Should I File for Bankruptcy?

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One of the scariest situations a homeowner can face is a foreclosure on his or her house. Fortunately, if you are in serious debt, you are not hopeless. With the help of an experienced attorney, you can figure out the best way forward, which is very often a far more appealing solution than you may think. If you believe you are ready to file for bankruptcy, here are some of the questions you may have regarding the bankruptcy process:

What are some of the signs I should file for bankruptcy?

The American Bankruptcy Institute recommends contacting a bankruptcy attorney if you notice any of the following warning signs:

  • Creditors have obtained judgments against you or your company
  • A bank account has been frozen
  • Your wages are being garnished
  • You are no longer financially capable of paying down your credit card bills or medical bills

What should I do if I think I am eligible for bankruptcy?

Aside from consulting an experienced bankruptcy attorney, you should do the following:

  • Assess the totality of your financial situation
  • Review your income and debt with your accountant
  • Review your credit report
  • Open all of your mail to ensure you know who is collecting against you and for how much money
  • Never ignore a lawsuit, foreclosure or collection action

What are the different types of bankruptcy?

One type of bankruptcy is known as Chapter 7 Bankruptcy. When you file for Chapter 7 Bankruptcy, you will most likely be granted a discharge of most of your debt, including credit card debt, medical bills, personal debt, foreclosures, and automobile repossessions. You will also most likely be able to keep certain important assets, such as automobiles, pension plans, bank accounts, IRA’s, and, perhaps most importantly, your home. Generally, to qualify for Chapter 7 Bankruptcy, you must have a family income that is less than the average family income in your county. 

Chapter 13 Bankruptcy, on the other hand, is for families that have assets, value to their home, or earn above the average family income in their county. A Chapter 13 Bankruptcy allows you to keep your assets as long as you submit to a “Plan” over a three-to-five-year period. This Plan is designed to help you with your mortgage and automobile payments while forcing your creditors to seize all collection activities. In these Plans, debtors repay their unsecured creditors what they can afford based on their income and expenses. At the end of a Chapter 13 Bankruptcy Plan, all remaining debt is eliminated.

Contact our experienced New York firm

If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, to schedule a consultation and discuss your options.