Find Bankruptcy Lawyers Near You in Allentown, PA

Typical costs for hiring a bankruptcy lawyer in Pennsylvania vary by chapter and case complexity. For a straightforward Chapter 7 case, attorney fees generally range from $1,200 to $2,500, with the court filing fee of $338 bringing the total to approximately $1,538 to $2,838. Chapter 13 cases involve higher attorney fees, typically $3,000 to $5,000, plus the $313 filing fee, for a total of $3,313 to $5,313. Many lawyers offer payment plans that allow you to pay attorney fees in installments before filing, and the court allows the filing fee to be paid in up to four installments over 120 days for Chapter 7 or 180 days for Chapter 13.

Some bankruptcy lawyers in Pennsylvania offer flat-fee pricing for Chapter 7 cases, meaning you pay one set amount that covers all work through the discharge. Others charge hourly rates, though flat fees are more common for consumer cases. For Chapter 13, attorney fees are often included in the repayment plan and paid through the trustee over the life of the plan, reducing the upfront cost. Pro bono or reduced-fee services may be available through Legal Aid of Southeastern Pennsylvania for those who meet income guidelines. This information is general and not legal advice; you should consult with a qualified bankruptcy attorney to discuss your specific financial situation and costs.

Bankruptcy law in Allentown, Pennsylvania provides individuals and businesses a legal pathway to address overwhelming debt. The two most common forms of consumer bankruptcy are Chapter 7 and Chapter 13, while Chapter 11 is typically reserved for business reorganizations. Chapter 7, often called liquidation bankruptcy, allows individuals to discharge most unsecured debts such as credit card balances, medical bills, and personal loans in exchange for non-exempt assets being sold by a trustee. Chapter 13, by contrast, is a reorganization plan that allows debtors with regular income to repay a portion of their debts over three to five years, often enabling them to keep their home or car while catching up on missed payments. Chapter 11 is more complex and expensive, generally used by businesses or individuals with debt exceeding the Chapter 13 limits, which as of 2024 are $2,750,000 in secured and unsecured debt. For most Allentown residents, Chapter 7 is appropriate if they have limited income and few assets, while Chapter 13 is better suited for those with steady income who want to protect non-exempt property or catch up on secured debts like mortgage arrears.

Pennsylvania law offers debtors a choice between using state-specific exemptions or federal bankruptcy exemptions, but not both. This election is critical because it determines what property you can keep in a Chapter 7 case. Pennsylvania state exemptions include a homestead exemption of up to $30,000 for real property you occupy, or up to $15,000 if you do not occupy the property. For married couples filing jointly, these amounts double to $60,000 and $30,000 respectively. The state vehicle exemption allows you to protect up to $3,800 of equity in one motor vehicle. Pennsylvania also provides a wildcard exemption of up to $300 in any personal property, plus up to $5,000 of unused homestead exemption for other property. Other notable state exemptions include $300 for wearing apparel, $1,000 for household goods, and $1,000 for books and tools of trade. Federal exemptions, which some Allentown filers may prefer, include a $27,900 homestead exemption, a $4,450 vehicle exemption, and a $1,475 wildcard exemption plus up to $13,950 of unused homestead. The choice depends on your specific assets and equity, making consultation with a bankruptcy lawyer essential to maximize property protection.

The means test is a mandatory calculation that determines eligibility for Chapter 7 bankruptcy in Allentown. This test compares your average monthly income over the six months before filing against the median income for a Pennsylvania household of the same size. As of 2024, the median annual income for a single-person household in Pennsylvania is approximately $63,000, for a two-person household around $78,000, for a three-person household about $95,000, and for a four-person household roughly $115,000. If your income falls below these medians, you automatically pass the means test and qualify for Chapter 7. If your income exceeds the median, you must complete a more detailed calculation subtracting allowed expenses from your income. If the resulting disposable income is less than $100 per month, you still qualify for Chapter 7. If it is between $100 and $167 per month, further analysis is required. If disposable income exceeds $167 per month, you are presumed to have sufficient income to fund a Chapter 13 plan and cannot file Chapter 7. The means test uses IRS standard expense allowances for categories like housing, food, transportation, and healthcare, not your actual expenses, which can make the calculation complex.

When you file for bankruptcy in Allentown, an automatic stay goes into effect immediately, stopping most collection actions against you. This means creditors cannot call you, send collection letters, garnish your wages, repossess your car, or foreclose on your home without court permission. The automatic stay provides immediate relief from creditor harassment and gives you breathing room to work with your bankruptcy lawyer. The timeline from filing to discharge varies by chapter. For a straightforward Chapter 7 case, the process typically takes four to six months. You must attend a meeting of creditors, called a 341 meeting, about 30 to 45 days after filing, where the trustee reviews your paperwork and asks questions about your assets and debts. The discharge order usually arrives 60 to 90 days after the 341 meeting, wiping out eligible debts. For Chapter 13, the process takes three to five years of making plan payments to the trustee, who distributes funds to creditors. Before filing, you must complete a credit counseling course from an approved agency, which typically costs $10 to $50. After filing but before discharge, you must complete a debtor education course, also from an approved provider, costing a similar amount. Both courses are mandatory and certificates must be filed with the court.

The costs of filing bankruptcy in Allentown include court filing fees and attorney fees. The filing fee for Chapter 7 is $338 as of 2024, and for Chapter 13 it is $313. These fees can be paid in installments with court approval, typically in up to four payments over 120 days for Chapter 7 or 180 days for Chapter 13. Attorney fees for a Chapter 7 case in the Allentown area generally range from $1,200 to $2,500, depending on the complexity of your case. Chapter 13 attorney fees are higher, typically ranging from $3,000 to $5,000, because the case involves ongoing plan administration over several years. Many bankruptcy lawyers offer payment plans that allow you to pay attorney fees in installments before filing, though the filing fee must be paid in full or through an approved installment plan with the court. For those with very low income, pro bono resources may be available through Legal Aid of Southeastern Pennsylvania, which serves Lehigh County, including Allentown, and may provide free or reduced-cost bankruptcy services for qualifying individuals. Additionally, some bankruptcy lawyers offer free initial consultations, allowing you to discuss your situation without upfront cost.

Life after bankruptcy involves both challenges and opportunities for rebuilding. A Chapter 7 discharge stays on your credit report for ten years from the filing date, while a Chapter 13 discharge remains for seven years. During this time, you can begin rebuilding credit by obtaining secured credit cards, which require a cash deposit as collateral, and making timely payments. You can also consider credit-builder loans from credit unions or becoming an authorized user on someone else's credit card account. It is important to understand that not all debts are dischargeable in bankruptcy. Student loans are generally not dischargeable unless you can prove undue hardship through an adversary proceeding, which is difficult to win. Most tax debts, including recent income taxes, are not dischargeable, particularly if they are less than three years old or if you filed fraudulent returns. Child support and alimony obligations survive bankruptcy entirely, as do debts for personal injury caused by drunk driving and debts from willful or malicious injury. Debts not listed in your bankruptcy schedules are also not discharged. Credit card debt, medical bills, personal loans, and most civil judgments are dischargeable, giving you a fresh start to manage your finances responsibly going forward.