Written by the Upsolve Team.
Updated July 27, 2020
Perhaps more than any other city in the world, Philadelphia personifies liberty. But if the City of Philadelphia personifies liberty, its people, like the movie character Rocky, personify toughness and a willingness to fight for their dreams. If you are tired of living in servitude to your debts, and tired of your dreams taking a back seat to your bills, you lack liberty from crippling debts and indifferent creditors. Filing a Chapter 7 bankruptcy in Philadelphia can give you a fighting chance at once again attaining the American dream. And here at Upsolve, we are all about second chances, and fighting back against poverty and debt. Founded in 2016, with a mission of helping individuals navigate the complexities of Chapter 7 bankruptcy relief, without incurring the sometimes enormous cost of hiring an attorney. To date, Upsolve has helped over 1,500 individuals file Chapter 7 bankruptcy for free and get a fresh start. And, if you qualify, we can help you too! At Upsolve, we believe no one is too broke for a second chance. If you’re ready to dream again, and make a clean break from the financial mistakes of your past, you can file a Chapter 7 bankruptcy in Philadelphia, for free, without an attorney. And Upsolve can, and will, show you how! Chapter 7 bankruptcy is a powerful, poverty-fighting tool that can immediately put an end to creditors constantly harassing you to pay bills you can no longer afford to pay. A bankruptcy’s automatic stay legally prohibits any of your creditors from continuing, or starting, any debt collection activities against you. Chapter 7 bankruptcy also gives you the right to keep all of your exempt property. 96% of all individuals who file Chapter 7 bankruptcy are deemed to have no-asset cases that allow them to keep all of their property. But, the most powerful weapon in the arsenal of Chapter 7 bankruptcy law, is the discharge which eliminates your debt without requiring you to pay any of it back. Even if you own too much property, or earn too much income, to file a Chapter 7 bankruptcy in Philadelphia, you can still file a Chapter 13 bankruptcy. Chapter 13 bankruptcy reduces and consolidates your debts into one monthly payment. Allowing you to pay as much as you can afford to over a period of three to five years before discharging the rest. Comparing Chapter 7 bankruptcy to Chapter 13, Chapter 7 is by far the most popular. It’s not only quicker, it’s easier and you can file a Chapter 7 bankruptcy, on your own, for free, without having to pay for an attorney!
Philadelphia Bankruptcy Lawyers – Estimated Cost
Philadelphia bankruptcy lawyers cost between $995 and $1,450 for a typical Chapter 7 case. Based on the cost of a bankruptcy lawyer, it should go without saying, that hiring an attorney to represent you in Chapter 7 bankruptcy in Philadelphia has certain advantages. First of all, most attorneys will prepare your bankruptcy forms for you as part of their representation. Second, an attorney can file your Philadelphia bankruptcy electronically from their office and obtain a case number for you immediately. Finally, an attorney can attend your 341 meeting of creditors with you and help you prepare for it. All of that being said, Upsolve believes an attorney is an excellent investment if you can afford one. But as our users have told us before, if you need bankruptcy relief it may be impossible to pay a lawyer. That’s why Upsolve is committed to showing you how you can file a Chapter 7 bankruptcy in Philadelphia on your own, for free, without an attorney.
How to File Bankruptcy in Philadelphia, Pennsylvania for Free
On July 4, 1776, the United States Congress officially issued the Declaration of Independence at Independence Hall. Among the self-evident truths and inalienable rights affirmed in the Declaration was life, liberty and the pursuit of happiness. But in a country where over half of families have less than $1,000 savings and a flat tire could mean a flat bank account, that pursuit of happiness is too often sidetracked by crippling debt and unpaid bills. But you can find happiness again. And a filing bankruptcy in Philadelphia can put you back on the road to financial freedom.
Collect Your Philadelphia Bankruptcy Documents
Some of the most revered documents in our nation were drafted in Philadelphia. You won’t need any of those documents to file a Chapter 7 bankruptcy in Philadelphia, but you will need some documents that may be important to you. These documents include your pay stubs, W-2, bank statements, tax returns, and 401k or pension statements. You will also need your current and past due bills. These include credit card bills, medical bills, personal loans, payday loans, subscriptions, memberships, insurance, utilities, phone bills, and other monthly expenses. If you own a car when filing bankruptcy in Philadelphia, you should also locate your certificate of title to the car. And, if you own a home, you should locate your recorded deed. Later, you will also need your driver’s license, state identification card, or passport and your original social security card.
Take Credit Counseling
Benjamin Franklin once said, “You may delay, but time will not.” In keeping with that admonition, the first thing you must do to start your Pennsylvania bankruptcy is complete a pre-bankruptcy credit counseling course. Pre-bankruptcy credit counseling is mandatory for everyone filing a Chapter 7 bankruptcy in Philadelphia. The course is designed to review your personal finances, help you determine your net worth and explore alternatives to bankruptcy. The course typically lasts about one hour and costs $15 to $35. You must take the course from an approved credit counseling agency and you must obtain a certificate of completion when done. American Consumer Credit Counseling is a non-profit, accredited, national debt relief agency that provides bankruptcy approved credit counseling in Philadelphia. Their toll-free telephone number is 1-800-769-3571. You may take the course from any approved provider, either online, over the telephone, or in-person. You’ll have to file your certificate of completion with the Court when you file your Pennsylvania bankruptcy case. You can obtain more information on the credit counseling requirements from the Court’s website.
Complete the Bankruptcy Forms
“He that can have patience can have what he will.” Benjamin Franklin. Completing all of your Philadelphia bankruptcy forms requires both patience and perseverance, but if you see it through to the end, you will be rewarded with the relief that comes from filing a Chapter 7 bankruptcy in Philadelphia. A Chapter 7 bankruptcy has approximately 23 forms, many of which are filled with legal jargon. However, all of the forms are intended to get three essential things from you: what you earn/own, what you spend, and who you owe. Using the documents you have already collected, including a recent credit report, you should be able to answer each form thoroughly, confidently, and accurately.
Get Your Filing Fee
“An investment in knowledge always pays the best interest.” Benjamin Franklin. There is a $335 filing fee to file your Chapter 7 bankruptcy in Philadelphia with the Court. This fee must be paid by cash, cashier’s check, or money order made payable to “Clerk, U.S. Bankruptcy Court.” If you can’t afford to pay the entire fee at once, you don’t have to postpone filing your Pennsylvania bankruptcy case. You can request to pay the filing fee in installments and in most instances, your request will be granted as a matter of course. The only restrictions that apply to your installment request are you can’t divide the filing fee into more than four installments, and the last payment must be paid no later than 120 days after you file your case. If you can’t afford to pay the filing fee at all, you can request to have the fee waived. Fee waivers are not guaranteed, however, so you’ll have to show that you earn less than 150% of the poverty level and are unable to pay the filing fee in installments after filing bankruptcy in Philadelphia.
Print Your Bankruptcy Forms
You will need to print all of the bankruptcy forms you have completed. Upsolve recommends printing at least two copies of each form. This way you have an original to sign and file with the Court and another copy to keep for yourself. You should only print on one side of each page because the Court does not accept doubled-sided documents. Depending on the number of creditors you have, your Pennsylvania bankruptcy petition will probably consist of 60 to 100 pages. Most modern home printers should be able to print this number of pages with no problem but if you have an older printer you may want to print your forms elsewhere. The Parkway Central Library, is an excellent location to complete and print your Philadelphia bankruptcy forms. The “Workplace” located in the library offers free computer access, free Wi-Fi, and the ability to print documents in black and white.
Go to Court to File Your Forms
“Well done is better than well said.” Benjamin Franklin. If you have gotten this far, and are ready to file your Chapter 7 bankruptcy in Philadelphia, well done! The United States Bankruptcy Court for the Eastern District of Pennsylvania is located at 900 Market Street, Suite 400 in downtown Philadelphia. The Court is only a five-minute walk from historic Independence Hall so you should expect to have to walk to the Court after you find parking. The Court is open from 8:30 a.m. to 5:00 p.m. but you should arrive at least 30 minutes before closing to allow enough time for the Bankruptcy Clerk to process your Pennsylvania bankruptcy. You should bring a signed copy of your Philadelphia bankruptcy forms, your filing fee or request to pay in installments or have the fee waived, and your certificate of credit counseling. The Court provides a handy checklist on its website of other items you may need when filing a Chapter 7 bankruptcy without an attorney.
Mail Documents to Your Trustee
A week or less after you file your Chapter 7 bankruptcy in Philadelphia, you will receive a Notice of Chapter 7 Bankruptcy Case from the Court. This notice contains the name, address and telephone number of your court-appointed Trustee. The Trustee is an individual, usually a lawyer, appointed by the Court to handle your Pennsylvania bankruptcy case. The Trustee will meet with you and ask you questions about your case, and then submit a report to the Court on whether you have any non-exempt assets. To help the Trustee perform their job, you’ll have to provide them with a copy of your last 60 days’ worth of pay stubs and your most recent tax return. The Trustee must receive these documents from you at least 7 days before your scheduled creditors’ meeting.
Take Bankruptcy Course 2
“By failing to prepare, you are preparing to fail.” Benjamin Franklin. The second bankruptcy-related credit counseling course you are required to take after filing bankruptcy in Philadelphia is intended to prepare you for life after bankruptcy. Known as the Debtor Education or Personal Financial Management Course, this course covers topics ranging from preparing a budget and managing credit to making wise spending decisions and dealing with financial emergencies. The course costs between $25 and $50 and lasts up to three hours. There is also an approved list of credit counseling agencies you can select from to take the course. You can take this course online, over the telephone or in-person but if you take it online you must pass a test when you complete it. You have sixty days from the date of your 341 meeting to complete the course and file your certificate of completion with the Court. Failure to do so within this time period could result in your Pennsylvania bankruptcy being closed without your discharge having been entered. You can take the course any time after you receive your case number, even before you have attended your creditors’ meeting. So, don’t wait, because to quote Benjamin Franklin again, “lost time is never found again!”
Attend Your 341 Meeting
Many people would be surprised to learn that bankruptcy pre-dates both the Declaration of Independence and the Constitution. The first bankruptcy laws were enacted in England in 1542 and a form of bankruptcy even goes as far back as Biblical times, when Mosaic Law codified something known as the “Year of Jubilee” where a person’s debts had to be forgiven, and their lands restored every 50 years. One of your last steps to having your debts forgiven as a result of your Chapter 7 bankruptcy in Philadelphia is the 341 meeting of creditors. The 341 meeting of creditors, or creditors’ meeting, is an informal meeting between you and your court-appointed Trustee. Creditors have a right to attend this meeting as well, but most choose not to. Your Trustee will meet with you, swear you in, verify your identity and ask you some questions concerning your Pennsylvania bankruptcy case. They will also inform you of the nature and consequences of a Chapter 7 bankruptcy. The meeting usually lasts less than fifteen minutes, and you will be notified of the date, time, and place of the meeting in your Notice of Chapter 7 Bankruptcy Case that you receive from the Court. The Court also publishes a calendar of 341 meeting dates and times you can check out to confirm you have the correct date and time on your calendar.
Dealing with Your Car
If you own your car and are making payments on it, you will have to choose what you want to do with it as part of your Chapter 7 bankruptcy in Philadelphia. If you want to keep your car, you have two options. You can either reaffirm your car loan or redeem the car. To reaffirm your car loan, you must enter into something known as a reaffirmation agreement with your lender. This agreement obligates you to keep paying for your car in exchange for your lender agreeing not to take the car back as a result of you filing for bankruptcy. This agreement must be voluntary, and it must be approved by the Court. This usually means you will have to attend a court hearing and explain to the judge why you want to keep the car, and why you believe you can afford to keep paying the car loan after you come out of your Pennsylvania bankruptcy. The second option is to redeem the car which means purchasing it from the lender for its current market value. The market value is not what you owe on the car, it’s what the car is currently worth. Since this is almost always less than you owe on it, if you redeem the car any balance you owe is discharged as part of your Pennsylvania bankruptcy. Once you redeem your car, your lender must give you a clear title to the car. Another, equally plausible option you have when dealing with your car, is to surrender it. Surrendering your car means giving it back to the lender - usually at an agreed-upon place and time. Your obligations under the loan are ended and the loan is discharged.
Pennsylvania Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Philadelphia
Pennsylvania Means Test
Like any privilege, some people try to abuse the bankruptcy system by filing Chapter 7 even though they can pay at least some of their debts. As a result, Congress amended bankruptcy law in 2005 to require everyone who files for Chapter 7 bankruptcy to complete something known as a Means Test. The Pennsylvania bankruptcy Means Test compares your household income to the median household income of a similar-sized family in Pennsylvania. If your income exceeds the median, there is a “presumption of abuse” occurring in your Pennsylvania bankruptcy. A presumption of abuse means that, looking purely at what your household earns, you should be able to pay your bills. You can overcome such a presumption of abuse and still file your Chapter 7 bankruptcy in Philadelphia, but you will have to complete some additional Means Test calculations in your bankruptcy forms to do so.
Median Income Levels for Pennsylvania
Pennsylvania Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Pennsylvania
Pennsylvania Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Pennsylvania Bankruptcy Forms
One of the most difficult parts of filing a Chapter 7 bankruptcy in Philadelphia is navigating your Pennsylvania bankruptcy forms. Because of the legal jargon used on many of the forms, it’s often difficult to understand what you are being asked. One form that uses a particular obscure form of legal jargon is Schedule E/F. Schedule E/F asks you to list your “priority” and “non-priority” creditors. Priority is a word that has almost no legal significance other than in bankruptcy proceedings. Priority deals with the order creditors will be paid in if there are assets to be sold and distributed in a Chapter 7 bankruptcy. Priority creditors are typically creditors who have debts that are non-dischargeable like taxes or child support. Non-priority creditors are everyone else you owe, like credit card issuers and medical providers. If in doubt, simply list a creditor as a non-priority and let your Trustee know why you did so.
Most individuals who file a Chapter 7 bankruptcy in Philadelphia will want to use something known as bankruptcy exemptions to protect their real and personal property. Pennsylvania allows you to choose between Pennsylvania bankruptcy exemptions and federal bankruptcy exemptions. Exemptions are laws that prevent certain property you own from being sold to pay creditors. This includes real property, like your home, as well as personal property like cars or jewelry. Because Pennsylvania bankruptcy exemptions do not provide exemptions for your home or motor vehicle, and only provides $300 in “wildcard” or “catch-all” exemptions, most individuals choose the federal bankruptcy exemptions. Under federal bankruptcy exemptions you can protect up to $25,150 of equity in your home, $4,000 of equity in your motor vehicle and some otherwise unprotected property with the “wildcard” exemption.