Bankruptcy Solutions – Bankruptcy Attorneys

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• Modification & Negotiation
• Credit Card Debt Relief

Bankruptcy Lawyers Suffolk & Nassau Counties

Bankruptcy allows individuals and businesses to eliminate, reduce and/or extend debt. Our law office represents clients under all chapters of the bankruptcy code (Chapters 7, 11 and 13) and Adversary Proceedings and Bankruptcy Appeals.

• What Is Bankruptcy?
• Who Can File for Bankruptcy Protection?
• What Are the Potential Benefits of a Bankruptcy Case?
• What Are the Alternatives to Bankruptcy?
• What Are the Basic Types of Bankruptcy Cases?
• What Are the Qualifications for a Bankruptcy Case?
• What are: a) an Adversary Proceeding; b) a Contested Motion; and c) a Bankruptcy Appeal?
• Can a Credit Rating Be Rebuilt After a Bankruptcy Filing?
• When Can or Should a Bankruptcy Case Be Filed?
• How Has Covid-19 Affected Bankruptcy Law and Practice?
• Why Use Our Law Office for Your Legal Needs?

What Is Bankruptcy?

The purpose of federal bankruptcy legislation, sometimes known as Title 11 of the United States Code or the “Bankruptcy Code,” is to provide an opportunity for financial reorganization or a fresh start for legitimate debtors who are unable to fulfill their obligations. This objective is achieved by bankruptcy law, which gives debtors a legally binding tool that allows them to: (1) eliminate, reduce, reorganize, and/or extend the majority of their debts; and (2), subject to certain restrictions, shield themselves from creditors’ harassment and pursuit during the bankruptcy case. In addition to trying to provide the debtor with relief, bankruptcy law also aims toThe aim of bankruptcy law is to treat a debtor’s creditors fairly through the following means: (A) safeguarding them from fraud; (B) treating creditors in similar circumstances equally; (C) establishing a process by which the debtor must reveal details about their assets, income, and debts in order to confirm their eligibility for a case; and (D) giving creditors regular notice and a chance to be heard during the bankruptcy case.

Who Can File for Bankruptcy Protection?

An individual (by themselves or as a married couple) or a business (a sole proprietorship, partnership, or corporation) may file for bankruptcy protection, with very few exceptions. Although most people who file for bankruptcy protection are “insolvent,” which is defined as having more liabilities than assets or being unable to pay their debts on time, being insolvent is not a prerequisite for filing for bankruptcy voluntarily.

What Are the Potential Benefits of a Bankruptcy Case?

When a bankruptcy case is filed, a “automatic stay” is immediately put in place to shield the petitioner from creditors. Most debts in a Chapter 13 or Chapter 11 case can be cured, decreased, and/or reformed under a plan; in a Chapter 7 case, most debts can be removed by the bankruptcy “discharge.” There is a forum to go to if there are disagreements or concerns regarding a case because bankruptcy cases are managed by a federal bankruptcy court that is expressly authorized to handle bankruptcy matters.Nonetheless, after a case is filed, creditors will stop all collection efforts and honor the bankruptcy stay and discharge. They will also record the discharge on the debtor’s credit report.
The following uses of filing for bankruptcy are common:

• by people to get rid of excessive credit card debt, hospital expenses, and other debt;
• by people or companies to prevent the foreclosure of their real estate or home, or to prevent the repossession of their vehicle or other assets;
• enterprises in a cash flow crunch to ask creditors for a “breathing spell” so they can sell off assets or restructure their finances;
• by people or companies to extend, settle, and/or restructure heavy sales and withholding tax obligations, mortgage or real estate tax arrears, and
• by companies to prevent the seizure of leased equipment or the eviction from leased real estate.

Bankruptcy can be used for purposes other than those listed above; there are additional uses for bankruptcy cases. However, because bankruptcy law can be complicated, a person or company thinking about filing for bankruptcy should carefully discuss their objectives with a bankruptcy counsel. Based on the specifics of each case, a bankruptcy lawyer can decide whether or not the aforementioned objectives can be met.

What Are the Alternatives to Bankruptcy?

Although declaring bankruptcy is a common solution for those facing severe financial difficulties, there are other options available to them that can serve as a substitute for filing for bankruptcy. A few of these alternatives entail extrajudicial discussions that could result in settlements or loan adjustments with creditors. Other possibilities include arguing against a creditor’s pursuit of debt by contesting the validity of the debt or the means by which the creditor has attempted to pursue the debt, as well as responding to the creditor’s complaint (within 20 or 30 days).Options other than filing for bankruptcy exist and are sometimes better. However, for a debtor facing significant financial difficulties, declaring bankruptcy is frequently the most effective and straightforward course of action. However, it is important to emphasize that not all difficult financial situations may be resolved by bankruptcy, and that there are hazards associated with bankruptcy in some circumstances.
If the majority of your debts are unsecured, such as credit card debt, you may be able to reduce the amount owed by negotiating with your credit card companies. This is especially true if your credit card company is one like ours that can file for bankruptcy. Payment plans do not offer the same discounts as lump sum agreements, although both can have favorable outcomes.

If the majority of your bills are credit card debt or other unsecured debt, negotiations with your credit cards,particularly by a company like ours, which is capable of filing for bankruptcy and can effectively reduce the debt. Payment plans do not offer the same discounts as lump sum agreements, although both can have favorable outcomes. Additionally, we can litigate with unsecured creditors, particularly in cases where there might be a disagreement or when we require more time or power to get a favorable resolution. When it comes to paying off debt, bankruptcy typically offers more assurance and speed. However, in situations where a client may not be eligible for bankruptcy (due to income or asset limitations in Chapter 7 or due to debt limitations in Chapter 13, as explained further below), negotiated agreements or litigation defense may be preferable if the client does not have a general debt problem and only has issues with one or two isolated creditors. Additionally, some clients might decide to try to avoid filing for bankruptcy; in these cases, negotiation methods can offer enough relief without the necessity for filing, even though they are less effective than filing for bankruptcy. negotiates most debts in the interest of our clients, such as credit card, tax, mortgage, as well as other debts.

What Are the Basic Types of Bankruptcy Cases?

Bankruptcy cases can be of three fundamental types: In a liquidation bankruptcy, Chapter 7 is the most typical type. A Chapter 11 business reorganization is filed under Chapter 11, which is mostly used by enterprises. Chapter 13, also commonly used by people, is a “wage earner’s bankruptcy.” These fundamental categories of bankruptcy cases are suitable for various circumstances and are called after the corresponding chapters in the Bankruptcy Code. A Chapter 7 bankruptcy case can be used to liquidate a corporation or to erase or “discharge” the majority of an individual’s obligations.In order to pay off debt over time, a person or a sole proprietorship business with a regular source of income may file for Chapter 13 bankruptcy. This type of case is frequently filed by people with other problematic debt who do not qualify for Chapter 7 due to excess income or equity in their assets, as well as by debtors trying to prevent foreclosure on their home or other real property. A company or an individual may utilize a Chapter 11 reorganization case to restructure its financial obligations while keeping ownership, control, and operation of its assets.

The procedures, conditions, and rights associated with these various bankruptcy case types fluctuate significantly, and their applicability to a given situation might also differ substantially based on the specific facts and persons involved.

What are the Qualifications for Bankruptcy?

Chapter 7, Due to its ability to “discharge” or erase debt, Chapter 7 bankruptcy cases are the most common ones filed. But because Chapter 7 has requirements that dictate whether a client can and/or should bring a case under Chapter 7, it is not accessible to all parties. The primary criterion involves comparing the client’s income level to the median income of a family with the same size in New York State, which is based on family size, or the number of dependents in a household. The goal of means testing is to ascertain whether a client makes more money than the average for their A household’s eligibility to submit a lawsuit in the State of New York is based on the necessary expenses, which are ascertained by their real demonstrable spending and limited by certain IRS rules utilized in such testing. The exam examines a client’s earnings, allowable expenses, and essential outlays for the six months leading up to the bankruptcy petition. When examining a client’s actual expenditure in terms of net income less regular expenses (without taking into consideration payments on debts the bankruptcy has incurred), a negative budget as well as negative disposable income under the means test are required in order to be eligible for Chapter 7. situation would end). A client may still be eligible for Chapter 13 relief and may even be able to pay off a small portion of their debt over the course of a five-year plan if they meet the requirements of both the means test and the budget test. However, at that point, they are not permitted to apply for Chapter 7. Chapter 7 contains additional non-official restrictions regarding the equity in the client’s assets in addition to official, statutory constraints on the income level. Even while liens and exclusions may be able to safeguard such equity, if a client has a lot of unprotected equity in their assets, such as a home or car,and/or a right to money via an inheritance, a court case, or a tax refund—may be subject to a sale by the Chapter 7 trustee. Therefore, if a possible asset has a significant amount of exposed equity, a client might wish to consider filing under Chapter 7.

In contrast to Chapter 7, Chapter 13 and 11 do not have an official income cap or an unofficial asset/equity value limitation, making them far more accessible to those filing. Chapter 13 provides for a five-year plan in which a person with positive discretionary income and/or equity in their assets can file for bankruptcy. During this time, the debt, or a portion of it, can be paid off without incurring additional interest or fees from the creditors. However, Chapter 13 places a cap on the total amount of debt—$1,395875 for secured debt and $465,275 for unsecured debt as of April 1, 2022—but because these limits are so high, they typically only apply to those who are investing in real estate, businesses, or who owe extraordinarily large mortgages. Individuals who are impacted by the Chapter 13 debt limits may file under Chapter 11, which is intended for cases involving greater debt loads and is typically used by companies or individuals with higher debt burdens. Corporations can only file under Chapter 7 to liquidate debt or Chapter 11 to reorganize debt; they cannot file under Chapter 13, which is only available to individuals, even with modest amounts of debt. Compared to Chapter 13, Chapter 11 is far less organized and can address various corporate reorganizations in quite varied ways. The most current inclusion of With provisions designed to give small businesses corporations that fall between those of a traditional Chapter 11 case and a Chapter 13 case a reorganization option, Subchapter V to Chapter 11 for small businesses allows Chapter 11 cases for small corporations to proceed more effectively, economically, and quickly.

In certain situations, choosing which bankruptcy code chapter to apply may necessitate careful planning with a bankruptcy attorney. Give us a call to schedule a free consultation.

What is an Adversary Proceeding?

An adversary bankruptcy proceeding is a court lawsuit that is brought by a creditor, the debtor, or a bankruptcy trustee to resolve a significant matter that needs to be decided by the bankruptcy court. Objections to the debt’s dischargeability based on claims of fraud or misrepresentation by the debtor about the debt are among the issues raised by creditors. The Bankruptcy Trustee’s concerns include contesting the bankruptcy discharge in its entirety, stopping a purportedly fraudulent or favorable transfer, and turning over an asset.

What is a Contested Motion?

An appeal of a decision that we believe may have been made