FAQs on Bankruptcy

FAQs

1. What is Bankruptcy?

Bankruptcy is a legal proceeding in which an individual who is unable to pay his or her financial bills is granted relief from creditors by the federal court. Filing for bankruptcy immediately puts a stay on all creditors seeking to collect their debts from you or at least till your financial issues are sorted out according to legal procedures. As per Long Island Bankruptcy Law, in a Chapter 7 case most debts can be eliminated while in a Chapter 13 or Chapter 11 case, the debts can go for a reduction or cure under a reorganization plan. The best way forward should be decided in consultation with a New York Bankruptcy Lawyer.  

2. How does Bankruptcy affect me?

Bankruptcy dispenses with the lawful commitment to pay the most or entirety of your debt. This provision "discharge of debts is intended to give the debtor a fresh beginning on the financial front. It prevents foreclosure on your house and presents you with a chance to catch up with missed installments. It re-establishes or avoids disconnection of utility services. New York bankruptcy Law also allows for a challenge to be mounted against claims of creditors who are fraudulently trying to extract more than the amount owed.

3. What doesn't Bankruptcy change?

Bankruptcy, under New York bankruptcy Law, is definitely not the cure all for all financial stress nor it is a general solution for anyone in high debt. As per Long Island Bankruptcy Law, It is not possible to eliminate the claims of a secured creditor who has taken a mortgage on property as a security for a loan. The creditor can be forced to take structured payments over time or be prevented from asking for money if a property is already taken. Bankruptcy litigation also cannot eliminate certain special debts like child maintenance, fines related to criminal cases, alimony, divorce related payments and certain Govt. taxes.

4. What are the options other than bankruptcy?

While declaring bankruptcy is chosen by debtors in genuine issues involving financial stress and overburdening, financial insolvency is not always the only option. Creditors can be reached for out of court settlements, where the loan amount can be restructured and payments can be rescheduled. Negotiations are often the preferred way for unsecured debts like credit cards, where successful negotiations can sufficiently lower the payable amounts. Bankruptcy litigation lawyers often negotiate most debts on behalf of clients, including credit card, mortgage, tax and other debts.

5. What does it cost to file for bankruptcy?

The charges for bankruptcy under Chapter 7 is $306, while for that under Chapter 13 is $281 for both an individual and a married couple. The court may allow for the payment of this fee in installments if the entire amount is not available upfront. The charges of Long Island Bankruptcy Lawyers are payable as mutually agreed upon.