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NYC Chapter 13 Bankruptcy Lawyers

March 7, 2021 NYC Bankruptcy Lawyers

Bankruptcy can be an unpleasant event, but with the right background information, you will feel much better about the process. Bankruptcy is a way for people who have accumulated a lot of debt to restructure that debt. It can lead to new payment plans or debt forgiveness for you, although there are likely negative consequences as well, which might include the loss of assets and a sharp decline in your credit score. There are two main types of bankruptcy than individuals will face: chapter 7 bankruptcy and chapter 13 bankruptcy. Both types involve discharging debt, but they differ in the type of debt and income that the people who go through it have.

The key idea behind bankruptcy is that sometimes, for many reasons, people wind up with debt that is simply too large for them to ever feasibly pay off. They need to go into bankruptcy. This is a process where the person alerts whoever has lent them money that they are insolvent and that everyone needs to come to some kind agreement about how to pay back the money, because it is impossible to fulfill the original contracts governing the loans. Bankruptcy is a formal, legal process that involves a court and bankruptcy judge overseeing the negotiations between the creditors and the debtor.

During bankruptcy, the debtor needs to show the creditors that they really cannot afford to pay the loans. During the process, creditors are prohibited by law from continuing to try to collect their money- they need to wait until all parties work out a payment plan.

Chapter 13 bankruptcy is meant for people who have large, secured loans. These are loans that have some kind of collateral, like mortgages, which use the house as collateral. Chapter 13 bankruptcy is appropriate for these loans because it can protect the person’s assets from being taken away. Chapter 13 is also suitable for people who have a meaningful income: people who do not make enough money must file for chapter 7 instead of chapter 13. There are also limits on how much debt a person can have when they file for bankruptcy: $383,175 in unsecured debt or $1,149,525 in secured debt. Additionally, when it comes to working out the payment plan itself, the plan must not take longer than 5 years to complete. Generally, it will be between three and five years.

The objective of chapter 13 bankruptcy is for the debtor to come out on the other side with their assets intact and with a plan in place to pay down their debt. This is particularly useful when some of the debt is a mortgage, because that allows the person going through bankruptcy to keep their house. In addition, although this negatively affects the credit of the person going through bankruptcy, the bankruptcy will come off that person’s credit report seven years after they declare. They will need to spend much of that time paying back their debt anyway, so they should not need much in the way of credit access.

While Chapter 13 bankruptcy is unpleasant, it is a necessary evil. It lets people make it through excessive debt without having to lose their homes. Chapter 13 bankruptcy is a complex legal process, so it is not recommended that anyone go through it without the help of an attorney.

We are an experienced and professional law firm in New York specializing in bankruptcy. Our combined decades of experience has shown us many different kinds of bankruptcies, so we are sure to have the knowledge that can help you get through your own Chapter 13 bankruptcy in the best possible shape. We devote all of our resources to protecting your interests in court. We know both the law and the way it is typically enforced, so we understand how to help you work with the court. We understand how difficult and trying an experience bankruptcy can be, and you shouldn’t need to have to negotiate the complexities of the law on your own while you also defend your assets in front of a judge. If you work with us, we can be your guide as you move through the process as well as strong advocates for your property. If you need to declare bankruptcy, don’t give up hope. Usually, people come out of bankruptcy and put themselves on the path to be in better financial shape than before.



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