the poverty level.
When debt seems to linger like an unshakeable cloud, a consumer in Pennsylvania may begin to feel desperate for help. Personal bankruptcy protection is available for those who wish to eliminate unsecured debts that have simply become unmanageable. However, it’s worth noting that filing for bankruptcy may have an impact on a friend or family member who cosigned a loan for a person who subsequently files for bankruptcy.
No matter how long a company in Pennsylvania may have been in business, sometimes the economic climate or a change in the industry forces the business to shut its doors once and for all. This may be necessary if the business owner’s liabilities exceed his or her assets, and there seems to be no way of getting out of the financial hole. One company in a nearby state ended up filing for Chapter 7 bankruptcy recently.
Even though business owners in Pennsylvania may aspire to thrive for years and even decades, a company's financial status may quickly take a turn for the worst given the right situation. For instance, a dip in the economy may keep buyers from purchasing a company's services or products. One construction company in another state recently decided to file for a Chapter 7 bankruptcy after being unable to keep its doors open.
Starting a business can be exciting, but when the economy is poor and business isn't booming as expected, this can cause duress in Pennsylvania. A few tips can help businesses in our state try to financially stay afloat during the toughest of times. Still, if they end up accruing debt that seems impossible to overcome, then Chapter 7 bankruptcy protection may be a viable and responsible option.