What is Bankruptcy?

Bankruptcy is intended to give people a fresh start, free of debt. In general, there are two chapters of bankruptcy available to individuals in financial distress. A Chapter 7 is used to discharge or wipe out obligations, but may result in the liquidation of non-exempt assets. A Chapter 13 is a repayment plan that can reduce debt to a manageable level to be paid back over a three- to five-year plan.

Is Bankruptcy a good option for me?

Financial problems can be triggered by unfortunate, unforeseen or even tragic events. Many times, your financial situation is not your fault. If any of these situations sound familiar, bankruptcy may be the solution:

• You have lost a job or had a reduction in income;
• You have incurred medical debt due to illness or accident;
• You are late with credit card payments and are being harassed by rude and unsympathetic debt collectors;
• You are being threatened with legal action, are already being sued or have judgments against you;
• You have fallen behind on mortgage or car loan payments as a result of trying to keep up with credit card payments that carry exorbitant interest rates, possibly to the point of facing foreclosure or repossession of your property;
• You are trying to keep your debts current but are going without many essentials of life to do so;
• You have researched credit counseling, debt consolidation or debt settlement but have been unable to meet the requirements of such plans.

Regardless of the reason for your financial distress, you should not be embarrassed, ashamed or afraid. There is a lot of misinformation out there about bankruptcy. To discuss any of the topics below with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

• Chapter 7 fresh start: The goal of a Chapter 7 bankruptcy filing is to wipe out (discharge) your debts in exchange for a liquidation of certain unprotected (non-exempt) property. In many cases, much or all of your property will be protected (exempt).
• Chapter 13 repayment plan: The goal of a Chapter 13 bankruptcy filing is to repay your debts in monthly installments over a three- to five-year plan. It can be used to defend against foreclosure, allowing you to repay mortgage arrears over time and save your home. It can also be used to reduce certain debts.
• The automatic stay: A bankruptcy filing triggers an order of the court prohibiting all collection activity. This includes creditor harassment, lawsuits including foreclosure actions, and property seizures including bank account freezes, and wage garnishments.
• Chapter 11 business reorganization: The goal of a Chapter 11 bankruptcy filing is to allow a struggling business to continue to operate while creating a plan of reorganization under the protection of the bankruptcy court.

Chapter 7 Fresh Start

What are the advantages of Chapter 7 Bankruptcy?

The decision to file for a Chapter 7 bankruptcy case can be as stressful as the financial problems you are experiencing. You may have spoken to family, friends or even other professionals resulting in a confusing, negative and/or misinformed description of the bankruptcy process. Of course, contacting us is the best way to learn the pros and cons of a bankruptcy filing, but here are some advantages to think about:

• A Chapter 7 filing provides a true fresh start, with all dischargeable debts permanently gone. These include credit card debts, medical bills, and even certain tax obligations.
• A Chapter 7 filing triggers an order of the court prohibiting all collection activity, including harassing telephone calls, threatening letters, lawsuits, entry of judgments, bank account freezes, property seizures, and wage garnishments.
• In most cases, a Chapter 7 can be filed and discharged in a matter of months allowing you to get back on track to rebuilding and repairing your credit quickly.

Will I qualify for a Chapter 7 Bankruptcy?

The Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) went into effect on October 17, 2005 and brought with it certain changes in qualifying for bankruptcy as well as procedural changes. There are still a lot of myths circulating out there about what these changes mean for someone in financial distress. These myths include that bankruptcy relief is no longer available, that bankruptcy can’t be filed if you are working, and that bankruptcy has become so complicated that it is unaffordable. These statements are all untrue.

It is true that BAPCPA requires that a means test be completed to determine a person’s eligibility for filing a Chapter 7 case. The means test starts with a median income determined by the state of your residence and the size of your household. In general, if your income in the six months prior to the bankruptcy filing is less than the median income based on your family size, you qualify to file a Chapter 7 case. Even if your income exceeds the median income, you may still qualify for a Chapter 7 filing. But even if you do not qualify for Chapter 7, a Chapter 13 repayment plan (see below) may be a good option for you.

And while BAPCPA has brought with it additional document requirements and a more complex filing process, that is all the more reason to consult with experienced bankruptcy counsel. Our fees remain affordable.

The bottom line is that bankruptcy is still alive and well, and is often the only way out for many people who are facing a mountain of debt and dealing with debt collector harassment and the threat of lawsuits every day. The fresh start of a bankruptcy discharge will still provide relief to most people struggling with debt.

To discuss qualifying for Chapter 7 and the costs associated with filing in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

Will I lose my property in a Chapter 7 Bankruptcy?

In exchange for having your debts erased, your non-exempt assets can be sold to pay your creditors. We are aware that protecting your property is an important factor in making an informed decision about whether or not to file a Chapter 7 case.

The truth is that once the appropriate exemptions are applied, most people get to keep their property. Equity determines whether you get to keep an asset so depending on the value of your house or vehicle and the amount you owe on the mortgage or loan, you may be able to keep them. Many other assets are also exempt including some cash, retirement plans, life insurance policies and personal property.

We will review your situation and determine if you own any property that could be at risk prior to the filing.

To discuss Chapter 7 in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

Chapter 13 Repayment Plan

What is Chapter 13 Bankruptcy?

In a Chapter 13 bankruptcy we will create a plan for you which will allow you to make one payment each month to repay your debts. These debts can include mortgage arrears, delinquent taxes, missed auto loan/lease payments, credit card balances, medical bills, as well as many other obligations. The monthly payments are made to a Chapter 13 trustee over for a period three to five years. There are many advantages to filing a Chapter 13 case.

What are the advantages of Chapter 13 Bankruptcy?

• Chapter 13 can be used to successfully prevent or stop a foreclosure of your property by allowing you to repay mortgage arrears over time rather than in a lump sum as demanded by the lender.
• Property is never liquidated in a Chapter 13 filing. You will get to keep all of your assets.
• The Chapter 13 plan is administered by the Bankruptcy Court; you are not at the mercy of credit card companies or debt collectors. The Bankruptcy Code determines the amount to be repaid to creditors. Depending on your income and equity in your property, credit card debts may be paid less than the full amount they are owed and with no interest.
• In addition, a Chapter 13 filing enjoys all of the protections of a Chapter 7 filing and stops all collection activity, including harassing telephone calls, threatening letters, lawsuits, entry of judgments, bank account freezes, property seizures, and wage garnishments.

To discuss Chapter 13 in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

The Automatic Stay

A bankruptcy filing triggers an order of the court prohibiting all collection activity. This is called the automatic stay. This can be particularly helpful in a variety of situations that you may be experiencing.

Creditor harassment

The automatic stay will put an end to creditor harassment.

If you missed credit card payments, you are likely receiving threatening letters and intimidating telephone calls from these creditors and their debt collectors. You may be receiving these calls at home, at work or on your cell phone, when you are with family, friends or co-workers. The calls may be getting more frequent and aggressive, catching you when you are trying to get out the door in the morning or at night when you are trying to unwind. This contact can be extremely upsetting and disruptive in your life. A bankruptcy filing under any chapter will stop this collection activity. But even before the case is actually filed, we can provide immediate relief. Once we are hired, we will take these telephone calls and deal with your creditors for you.

To discuss ways to prevent creditor harassment in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

Foreclosure Prevention

The automatic stay will temporarily stop a foreclosure action.

If you have missed mortgage payments and cannot get current on your own, a Chapter 13 bankruptcy will stay the foreclosure action so you can start making your go-forward payments again one at a time and put the missed payments (arrears) into a three- to five-year repayment plan. Once the case is filed and the plan is in place, the lender cannot proceed with the foreclosure action as long as you are making the payments. At the conclusion of the Chapter 13 plan, if you have made all of the mortgage payments as they came due and all of the plan payments, you will be current on your mortgage and the foreclosure lawsuit will be withdrawn.

In the alternative, if you cannot afford to keep your property, a Chapter 7 filing will discharge your obligation to repay the mortgage and let you walk away debt free.

To discuss your options in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

Frozen Bank Account

The automatic stay will prevent seizure of your bank account.

If a creditor has sued you and received a judgment, one way it can collect the money from you is through seizure of the funds in your bank account. The bank receives notice of the judgment from the creditor and is required to freeze all of your bank accounts. The bank will notify you of the freeze but it may not be for a few days. In the meantime, if you attempt to withdraw funds, no money will be released to you. And if any checks are presented for payment, they will be returned for insufficient funds. The creditor may be willing to work out a payment plan with you in exchange for releasing the account. However, if you cannot comply with the creditor’s settlement demands, ultimately the funds will be seized by the sheriff and turned over to the creditor.

A bankruptcy filing will trigger the automatic stay which requires the bank to unfreeze your funds but any funds that have already been seized will not be returned. Therefore, if you have a frozen bank account or believe it will be frozen shortly, you should contact us immediately.

To discuss protecting your bank accounts in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

Wage Garnishment

The automatic stay will prevent or stop a wage garnishment.

If a creditor has sued you and received a judgment, another way it can collect the money from you is through garnishment of your wages. Your employer will be contacted by the sheriff and advised of the debt that you owe to the creditor. Your employer is then required to seize up to ten percent of your gross income each pay period and turn it over to the creditor. This is going to make a difficult situation much worse.

A bankruptcy filing will trigger the automatic stay which will prevent a wage garnishment from going into effect or stop one that is already in place. While the bankruptcy filing will immediately stop a garnishment, any funds that have already been taken before the bankruptcy filing will not be returned. Therefore, if you income is already being garnished or even if you are simply being sued, you should contact us immediately to discuss your options.

To discuss protecting your salary from wage garnishments in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

Chapter 11 Business Reorganization

Bankruptcy is Available for Businesses As Well

There are many reasons why business fail, or otherwise struggle with overwhelming debt. Some failing businesses would be otherwise successful if only they could eliminate certain debts, or at least delay the payment of these debts. Chapter 11 bankruptcy can accomplish both of these things.

A Chapter 11 business reorganization is too complex to discuss at length here. To discuss saving your business with a Chapter 11 bankruptcy in more detail with an experienced bankruptcy attorney, please contact us and schedule a free, in-person consultation at either our Garden City or Hauppauge office.

Call us today and educate yourself.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.