Get a Fresh Start - Bankruptcy Law in the State of New York
Bankruptcy gives debtors a fresh start on their finances. A Chapter 7 bankruptcy cancels most types of credit card debts, medical and attorney bills, and personal loans. It also stops collection calls, lawsuits and garnishments. However, you will have to disclose your property, debts, expenses, and transfers of property you made over the past several years. The bankruptcy trustee may sell you nonexempt property for the benefit of your creditors.
In Chapter 13 bankruptcy, you will need to propose a three- or five-year repayment plan. You will have to repay some of your debts in full and some portion of your unsecured debt. Chapter 13 provides some remedies that are not available in Chapter 7. For example, Chapter 13 allows a debtor to pay off missed mortgage payments over the life of the plan.
Once you receive your bankruptcy discharge, you will be free to resume your economic life. However, bankruptcy law requires you to report any inheritance, insurance proceeds, or proceeds from a divorce settlement you receive within 180 days after you filed for bankruptcy.
It is also important to understand that some debts will not be discharged in bankruptcy. For example, back child support, alimony, student loans, government fines, and tax arrearages will survive bankruptcy.
At first, it will be difficult for you to get credit after you file for bankruptcy. However, it is a small inconvenience when compared to the benefit of shedding all or most of your existing debt. Furthermore, cutting up your credit cards offers you the opportunity to learn to live your life within your means.