The Bankruptcy Code is a federal law, created by Congress, and there are several different kinds of bankruptcy, and each kind is detailed in its own "chapter" in the bankruptcy code. There are several different kinds of bankruptcy but for regular people the two most common types of bankruptcy cases filed are Chapter 7s and Chapter 13s.

Chapter 7

Debtors can keep all property that is exempt. Property that is not exempt is sold by the trustee, which is why this chapter is sometimes referred to as "liquidation". But don't panic.  Almost all consumer debtors can keep all of their property in bankruptcy.  Pennsylvania uses the Federal bankruptcy exemptions. A qualified bankruptcy attorney can help you determine which assets you will be able to keep. Most debtors can keep all of their assets and discharge all of their debts in a Chapter 7. Only an experienced attorney can assist you in determining whether or not you qualify for a Chapter 7 and even assist you in legal pre-bankruptcy planning and make sure you don't engage in illegal pre-bankruptcy actions, to help you qualify for a Chapter 7.

Your income must be under a certain threshold to qualify for a Chapter 7, or you must meet other requirements. This aspect of the bankruptcy law is new, and it is important that you are represented by an attorney who knows how to apply the new law to your best advantage. Filing under the wrong chapter can be difficult to correct and sometimes is impossible to correct. Contact us to speak with an experienced bankruptcy attorney who can help you determine if you qualify for a Chapter 7 bankruptcy.  Check out our frequently asked questions section for more information.

Chapter 13

This kind of bankruptcy is sometimes called a "reorganization" for individuals and families. It permits debtors to keep all property that is exempt (the same exemptions that apply in a Chapter 7), but it requires debtors to make payments to the bankruptcy court.

The three most common reasons why a Debtor would have to file a Chapter 13 instead of a Chapter 7 are:

1. A debtor's income is higher than the debtor's reasonable expenses, and so the debtor must pay that extra income into the bankruptcy court for three years to five years. If a debtor's income is under the Median Income then the payment is for three years; if it over the Median Income the payment is for five years. A debtor's payment is determined by looking at the Means Test, as well as the a debtor's current income and expenses.

 2. A debtor has property that is worth more than the exemptions the debtor has, but the debtor wants to keep property. The debtor must pay the court the value of the property and has up to five years to make the payment in full.  Check out our frequently asked questions section for more information.

3. The debtor owes a non-dischargeable debt, such as taxes, and wants the structure of the Chapter 13 to pay back those taxes, or the debtor wishes to catch up on a past due balance for a secured debt, where the debtor wishes to keep the collateral. For example, if you are behind in your house payments and owe $15,000 in past due payments, a Chapter 13 will give you the extra time you need to make those payments and stop the foreclosure. By filing a Chapter 13, you will have up to five years to pay that $15,000 back, provided you can keep up to date with your current payments as well. We can help you determine what your monthly payments will be, to help you determine if you will qualify for a Chapter 13 and if that is in your best interests. Check out our frequently asked questions section for more information.

Chapter 11

Chapter 11: This is the same as a Chapter 13, only it is used primarily for businesses. There are extremely rare occasions when an individual cannot file a Chapter 13, but instead must file a Chapter 11. Which bankruptcy chapter is right for you? That is the question only an experienced bankruptcy attorney can answer. We can help you. Let us help you decide how best to get a fresh start. 


1701 West Market Street
York, PA 17404
Hours:  M-F 9:00 am to 4:30 pm
Phone: 717-304-1841
Text: 717-304-1841  

The Fine Print

This is a law firm after all: This web site is for informational purposes only and does not create an attorney/client relationship. The law changes often, so please be sure to contact us for questions about your specific situation. You should NOT be making decisions about your financial life based only on the information on this web site or any web site. Seriously - don't do it. The law is complicated and is always in flux. This site is intended only for people who have legal matters in the Commonwealth of Pennsylvania. Pennsylvania has adopted the Federal Bankruptcy Exemptions, but not all states have done so. Be sure to contact a licensed attorney in your state, to learn about your state's bankruptcy procedure.

We are a DEBT RELIEF AGENCY under the United States Bankruptcy Code.

Dawn Cutaia, Esquire has been a licensed attorney in the Commonwealth of Pennsylvania since 1996, currently limiting her practice to bankruptcy, foreclosure and civil defense, and pardons.  Suzanne Smith, has been an attorney licensed in the Commonwealth of Pennslyvania since 1992, currently limiting her practice to criminal defense, pardons/expungements, and bankruptcy.  Dawn Cutaia is the sole member of Fresh Start Law, PLLC, a professional limited liability corporation in the Commonwealth of Pennsylvania.