Most people know what bankruptcy means, but many are unaware of what it actually entails. For example, if one were to file for bankruptcy, how would they even begin the process? Just as importantly, once the process is underway, how can they pick up the pieces and begin to reshape their lives?
Fortunately, as an expert bankruptcy attorney in Buffalo, NY, I can shed light on the entire process for you and make certain you understand what the rules are, how you can best protect your assets and what it is you need to do to endure this difficult ordeal.
As such, this page is designed to answer many of the common questions I receive regarding bankruptcy. If you would like more details or to discuss your specific situation, please contact me today.
Chapter 7 or Chapter 13 Bankruptcy?
Chapter 7 bankruptcy enables you to discharge certain debts, such as medical bills, personal loans, and credit cards. If you wish to keep your home or your car you will need to continue to make your mortgage and/or car payments.
Chapter 13 bankruptcy allows you to avert foreclosure by extending the delinquent mortgage payments over the life of a 3-5 year Chapter 13 repayment plan. It also allows you to cure other delinquent secured debts, such as an automobile loan. To find out which form of bankruptcy is right for you contact Buffalo NY bankruptcy attorney Thomas Denny.
What is a bankruptcy discharge?
A bankruptcy “discharge” releases you from personal liability for discharged debts and prevents creditors from taking any action against you to collect the debts. If you are struggling to pay your debts, Buffalo bankruptcy attorney Thomas Denny will help you attain protection from collection action under Chapter 7 of the U.S. Bankruptcy Code. When your bankruptcy case is completed, you will receive a discharge from the Court, which will release you from all or most of your debt obligations.
Can I Keep My Home After Bankruptcy?
Under the New York State bankruptcy exemptions, a debtor in Buffalo NY may keep up to $82,775 (per owner) in equity in his or her home. A married couple filing jointly may keep up to $165,550 in home equity. Under the federal exemptions, each debtor may keep up to $23,675 (per owner) in equity in his or her home. As long as the difference between what you owe on your house and its market value is less than the exemption amount, you will not lose your home. For those who do not own homes, the federal exemptions are the preferable option since they allow the debtor to keep considerably more in cash and personal property, such as an automobile with equity exceeding $4000.
Will bankruptcy stop foreclosure?
Filing for bankruptcy places an automatic stay (a stop) on foreclosure proceedings. Under Chapter 7, however, after several weeks, the mortgagee (the bank) will likely apply for and be granted relief from the stay and be allowed to continue the foreclosure proceeding. Chapter 13 provides a way to avoid foreclosure altogether by forcing the bank to allow you to pay the past due amount over time, in addition to your current mortgage payments. Contact Buffalo bankruptcy attorney Thomas Denny for more information on how bankruptcy can stop foreclosure.
Will I have to go to court?
Approximately 20 to 40 days after filing for bankruptcy you will be required to attend a ”meeting of creditors.” There, the trustee will review your petition and ask questions about your property and finances. The proceeding takes approximately 15 minutes and, although it is a called a “meeting of creditors,” very rarely do creditors actually attend. Unlike many lawyers who send associates to take their places, Buffalo bankruptcy attorney Thomas Denny personally represents each and every one of his clients at the meeting of creditors.
Will bankruptcy affect my credit?
Although bankruptcy will remain on your credit report for ten years from the filing date, by eliminating all or most debts, it may actually help your credit. In addition to improving your debt to income ratio, bankruptcy may allow you to qualify for an FHA or VA-insured mortgage in as little as two years. As your counselor, Buffalo bankruptcy attorney Thomas Denny will provide guidance on how to establish new credit and improve your credit rating.
What is the “means test?”
The “means test” is a formula used to determine who can and cannot file for bankruptcy protection under Chapter 7. The law requiring a “means test” was enacted in 2005 to deter wealthy debtors from filing for Chapter 7 bankruptcy. For example, if you are an individual filing for bankruptcy in Buffalo and your income is less than the state median of $50,768, or if more than 50% of your debts are business-related, you will not be subject to the means test. If, as a result of the means test, you cannot file under Chapter 7, you may still be entitled to file for bankruptcy protection under Chapter 13.
May I file for bankruptcy individually or should my spouse file also?
If yours debts are in both your names, both you and your spouse should file. Otherwise, it is not necessary to have a bankruptcy noted on both of your credit reports. If you choose to file alone, however, your spouse will not be relieved from his or her share of any debts discharged in a Chapter 7. In a Chapter 13, on the other hand, if the Plan calls for payment of 100% of your debts, you may file without your spouse even if he or she is a joint debtor. This is usually the case when someone is filing specifically to avert foreclosure. Buffalo bankruptcy attorney Thomas Denny represents both individuals and married couples filing jointly.
Can I be fired for a bankruptcy?
The law strictly prohibits an employer from terminating you or denying you employment for filing bankruptcy or for not having paid a debt that is dischargeable in bankruptcy. Furthermore, you cannot, solely because of bankruptcy or insolvency, be denied a federal student loan, a drivers license, or a professional license. For further information regarding bankruptcy discrimination and your rights under the law contact Buffalo bankruptcy attorney Thomas Denny.
Can bankruptcy stop a repossession?
Filing for bankruptcy creates an automatic stay under which all collection actions, including repossession of an automobile, are stopped. The lender has the option, however, to apply to the court to have the stay lifted to protect its security interest. Nonetheless, in bankruptcy you can elect to reaffirm your car loan and keep your car if you can demonstrate that the car is necessary and that the payment is reasonable. Contact Buffalo bankruptcy attorney Thomas Denny for additional information.