Bankruptcy Rules

It can be a daunting and stressful process to declare bankruptcy, but knowing the rules and having on your side an experienced bankruptcy attorney can help lessen the pains.

Chapter 7 vs Chapter 13

Chapter 7 bankruptcy will write off most unsecured debts within 90 days of filing. The bankruptcy will stay on your credit report for 10 years, and while your debts are forgiven, you may have to sell off some property and those proceeds will be distributed to creditors.

Chapter 13 bankruptcy will establish a repayment plan (three or five years) to repay the debts. This will remain for seven years on your credit report, but you’ll get to keep all your property.

When does each make sense?

Chapter 7 can make sense if you no assets (house, car, etc.) to lose, but you may be forced to sell valuable belongings. Chapter 13 is recommended for those who fell behind on payments thanks to a job loss or medical problem, but can pay if given time.

Credit: What happens and how do I rebuild?

You’ll get a notation on your credit report of filing for bankruptcy. Your credit score will most likely take a hit, but how bad depends on what your score was prior to filing. This won’t be forever the case.

Rebuilding credit might be troublesome for filers, as credit got them into this predicament after all. To rebuild, you’ll need to make sure the accounts on your report are all at a zero balance. Then, get credit cards (consider secured ones) and pay them off every month. Another way to rebuild may be to ask a friend or relative if they’ll let you piggyback on their credit.

Don’t go into bankruptcy alone. Kanzer and Associates has a qualified New York bankruptcy attorney that can help you. Enlist our services today by visiting www.KanzerLaw.com. 

Bankruptcy Code

The federal bankruptcy code can be often hard to understand. It’s important (and in some cases required) that you hire a competent bankruptcy attorney who can guide you through the process.

Does bankruptcy code require my belongings to be liquidated?

Most of the filings are liquidations, and they come under Chapter 7. Chapter 7 bankruptcy usually involves the trustee to sell all non-exempt assets, and the funds made are distributed among the creditors. For individuals, the court might discharge any of the remaining debt. For businesses, the operation is shuttered.

What about reorganization?

Creditors often have a better chance for being repaid under Chapter 11 and Chapter 13. Chapter 11 bankruptcy is used more by businesses and those with high incomes or complex debts. Chapter 13 bankruptcy is more for individual consumers. Either way, debtors who file under these chapters agree to repay the debts according to a court approved schedule.

How about voluntary and involuntary bankruptcy?

Most of the filings are filed voluntarily by debtors. After you file, debt collectors are forbidden to contact you and repayment is decided by the court. Creditors, however, have the option of forcing the debtor(s) into involuntary bankruptcy, but this is done when a number of creditors petition the court, which will determine whether they are entitled to relief.

New York bankruptcy attorney Michael Kanzer of Kanzer and Associates can assist you with all these issues. Enlist his services today by visiting www.KanzerLaw.com. 

NY Bankruptcy Facts

If you’re thinking about filing for bankruptcy, keep in mind the following facts:

• Chapter 7 is debt liquidation, while Chapter 13 is debt reorganization
• If you’ve filed for bankruptcy for, it’s best to remember that certain waiting periods exist
• It IS possible to save your home from foreclosure and avoid having your car repossessed
• Debt will not just go away
• You will have the opportunity to improve your credit score and obtain credit

Need a NY bankruptcy attorney? Get in touch with Michael Kanzer & Associates by visiting www.KanzerLaw.com. 

NY Bankruptcy FAQ

Here are some of the questions we get about NY bankruptcy:

What is Chapter 7 bankruptcy?

Chapter 7 is known commonly as a straight bankruptcy or liquidation proceeding, where the debtor turns over all non-exempt property to the trustee to convert into cash distributed to all creditors. In most of these cases, the bankruptcy filer is without any assets, so this will give the person a quick fresh start.

What are the most common reasons for filing Chapter 7?

Unemployment is the most frequent, followed by large medical expenses, overextended credit and martial problems among other large, unexpected expenses.

What is Chapter 13 bankruptcy?

Chapter 13 is a reorganization type of bankruptcy filed by persons who want to pay off debts within three to five years. This appeals to those who have non-exempt property they want to keep, and is available only to those with predictable income sufficient to pay reasonable expenses.

Will I stop getting harassed by creditors?

By law, they have to cease once documents are filed. The creditors are prevented from continue or file any lawsuits or garnishees demanding payments.

Will my utilities be affected?

Electric companies and other providers of public utilities cannot take disruption actions, such as refusing or cutting off service, because you filed for bankruptcy. They may, however, require a deposit for future services.

NY bankruptcy lawyer Michael Kanzer can help you with all your bankruptcy matters. Contact his office today by visiting www.KanzerLaw.com. 

Bankruptcy: Things To Remember Before Filing

Filing for bankruptcy is a big step for anyone, and it’s not one that should be taken lightly. You don’t want to rush into the process with considering all the consequences. It will have effects on your credit, and there are effects that may not fit every debtor. There are several things you must remember when filing for Chapter 7 or Chapter 13.

Co-debtors

These are the people who have signed with you on a debt, like a mortgage or car loan, and are often close family and friends. If you’re filing for bankruptcy, these co-signers are now left in a tough circumstance, as they may be solely responsible for these debts.

Do you want to kill your debt as quickly as you can? Chapter 7 bankruptcy will assist in this effort, but your co-debtors won’t be protected, leaving creditors able to collect from them. You can protect your friends and family with a Chapter 13 bankruptcy repayment plan, but the downside is you are guaranteeing to creditors a 60-month schedule to pay to them your disposable income.

Playing favorites

If you have one debt that’s more overwhelming than the rest, it might be easy to play favorites. Maybe you have $10,000 in credit card debt that’s leaving you in the lurch, or you owe someone a huge loan. Unsecured creditors include credit card companies and those who lent you money with no collateral backing, like a car loan or mortgage.

Having a bankruptcy attorney in these situations is immensely important, as it will help you to avoid accidental fraud. If you decide not to include the huge loan in your filing, so it won’t be discharged, this could lead to your case being discharged. All your records will be reviewed, and there is nothing to stop you from repaying a discharged debt.

Non-discharged

If your aim is to get rid of all the debt you can, you must know what types of debts you have. Mortgage payments, for example, are secured debts and must be repaid. Other secured debts include taxes, student loans, child support and alimony, among others. If these make up the bulk of your debt, filing for bankruptcy won’t assist you greatly.

Need a New York City bankruptcy attorney? Get in touch with Kanzer & Associates by visiting www.KanzerLaw.com.  

Bankruptcy Advice - Keeping Your Car

One of the biggest reasons many don't file for bankruptcy is concern over losing their home or car. Your car is one of your most important assets. It gets you to and from work, directly assisting you in earning a living. To lose it would mean to lose the main tool toward your financial solvency.

Personal property exemption rules in New York changed earlier this year. The biggest change was applied toward real estate, but rules for properties like automobiles also changed, including how much equity in a car a person can keep, as well as whether the item is applicable in bankruptcy court.

Previously, if your automobile had no debt on it and you filed for bankruptcy, it could be liquidated. Now, the state offers more flexibility when it comes this asset and bankruptcy. In most cases, you will not lose your car when you file. Bankruptcy serves to help individuals recover from debt, while not losing the items for which they worked hard.

Every situation, however, is different. Bankruptcy attorney Michael F. Kanzer of Brooklyn NY will help you to keep your assets, while eliminating the debt weighing you down. Contact him today by visiting www.KanzerLaw.com and requesting a free bankruptcy consultation.

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