Source: https://www.fileconsumerbankruptcy.com/bankruptcy-law/bankruptcy-in-pennsylvania-part-2
Timestamp: 2020-05-31 06:31:53
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Bankruptcy in Pennsylvania, Part 2 | File Consumer Bankruptcy .com
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Bankruptcy in Pennsylvania, Part 2
Continued from Bankruptcy in Pennsylvania, Part 1
If you got nothing else from Part 1, I hope you understand that bankruptcy protection is not a "dodge" for deadbeats or a "slick scheme" for those who would cheat the system.
In America, we realized long ago that it's senseless to send someone to debtor's prison--so long ago, in fact, that it's in the Constitution (Sec. 8) that Congress shall have the power to"establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States. . . ." The purpose is to provide people an honest, legal and orderly way to start over and keep functioning as a productive member of society.
Accordingly, we have a long history of bankruptcy legislation, the most recent being the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).
Under intense pressure from credit-card companies (and the banks that own them) and their lobbyists for about five years of hard-corner, back-room negotiations, Congress passed BAPCPA, designed to make it more difficult for consumers to file for bankruptcy protection. The idea was to make it tougher for individuals to file Chapter 7 (so-called liquidation bankruptcy), steering them toward Chapter 13 (so-called reorganization bankruptcy or the "wage-earner" plan).
Before BAPCPA, income had no bearing on eligibility for Chapter 7. What comes into play now is the states median income, as determined by the Census Bureau (see Pennsylvania QuickFacts, Census Bureau). Basically, if your household income is higher than the Pennsylvania median income, you must satisfy the criteria of the means test in order to file under Chapter 7. This also puts you in the category of being subject to provisions against abuse of the bankruptcy code, whereas pre-BAPCPA law was framed in terms of substantial abuse. If abuse is foundsubject to an appeal hearingthe Chapter 7 case can be dismissed (thereby exposing you once again to creditors) or converted to a Chapter 13 (or Chapter 11) filing.
Continued in Bankruptcy in Pennsylvania, Part 3.