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Are there alternatives to filing for bankruptcy?
Yes, there are many alternatives depending entirely
upon your personal financial affairs. To discuss
viable options, please complete the Free
Evaluation or call 716-573-4980
Can my assets be protected?
Generally speaking, bankruptcy law provides
protections (known as exemptions in bankruptcy law) of certain
assets or items of property that you own. It depends on the
specific asset as to whether it is protected. Bankruptcy law
permits debtors to protect assets based on the necessity of
the asset. Note: If there is an asset not qualified for an
exemption, it may still be protected. To learn more about
specific assets and how to protect assets, please review the
questions below or refer to the Free
Evaluation page to have your specific questions answered.
How is my Property Affected by filing for Bankruptcy?
Typically, your house can be protected. It
depends on the amount of equity of in your home. Bankruptcy
law in New York affords a $50,000.00 exemption in equity to
each debtor. Generally, equity is defined as the value of
your asset minus the loan secured by the asset. For example,
if you are the sole-owner of a home and the value is $100,000.00
with a mortgage of $50,000.00, you have $50,000.00 of equity
in your home. Using this example, your home would be protected
under bankruptcy law. Also, in the event you have more than
$50,000.00 equity in your home, you may be eligible to file
for Chapter 13 bankruptcy which would protect your home as
well.
What about my car, can I protect it in Bankruptcy?
Generally, your automobile will be protected
if you file for bankruptcy. New York law allows a $2,400.00
exemption of equity in a automobile. This means that if you
own a vehicle and the value is not greater than $2,400 over
the secured loan, your vehicle will be protected. If your
value exceeds the $2,400 equity amount, your vehicle can still
be protected under a buy-out option or a Chapter 13 bankruptcy.
If it is determined that your car cannot be protected and
you owe more than the car is worth, you may be able to reduce
the loan amount to the current value of the car.
What debts are included in Bankruptcy?
In most situations, all of your unsecured debt
will be cancelled (discharged) in bankruptcy. Unsecured debt
consists of credit cards, store cards, medical bills, personal
loans not secured by assets, etc.
What about Child Support and Alimony?
Generally, divorce obligations will not be
discharged in bankruptcy. It depends on the particular obligation.
Child Support and Alimony will not be likely be discharged
by the court. If you have other unsecured debt that makes
it difficult to pay Child Support or Alimony, the bankruptcy
could eliminate those responsibilities instead, making the
Divorce Obligations easier to pay.
What about Student Loans, can they also be cancelled?
Contrary to popular belief, student loans can
be discharged in bankruptcy. However, it can be quite difficult.
To qualify for student loan discharge, one must meet a hardship
test created by the Court. This test has a very high standard,
but not impossible to meet. The answer depends on your particular
circumstances. For more specifics and to have your circumstances
evaluated, fill out the Free
Evaluation.
Can I discharge my Tax Obligations?
Typically, certain tax debts can be discharged
in bankruptcy. This will depend on how old the tax debts are
and whether the taxes were timely filed. Generally speaking,
if the debts are three years old, they may be discharged.
This does not necessarily occur in all situations.
Can I transfer my property to family and/or friends?
Transfers of property within one year of filing
bankruptcy can be cancelled by the Bankruptcy Court. However,
the Court can look back farther than one year under certain
circumstances. This may or may not be problematic depending
on the asset and its value.
Can I stop a Wage Garnishment?
Typically, wage garnishments will be stopped upon the filing
of a bankruptcy petition. In other words, when a bankruptcy
is filed, all creditors must cease from taking any action
against you or your assets. Creditors are refrained from any
collection activity on your account. This includes: phone
calls, lawsuits, mailings and any other form of collection.
Can I stop Foreclosure Proceedings?
Foreclosure sales will be prevented upon the
filing of bankruptcy as long as they are filed timely. It
may be possible to file bankruptcy on the eve of a foreclosure
sale to prevent the sale. However, this is not recommended
as bankruptcy planning tools may not be implemented based
on the shortage of time. It is crucial that you contact an
attorney to plan properly either before or at the onset of
a foreclosure proceeding.
Can I stop Nagging Creditor Phone calls and other correspondence?
Nagging creditor calls must cease upon the
filing of a bankruptcy petition. This means that those harassing
creditors are prevented from any contact with you once your
petition is filed. As a matter of fact, once you retain an
attorney, creditors must cease communication upon notification
of the retention.
I own a Small Business, do I qualify?
Small businesses do qualify for bankruptcy protection.
What if I have High Income?
High income does not bar an individual from filing for bankruptcy.
It may be taken into consideration when seeking to qualify
for a chapter 7 bankruptcy. However, high income does not
necessarily mean one has high disposable income. A typical
high wage earner has high expenses. This means that a high
wage earner may not be in a better financial position than
a low wage earner.
Will my spouse be affected if I file?
Typically, if you are married and the debt
is entirely in your name, your spouse will not be affected
by your filing for bankruptcy protection. It is not uncommon
for one spouse to file for bankruptcy while the other chooses
not to do so.
How long does the process take?
It varies by state, and also varies based on
whether it is a Chapter7
or Chapter13 filing.
A Chapter 7 filing will typically take 3 months from filing
to discharge. In Chapter 13, the legal proceedings will take
2 to 3 months as well, but the discharge does not occur until
3 to 5 years after filing date.
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