Exactly what is bankruptcy?
Bankruptcy is a legal proceeding provided by federal law that allows those who are unable to pay their bills to obtain a fresh start. Included in the U.S. Bankruptcy Code are two options for individuals in financial trouble. Chapter 7, also called straight bankruptcy, and Chapter 13, the Wage Earner Plan, are ways you can regain financial stability.
How does Credit Counseling work?
In order to file bankruptcy, you must attend a credit briefing from an agency such as Consumer Credit Counseling. This briefing must take place within 180 days before you file bankruptcy. Then after you file there is a short credit class that you must also attend. The two credit counseling components of the law are a requirement to file and get a discharge.
My spouse has a pile of medical bills – will bankruptcy help?
Chapter 7 or Chapter 13 will wipe out medical bills. We would need to review your income and the value of your assets to determine what the best option for your family might be.
I make $25,000 per year, and we have $20,000 in credit card debt. I cannot get caught up, and my wages are being garnished. Will bankruptcy help me?
You qualify for a Chapter 7 or a Chapter 13. Either Chapter will help you deal with your creditors.
I only earn $28,000 per year, and I have $32,000 in credit card debt. What should I do?
Your income is under the New York State median income. You probably could file either a Chapter 7 or 13. We would need to review the value of your assets and then give you advice.
I am behind on my mortgage. What can I do?
You can take all the payments you have missed and file a Chapter 13. Chapter 13 will help clients who have delinquent mortgage payments to keep their homes.
What does bankruptcy accomplish?
The outcome of filing bankruptcy largely depends on which type of bankruptcy you file. That said, in general bankruptcy can:
- Stop wage garnishment and collection harassment
- Cancel out all or some of your debts
- Stop repossession of property
- Stop mortgage foreclosure
Is a court appearance required?
You will have to go to a 341 meeting, also called the “meeting of creditors” to meet with the bankruptcy trustee and any of your creditors who choose to come. Most of the time, the meeting is simple and short. You will be asked a few questions about your case. In most cases creditors do not attend the meeting. Some cases can be resolved with this meeting, while others do require a court appearance.