The different types of bankruptcy cases, namely, Chapter 7, Chapter 13, and Chapter 11, are appropriate to different situations and can vary greatly in how they would apply to particular circumstances.
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Most foreclosure actions in the Greater Long Island - New York areas take approximately one (1) year from the date legal proceedings are initiated.
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A bankruptcy case is often the most effective way to deal with serious debt.
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A summons and complaint in a foreclosure litigation should be answered in 20 to 30 days after it is served on the defendant.
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Once a person "discharges" their debt at the end of a Chapter 7 case, the debt is permanently eliminated even if the person after the case aquires significant assets and/or starts to earn substantial income.
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In a Chapter 7 bankruptcy case one can eliminate significant debt and in most cases retain property such as one's home and vehicles.
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A person can keep obligations current and unaffected by a Chapter 7 case, such as mortgage and car loan payment.
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An answer in a foreclosure litigation is a formal, legal document that is usually prepared by an attorney which can have many afirmative defenses and counterclaims.
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Most people rebuild their credit faster by eliminating problematic debt than by struggling to try to pay overwhelming debt that is beyond their ability to pay.
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After the answer, there are other documents and procedures necessary to defend a foreclosure litigation.
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Creditors have very limited rights in a Chapter 7 case and can not object to the discharge of debt that at the time was incurred in good faith but now can not be paid,
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Obtaining a permanent mortgage modification is usually a lengthy and challenging process.
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Outside of bankruptcy creditors are not required to settle or take partial payments; however in a bankruptcy case the creditors have no choice but to allow debt to be eliminated in Chapter 7 or to be reorganized in Chapter 13.
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Mortgage lenders, are not required by law to give a modification and their granting modifications is voluntary and subject to a rigorous evaluation process.
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A person is not required to be behind with their debt to file a bankruptcy case.
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A Chapter 13 bankruptcy case, without any negotiation with the mortgage lender, gives five years to catch up with mortgage arears and other debt.
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Most people filing bakruptcy cases are middle class people who have income and assets.
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If a client can resume their original monthly mortgage payments and catch up on arrears over five years, a Chapter 13 case will usually allow the client to resolve their foreclosure.
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A Chapter 7 case takes only approximately four (4) months, but upon filing there is immediate protection from creditors who can no longer pursue debt.
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A Chapter 7 case can eliminate any liability for a deficiency in a situation where a property goes to a foreclosure sale.
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At the end of a Chapter 7 case most debts are permanently eliminated.
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Either a bankruptcy case (either Chapters 13, 11 or 7) or an Order to Show Cause can stop a foreclosure sale.
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Most people in foreclosure need to prevent a foreclosure sale, since after a foreclosure sale it is usually impossible for them to regain ownership over their homes.
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