Litvak Legal Group-Bankruptcy Lawyer
Litvak Legal Group-Bankruptcy Lawyer

CHAPTER 7 BANKRUPTCY

Bucks County PA
Chapter 7 Bankruptcy Lawyer

Chapter 7 Bankruptcy is available to individuals, married couples, corporations and partnerships. It is commonly known as a Liquidation Proceeding. In theory, all of the debtors’ assets are sold and the proceeds are distributed among the creditors. In practice, most debtors, if not all, keep their assets while discharging their debts.

However, to achieve the best results, any Chapter 7 Bankruptcy case must be carefully planned and executed by a lawyer.

Chapter 7 Debtors may obtain discharge only once every eight years. However, debtors may still file Chapter 13 Bankruptcy or other types of bankruptcy cases to avoid collections, garnishment and other creditors’ actions.

Generous exemptions are available to protect some assets like cars, tools, books, jewelry, firearms, clothing, most retirement accounts (401K and IRA accounts), personal items, collectables and other items via available Federal or State Exemptions.

The vast majority of Chapter 7 Bankruptcy cases are “no assets” and clients, where people may have no assets outside of the available exemptions to liquidate. People save their assets, while discharging most of their debts.

Chapter 7 Bankruptcy Lawyer
in Bucks County PA

With the help of our experienced Chapter 7 Bankruptcy lawyer, Litvak Legal Group will get you on the road to financial freedom with a clean slate of your unsecured debt. With 3 convenient office locations in Bensalem, Philadelphia and Princeton, NJ, we help clients throughout Bucks County PA, Philadelphia and Central NJ. Call 215-515-7113 (PA) or 732-624-6283 (NJ) for a confidential, free initial consultation.

Chapter 7 Bankruptcy
Qualification Process

Clients must qualify for Chapter 7 Bankruptcy, which is known as a Means Test. Clients must be below a certain income threshold. The Means Test is location specific and takes into account the applicable number of household members. As of April 1, 2020, the following numbers apply:

The above numbers are periodically adjusted. Historically, the numbers were raised every so often and provided a much-needed adjustment in light of wage increases and inflation rates.

Debtors must also complete pre-and-post filing approved debtor education programs. Some debtors may avoid the courses’ requirements under the incapacitated, disability or active military duty in a combat zone or other “exigent circumstances” exception. We can provide a list of approved debtor educational providers and recommend several our Chapter 7 Bankruptcy Lawyer has worked with throughout the years.

Automatic Stay Provision of the Bankruptcy Code will stop Collections, Creditors’ Calls, most Law Suits and even Tax Authorities’ collection actions.

Individuals and Married Couples can discharge most of their debt. Joint cases are now available to heterosexual and same-sex couples alike.

Additional Debt Relief strategies are available to further assist clients with non-dischargeable debts.

Chapter 7 Bankruptcy WILL NOT discharge:


Most Tax Obligations, unless qualify for very strict rules
Child and Spousal Support Obligations
Student Loans can be discharged only under the extreme hardship circumstances.

Typical Chapter 7 Scenarios

Scenario No. 1: Debtor with one minor-dependent.
Debtor is employed, earning approximately $45k (gross) per year. Debtor also receives $500 per month in child support. Debtor has credit cards, personal loans and old rent debt from their prior apartment. Debtor rents the primary residence. Debtor has the following assets:

  • Payed off vehicle worth approximately $6,500.
  • IRA Account with a balance of approximately $35k.
  • Some basic jewelry worth approximately $2,500.
  • Checking account with approximately $200.
  • Basic household furniture, clothing, a cell phone, TVs & other household items including toys, bicycles, etc.
  • Debtor was recently involved in a personal injury law suit and is expecting approximately $12l in settlement.
  • Employer-provided life insurance with no cash value.

Scenario No. 2: Joint Debtors, wife & husband with three minor-dependents
Debtors are employed, earning approximately $95k (gross) per years. Debtors have two cars and they’re currently making payments on both auto loans. Debtors have credit cards and personal loans. Debtors have two mortgages secured by the house; the house has little to no equity. Additionally, Debtors have the following assets:

  • 401k Retirement account with a balance of approximately $70k.
  • Some basic jewelry worth approximately $1,000.
  • Debtor has stock worth approximately $500
  • Basic household furniture, clothing, cell phones, TVs & other household items including toys, bicycle, etc.
  • Checking and savings account with $1,500 in both account.

Chapter 7 Bankruptcy Lawyer in Bucks County PA

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