Consumer Bankruptcy Lawyer in White Plains
Individuals and couples who are overwhelmed by debt during these difficult times may need to consider whether filing a personal bankruptcy is the right step to seek relief. Bankruptcy is an legal option that should be considered by anyone drowning in unmanageable debt.
At the White Plains bankruptcy law firm of Michael H. Schwartz, P.C., we understand the financial hardship that many hardworking people in New York City and Upstate New York are experiencing. Personal bankruptcy is a tool provided by law to help people make a fresh start. Thousands of New Yorkers and hundreds of thousands of Americans seek bankruptcy protection every year.
If you are dealing with debt that leaves you feeling like there is nowhere to turn, turn to Michael H. Schwartz, P.C. Let a knowledgeable bankruptcy lawyer explain how a personal bankruptcy you can help you move toward a more financially stable future. We can help you obtain debt relief, including an immediate end to the calls from creditors and debt collectors. Contact us for a free consultation.
What is Personal Bankruptcy?
A personal bankruptcy is a bankruptcy filed by an individual or couple seeking a discharge of unmanageable consumer debt such as medical bills, credit card bills and other personal debt. The federal Bankruptcy Code offers two main approaches to personal bankruptcy—a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Each type of personal bankruptcy has different eligibility requirements such as how much regular income you have and how much debt you have amassed.
What is Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy, also known as a straight bankruptcy, is the most commonly used type of bankruptcy outlined in federal law. People generally file for bankruptcy when they conclude they have no way of paying their outstanding debts. This often occurs after a financial blow, such as the loss of a job, a divorce, or the impact of medical costs after a major illness or traumatic injury.
By filing for bankruptcy under the Chapter 7 rules, the individual may obtain some immediate relief. Once a filing is accepted, creditors are notified and are required to halt all collections activity, including foreclosures, lawsuits and wage garnishments. Certain kinds of debt may be discharged by the court in a Chapter 7 bankruptcy, including:
- Medical bills
- Utility bills
- Credit card debt
- Back rent
- Personal loans
- Some government benefit overpayments.
However, certain types of debts cannot be discharged. They include:
- Child support
- Certain types of taxes
- Student loans
- Loans owed to or guaranteed by government agencies under specific statutes
- Drunk driving debts
- Debts that were not discharged in a previous bankruptcy
- Any debts incurred by willful and malicious behavior.
To pay these debts, the individual is required to sell certain assets. However, the law protects the individual in debt by exempting many possessions from the sale of assets. When filing Chapter 7 bankruptcy, you will be allowed to keep your:
- Car or truck (up to a certain value)
- Jewelry (up to a certain value)
- Major appliances
- Retirement accounts/pensions
- Business tools.
The proceeds from the sale of other assets may be distributed to creditors.
What is Chapter 13 Bankruptcy?
Another type of personal bankruptcy is a Chapter 13 bankruptcy that involves a reorganization or adjustment of your debts. There are certain criteria that must be met to qualify for a bankruptcy reorganization.
A Chapter 13 bankruptcy is available to individuals who have regular income and an ability to pay some debts. If you have monthly income and have some money to pay debts, you may be required to pursue a Chapter 13 bankruptcy rather than a Chapter 7 filing. Another name for this type of bankruptcy is a wage earner plan.
Under a Chapter 13 personal bankruptcy, an individual or couple proposes a plan to pay all debts or a portion of debts over a period of three to five years. If you comply with the terms of the repayment plan, the court may grant a discharge of certain debts.
How do I to Declare Personal Bankruptcy in New York?
Before you can file for bankruptcy in New York, you have to complete a credit counseling course and obtain a credit counseling certificate, which is valid for six months. This can be done online or over the phone with a counseling agency on the government’s approved list. There is a fee of about $15 to $40.
A bankruptcy case begins with filing a petition with the bankruptcy court serving the area where you live. In addition to the petition, you must also file with the court:
- Schedules (lists) of assets and liabilities
- Schedules of current income and expenditures
- A certificate of credit counseling
- Records of any interest in education or tuition accounts
- A statement of your current financial affairs
- A schedule of current leases and executory contracts (agreements under which an obligation(s) remains to be fulfilled by either party)
- A schedule of exempt property
The court will appoint an impartial bankruptcy trustee to oversee your case. You must provide the trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case.
If you’re married, you must include a description of your spouse’s income and any property or debts that you own jointly, even if your spouse is not a party to the bankruptcy filing.
The trustee’s task is to make sure your creditors are paid as much as possible of the debt you owe them. The trustee will hold a meeting of your creditors at which you will answer questions under oath about your property and other financial affairs. This may be the only time you will have to go to bankruptcy court.
What Happens If I Declare Personal Bankruptcy in NY?
Filing a personal bankruptcy requires creditors to stop calling you to try to collect on debts and it protects your house from foreclosure proceedings.
While a discharge of debt under a personal bankruptcy offers relief, it also will damage your ability to obtain credit for a period of time. It is important to understand that.
A bankruptcy will likely reduce a good credit score to within “fair” range or a fair score to “poor,” which makes it difficult to get a loan or borrow money at reasonable interest rates. A bankruptcy will stay on your credit reports for up to 10 years.
Re-establishing credit after bankruptcy can take place right away.
You need to create a new record of financial responsibility that indicates to lenders that you can handle credit responsibly. Because you are making a fresh start, this is a goal that is within your grasp.
We can help!
How Can a Personal Bankruptcy Lawyer in White Plains, NY Help Me?
A personal bankruptcy lawyer at Michael H. Schwartz, P.C. can meet with you to determine whether bankruptcy is right for you. We can help you compile the financial documents and statements required as part of a bankruptcy petition and ensure everything is complete and accurate. We will work with you to answer your questions and ensure that you understand how your personal bankruptcy case is progressing.
Michael H. Schwartz, P.C. provides experienced and compassionate legal services to clients in New York who are in a position to benefit from the provisions of U.S. bankruptcy law. To arrange a free initial consultation with a NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (855) 637-1834 or contact us online. We serve clients across New York but primarily from Putnam, Westchester and Rockland counties and throughout the Hudson Valley area.