If you are struggling financially, you know how stressful life can be. Fortunately, for many people, filing for bankruptcy is a way out. The word “bankruptcy” can sound intimidating, however, with the help of an experienced bankruptcy attorney, it does not have to be. If you think bankruptcy will provide you with the peace of mind you need to sleep soundly at night, please read on to learn more about how it can help.
How does bankruptcy work?
When individuals can no longer repay their debts and have attended a credit counseling course, they may wish to file for bankruptcy if they are left with no other options. Essentially, the goal of bankruptcy is to relieve you of most of your financial debts. However, there are two primary types of bankruptcy individuals may file for, and both follow a slightly different process.
What assets are exempt from a Chapter 7 bankruptcy?
When you file for Chapter 7 bankruptcy, you will have most of your debt discharged, such as credit card or personal debt, and you may even keep certain assets. In Chapter 7 bankruptcy, you may keep your bank account, household goods, furnishings, and clothing, your automobile, pension plans, IRAs, and, perhaps most importantly, your home.
What assets can I keep in a Chapter 13 bankruptcy?
Chapter 13 bankruptcy functions differently from Chapter 7. While you are allowed to keep your assets in a Chapter 13 bankruptcy, you may only do so by establishing a 3 or 5-year plan with the bankruptcy court. In this plan, you are required to pay back most of, or all of the debt you owe. Once the Chapter 13 Plan is completed, even if you did not pay back the full amount you owe, all remaining debt is discharged. To be eligible for a Chapter 13 bankruptcy, you must be an individual, have a disposable income at the end of each month, your unsecured debts are no higher than $360,000, and your secured debts are no higher than $1,310,000.
What debts cannot be discharged when filing for bankruptcy?
Unfortunately, there are still several assets that may not be discharged via bankruptcy. They are as follows:
- Court-ordered child support or spousal support
- Student loans
- Government fines or penalties
- Court fines and penalties
- Any compensation you may owe, such as a personal injury lawsuit filed against you
Contact our experienced New York firm
Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.
