Somehow, Nassau and Suffolk County residents have been better able to avoid bankruptcies than citizens in many other parts of the country.  However, that certainly doesn’t mean that it is not happening.  While New Yorkers in general may be more aware of exactly what a bankruptcy is, due to the heavy amount of advertising and marketing done in this field, some things remain unclear or even unknown to many individuals who are considering their bankruptcy options.  So before you Google “Nassau Bankruptcy attorneys” or “Suffolk Bankruptcy lawyers”, you may want to review the most basic terms, so that you can be as knowledgeable as possible when you speak to someone about bankruptcy.

Bankruptcy Court

All bankruptcies in the United States are handled in Federal Bankruptcy Court.  While most of the laws governing bankruptcy are written at a Federal level, individual states have more specific rules that accompany the federal rules.   These additions or differences between the laws may make proceedings vastly different from state to state.  In any case, bankruptcy courts are highly regulated, and with laws changing all the time, it is vital to seek the assistance of qualified bankruptcy lawyers before you start taking any active steps. 

Bankruptcy Fraud

Bankruptcy fraud is a crime punishable by fines and/or imprisonment, or both.  Some consumers, through their own ignorance, unintentionally commit bankruptcy fraud.  This is classified by such acts as withholding information from the bankruptcy court, hiding or disguising sources of income or assets, selling property that is technically in possession of the court, and making false statements or claims about any aspect of your bankruptcy.  Even a slight infraction of this law can have devastating effects: another reason why you need to pick up the phone and simply call a bankruptcy attorney near you.  In most cases, they will initially advise you for free.

Chapter 7

When referring to “Chapters” in relation to bankruptcy, we are actually talking about types of bankruptcy.  For most individuals, Chapter 7 is the correct course of action.  In fact, nearly 65% of all bankruptcies are of this type.  In a Chapter 7 bankruptcy, a debtor’s possessions and assets are sold by the court to satisfy as much of the debts as possible.  Some items are exempt from this process, such as a home (in many cases), an older car, and clothing.  Whatever debts are not paid by the sale of the debtor’s assets are discharged forever through the bankruptcy proceedings.  It should be noted, however, that certain kinds of debt, such as student loans or child support, cannot be included in a bankruptcy, and must be repaid. 

Chapter 13

For individuals who have a regular income, a Chapter 13 bankruptcy allows them to restructure their debts.  They are allowed to keep all of their assets, provided that they make a concerted effort with their creditors to pay at least some of their debts owed.  This is typically done over a five year period, after which time any remaining debts can also be purged. 

Trustee

Bankruptcy courts have individuals who do nothing but manage bankruptcy proceedings.  These are officials who collect and examine information, verify, seize, and protect assets, correct, return, or file documents with the court, and otherwise manage aspects of the proceedings, up until an appearance before a judge.  A bankruptcy trustee ensures that all required steps are taken, and all required information is gathered.  If you are declaring bankruptcy, the court trustee can be a valuable aide, so make certain that you treat them with the utmost respect. 

Whether you have a grasp on the basics of bankruptcy or not, it is always a wise idea to consult with an experienced bankruptcy attorney.  Lawyers specialize in the field of bankruptcy because the scope of the field is so enormous that only specialized, highly trained individuals can fully understand and stay abreast of all the changes and requirements that are included as part of the process.  Want to learn more?  Stay tuned to this blog, as bankruptcy issues are a common theme.        

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This entry was posted on Wednesday, November 12th, 2008 at 7:41 am and is filed under General Information, Long Island Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.