For people interested in filing bankruptcy in Pennsylvania, there are two main types of bankruptcy cases that comprise the vast majority of all case filings, and then there are several other types as well.
The first type is Chapter 7 bankruptcy, which is a good way to simply get rid of debts, such as credit cards, personal loans, repossessions, medical bills, payday loans, etc. Chapter 7 bankruptcy cases usually take 4 to 5 months from start to finish, and generally require one short court meeting/hearing before a bankruptcy official known as a Trustee. In Chapter 7 cases, you won’t repay any debts; they will simply be wiped out (“discharged”), however in a small number of cases, the Trustee will sell certain assets in order to repay creditors. Not everyone is eligible for a Chapter 7 case; for cases involving consumer debts, there are income guidelines, and if your household income falls above the guideline, then you will not be eligible to file. This is known as the Means Test.
The second type of bankruptcy is Chapter 13. It is ideally suited for people who are facing mortgage foreclosures, or real estate tax sales. Additionally, some filers who have previously (within the past 8 years) received a Chapter 7 discharge order may wish to file Chapter 13 instead. Finally, for people who earn more than the Means Test guideline, Chapter 13 may be a good alternative.
Chapter 11 bankruptcy is generally used for corporations or certain individuals who wish to reorganize their debts and finances. Chapter 11 filings are much less common than either Chapter 7 or 13 cases.