Bankruptcy Laws for Chapter 11 in Pennsylvania

• Federal courts hold the responsibility of administering bankruptcy laws in the United States. The Bankruptcy Code, enacted by the U.S. court system, stipulates how state governments are to handle bankruptcy cases. Under this Code, Pennsylvania, like all the other states, has the power to make certain amendments specific to its jurisdiction. The state of Pennsylvania has three bankruptcy courts. The eastern district has locations in Philadelphia and Reading. The middle district has offices in Wilkes-Barre and Harrisburg. The western district has offices in Pittsburgh, Johnstown, and Erie.

Chapter 11 Definition

• A Chapter 11 bankruptcy is a type of bankruptcy that allows a reorganization of the debts belonging to a corporation or partnership. The main objective of a Chapter 11 is for the debtor to propose a reorganization plan to keep the business alive and eventually pay all of the creditors over time. Individual business owners can also file for Chapter 11. However, an individual seeking for a restructuring of his debts and a repayment plan usually files for Chapter 13.

Laws on Eligibility

• Some rules regarding filing for bankruptcy vary from court to court. However, laws on individual or company eligibility are uniform for all three courts in Pennsylvania. To be eligible to file for Chapter 11, you must have received credit counseling from an approved credit counseling agency within 180 days before filing.You cannot file for Chapter 11 if you had a bankruptcy petition (in the last 180 days previous to filing) that was dismissed due to your failure to appear before the court. Likewise, you cannot file Chapter 11 if you did not comply with the orders of the court, or if the court dismissed you after creditors sought help from the court in recovering property upon which they held liens.

Petition

• To file for Chapter 11 in Pennsylvania, you must file a petition with the bankruptcy court that is located in your area. You also must present schedules of assets and liabilities you or your company have, a schedule of current income and expenditures, a schedule of executory contracts and unexpired leases (if you are filing for your company) and a statement of financial affairs. If you are filing as an an individual, you need a certificate of credit counseling, evidence of income received 60 days before filing, a statement of monthly net income, any anticipated increase in income or expenses after filing, and a record of any interest you have in federal or state qualified education or tuition accounts.

  If you are filing your petition in the western district of Pennsylvania, you are required to do it electronically. In the eastern district, you must file your original petition and other documents with three paper copies. The eastern district instructs the clerk to accept all filings.

Fees

• You need to pay all required fees by the due dates you were given. If you do not pay your fees on time, the court will dismiss your case. However, in the middle district, you have up to seven days after your initial due date in which to make payment without a dismissal. As of 2010, these fees include a $1,000 case filing fee and a $39 miscellaneous administrative fee.