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Bankruptcy

Let's work towards a fresh financial start.

Filing for Bankruptcy is never an easy choice. Bankruptcy is the legal means of getting out of your debts. It is your constitutional right to file. Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court. A petition may be filed by an individual, by spouses together, or by a corporation or other entity.

Yes, they have toughened the law since 2005, but the vast majority of cases still are filed under Chapter 7. Chapter 7 is liquidation where you are allowed to keep certain exempt property (see Exemption Chart for a full discussion). If you do not qualify for Chapter 7, then Chapter 13 whereby you must pay back a portion of the debt you owe will be chosen.

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The hardest part is making the decision to file. Often time the case decision to file is when things are at their worst: a bank account is frozen, or wages or about to be levied. Bankruptcy is often caused by unemployment and uncovered medical bills. People often worry that they will never be able to get credit again. This is not true. Since bankruptcy has become so common, banks have developed programs for people who have filed. I am often asked several years after the bankruptcy for a copy of the file as the client is now purchasing their first house. So bankruptcy is not the end, but a fresh start.

Whether in New York or any another state, Bankruptcy Law is a federal law designed to assist individual consumers and businesses facing financial difficulties. With respect to consumer debtors, the goal of a New York bankruptcy lawyer is to help individuals get beyond their financial turmoil and obtain a fresh start.

Filing bankruptcy in New York involves a bankruptcy lawyer preparing a petition that is to be filed in Federal Bankruptcy Court. The petition contains information concerning an individual’s assets, debts, creditors, monthly income, monthly expenses and financial information. The debtor must include all of its creditors in the petition. Upon the filing of a petition by NYC bankruptcy lawyers, the Federal Bankruptcy Court grants the debtor with an automatic stay. The automatic stay is a provision in the bankruptcy law that prohibits creditors from harassing debtors. Specifically, creditors are prohibited from attempting to collect money or obtain property, starting or continuing lawsuits or foreclosures, freezing bank accounts and garnishing a debtor’s wages. In addition, creditors can no longer make threatening phone calls or send collection letters to a debtor.

For a debtor that is married, it is not required that their spouse file bankruptcy also. Rather, any decision concerning a potential joint bankruptcy filing should be evaluated on the circumstances of a particular case at issue.

An individual’s bankruptcy filing can be reflected on their credit report for up to ten years. That does not mean, that an individual will not obtain credit again. Many lenders in the credit card and mortgage industry do not automatically disqualify an applicant because they previously filed bankruptcy. In addition, it is important to note, that if someone is behind on their bills their credit rating may already be poor.

Chapter (7):Life has a way of unsettling the best-laid plans. Sometimes, dealing with unforeseen circumstances becomes the norm rather than the exception. Even the most financially-responsible people among us can be overwhelmed by the costs arising from an accident, an illness, a loss of employment, a reduction of hours at work, a spike in interest rates, a loss of overtime wages, a bill for an unexpected repair job, or some other change in circumstances.

Chapter (11): In today’s volatile economy, many business owners, small and large, find themselves overburdened by financial difficulties. Under federal law, a person — typically a business or partnership — may attempt to suspend their credit obligations by filing a claim under Chapter 11 of the United States Bankruptcy Code. Usually, a person who files for debt relief in New York under Chapter 11 retains control of their assets and possessions while their enterprise undergoes restructuring. During this time, any litigation that has been brought against the business owner, who under Chapter 11 is referred to as the debtor in possession, receives an automatic stay — or, in other words, is placed on hold until the claim has been resolved. A debtor in Chapter 11 may continue to operate its business while the court proceedings are pending.

Chapter (13): The topsy-turvy economic climate of these past few years has made it increasingly tough for individuals and families to maintain their financial footing. Unforeseen circumstances (accidents, medical issues, repair bills, etc.) can wreak havoc on even the most carefully prepared budgets. What’s worse is that things like late fees, hiked interest rates or legal troubles can make getting financially back on track seem nearly impossible. Truth be told, sometimes a person really does need a second chance to take control of his or her financial situation.

Bankruptcy can be started with an initial free ½ hour consultation to see if you qualify and then determine the complexity or simplicity of your case. Paperwork to remember to bring to the initial appointment should include:

  • Photo Id ( Driver’s License or State Issued ID)

  • Social Security Card

  • Recent Paystub

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