If you are considering filing for bankruptcy in the State of New York, you will have many bankruptcy questions. On this page you can find answers to the top bankruptcy FAQs. If you have more bankruptcy questions, contact us at (646) 707-2226.
Should I file for bankruptcy?
Do you feel like the calls from your creditors never stop? Are you afraid you are going to lose your home? Do you feel overwhelmed with all the credit card bills you keep receiving? Are you in debt up to your eyeballs? You are not alone. Today a record number of consumers are seeking debt relief due to the residential mortgage foreclosure crisis and high unemployment.
Can I get a Fresh Start?
Bankruptcy is a choice that may help if you are facing serious financial problems because it gives debtors in your situation a fresh start. You can cancel your debts, stop collection calls, law suits and garnishments. When you bankruptcy is complete most of your debts will be “discharged”. This means they are canceled and you are no longer legally obligated to pay them. However, the following debts are generally not cancelled: child support, student loans, most taxes and some others.
What is Chapter 7 Bankruptcy?
In Chapter 7 bankruptcy, you fully disclose your property, debts, and financial activities over the past several years. Chapter 7 bankruptcy cancels most types of debt, but you may have to let the bankruptcy trustee sell you nonexempt property for the benefit of your creditors. Three to four months later you receive a discharge of most types of debts and emerge with all or most of the property you owned going in.
What is Chapter 13 Bankruptcy?
In Chapter 13 bankruptcy, you also propose a three- or five-year plan under which you typically must repay certain types of debt in full (such as back child support) and usually some portion of your unsecured debt. Chapter 13 provides some remedies that are not available in Chapter 7. For instance, a debtor has an opportunity to pay off missed mortgage payments over the life of the plan.
What is an Automatic Stay?
Filing you bankruptcy petition instantly creates an “automatic stay” that requires creditors to stop all collection efforts. Some creditors are not affected by it and others can get it lifted as long as they get the judge’s permission first. The automatic stay ensures that the trustee – not your creditors – will be responsible for ultimately deciding what to do with your property and how the proceeds will be divided.
What happens after bankruptcy?
Once you receive your bankruptcy discharge, you are free to resume your economic life without reporting your activities to the bankruptcy court unless withing 180 days after your filing date you receive an inheritance, insurance proceeds, or proceeds from a divorce settlement. You have a duty to report those assets to the trustee.
You cannot file a subsequent Chapter 7 bankruptcy until eight years have passed since your last filing date. You can file for Chapter 13 bankruptcy any time but cannot get a Chapter 13 discharge unless you file at least four years after you filed the earlier Chapter 7 bankruptcy.
What will happen to my credit score?
When you file for bankruptcy, you will have to spend only the money you have. You will have no other option because at first it will be difficult to get credit. However, let’s think of it not as a problem but an opportunity to learn to live credit free and become financially responsible. What’s so bad about that?
What kind of debts survive bankruptcy?
Certain debts will not be discharged in bankruptcy. For example, back child support and alimony, student loans, government fines, tax arrearages, certain court judgements, etc.