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Chances are bankruptcy is not something you’ve ever given much thought to. When you find yourself in the position of needing to find a way out from under a load of debt that is no longer manageable, that can create mountains of stress and many unanswered questions. We’ve compiled a list of some of the most common questions regarding bankruptcy here. If you don’t find the answer you’re looking for, or if you’re ready to talk with someone and start the process, call us today for a FREE consultation at 718-304-8328.
Bankruptcy is a chance for a ‘fresh start’ when your finances are in an unsustainable position. By ‘discharging’ your debts, it releases you from the overwhelming burden of all or most of your debt. It can be used to stop foreclosure on a house or the repossession of a car or other property and may allow for the return of property already seized. It can put an end to bank account freezes, harassment and other forms of intimidation by creditors and can halt wage garnishment under some circumstances.
Bankruptcy is not a ‘golden ticket’ to be freed from debt. Generally if a debt is ‘secured’, meaning a lendor granted a mortgage or has a lien on the property, you must either return the property or find a way to continue to pay the loan over time (as in a chapter 13 filing). It is also not permissible to use bankruptcy for the purposes of no longer paying child or spousal support, taxes, student loans or criminal fines. Bankruptcy also does not free co-signers of a loan of their responsibility to cover the debt in the event that you are unable to do so. For further clarification of what bankruptcy is not designed to do, contact our offices to speak with a knowledgeable attorney today.
Chances are good that if you’re considering filing for bankruptcy, you’re already behind on a number of payments. Therefore, your credit has already been affected and a bankruptcy will not make this any worse and may actually help the situation. A bankruptcy filing will stay on your credit report for ten years, but definitely does NOT mean that you can’t get credit or even make major purchases, such as a house or car, during that time. On the contrary, it may actually make it easier because your balance owed will show as zero once you have filed for bankruptcy. The more major issue may be the interest you will have to pay during the time that your credit score is affected.
Bankruptcy laws were changed in 2005, leading many people to believe that they could no longer qualify to file for bankruptcy. This is not accurate, and the majority of people who need to are still able to file either a chapter 7 or chapter 13 bankruptcy, depending on their circumstances. To file for chapter 7, you must meet the requirements put in place by the ‘means test’ which judges whether, relative to your income and expenditures, if you are considered to be able to repay some of your debt. For chapter 13, you generally must have a regular source of income and not exceed the debt limit. Our Bronx bankruptcy attorneys can help answer additional questions and help you determine which type of filing you qualify for. Contact us today at 718-304-8328.
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