CHAPTER 7 is a type of bankruptcy that will discharge unsecured debt so that you are no longer responsible for ongoing payments. Qualification for Chapter 7 bankruptcy is income based. Generally, the income in the household must be less than the Pennsylvania median income for the household size. You also must need all income in the household for your living expenses - there can be nothing left over to make payments to creditors to qualify for Chapter 7.  Chapter 7 is also a liquidation process. The bankruptcy Trustee will look for assets that can help repay the creditors. Any unprotected assets can be sold by the Trustee with the proceeds used to pay creditors.  It is critically important that you discuss your risks of losing assets in a chapter 7 bankruptcy with attorney Michael Schwartz so that you can make the right decision.

CHAPTER 13 bankruptcy is an alternative to Chapter 7.  If you do not qualify for Chapter 7, most likely Chapter 13 bankruptcy will be appropriate for you.  A Chapter 13 bankruptcy will force creditors into a monthly payment plan.  Like a chapter 7 bankruptcy, once the bankruptcy is filed collection must stop, including mortgage foreclosure actions. Very often, a Chapter 13 bankruptcy is used to stop a foreclosure or sheriff sale and force the mortgage company into a payment plan on what is owed. Chapter 13 bankruptcy works very will with IRS debt too. In Chapter 13, all interest and penalties stop during repayment. Sometimes, older IRS liability can be eliminated or repaid at a reduced rate. The amount of debt that will need to be repaid in a Chapter 13 depends upon income, expenses, assets, and debt. 

Michael Schwartz will provide a free evaluation and let you know your best alternatives.