Many people live and work in the town of Southampton, New York, enjoying all that Long Island and the Greater New York City area have to offer. However, like almost everywhere in the United States, the struggling economy has hit many households in Southampton hard, causing a buildup of debt for many households and businesses without the means to pay all of the bills. If you are facing an overwhelming amount of debt, it is easy to believe there is no solution to every get ahead again. However, the law realizes that many people may need assistance and gives them the opportunity to petition the court for a discharge of their debts in bankruptcy.
Many people are hesitant to file for bankruptcy because they are unsure of whether bankruptcy is the right solution for them. When you consult with our experienced bankruptcy lawyer, you will receive a full evaluation of your situation and advise regarding whether bankruptcy can help you or whether there are other debt relief options available to explore first.
At the law office of Ronald D. Weiss, P.C., we have been advising individuals, married couples, and business owners around Southampton regarding the bankruptcy process and representing them throughout bankruptcy cases for more than 25 years. We can provide assistance in many different ways if you are facing financial problems, so please call our office to discuss your situation for free today.
After you have decided to file for bankruptcy, the next highly important decision ahead of you is which type of bankruptcy to file. This determination will depend on many different factors, including whether you are filing for personal or business bankruptcy, the types of debt that you have, the amount of income you have, and the assets and property that you own. The following is some brief information regarding a few types of bankruptcy, though the best way to know is to consult with a skilled bankruptcy lawyer.
Chapter 7 – Chapter 7 of the U.S. Bankruptcy Code1 allows what is often referred to as the “liquidation bankruptcy.” First, you must qualify by passing something called the “means test,” which will test whether you have enough disposable income to pay at least some of your debts. If you pass this test, you can file and, if your petition is granted, the court will discharge all qualifying debts including credit cards, most legal judgments, unpaid rent, medical bills, and more. Before you can obtain a discharge, however, the bankruptcy trustee will seize any eligible property and liquidate it, applying the proceeds toward your debts. An attorney can help you make the best use of Chapter 7 exemptions2 that will allow you to keep as much property as allowed under the law.
Chapter 13 – This type of bankruptcy is used by individuals, often because they have too much income to pass the means test or because they have significant property that they do not want to surrender. No property is liquidated in Chapter 13 cases, however, before you can be granted a discharge, you must first complete a three to five-year payment plan. The payment plan will involve one payment that goes toward all of your reorganized debts and the amount will be based on your income and expenses. Once you complete your plan, the court can discharge any qualifying balances that remain.
Chapter 11 – Both individuals and businesses can file for Chapter 11 bankruptcy, however, most personal bankruptcies are filed under Chapter 7 or 13. For this reason, Chapter 11 generally involves a business that cannot pay its debts yet does not want to liquidate and close its doors. Instead, a business can stay in operation during the course of the bankruptcy and afterward. This is also a reorganization bankruptcy that requires a payment plan before any discharge is possible.
The bankruptcy process can seem complex to anyone unfamiliar with bankruptcy laws and even to attorneys who do not have significant experience with bankruptcy cases. For this reason, you always want to ensure that you have representation from a lawyer who has successfully handled many cases involving bankruptcy. The following are only a few of the steps of this complicated bankruptcy process:
● Filing the petition – To initiate a case, your attorney will prepare and file a petition with the court accompanied by the significant amount of paperwork that is required to inform the court of all aspects of your financial situation.
● Automatic stay – As soon as you file your petition, the court will order an automatic stay to provide almost immediate relief from debt collection attempts. Creditors must halt all phone calls, letters, legal cases, garnishments, repossessions, foreclosures, and other collection methods during your bankruptcy case.
● Liquidation – If you filed under Chapter 7, the bankruptcy trustee will seize all eligible and nonexempt property to liquidate it and will distribute the proceeds to your creditors as the trustee sees fit.
● Setting the payment plan – For Chapter 11 and 13 cases, negotiating a favorable payment plan is imperative to the success of your case.
● Discharge – Your case will conclude with the discharge of your eligible debts, which will hopefully leave you with a relatively clean financial slate.
Bankruptcy can have many important benefits, including eliminating credit card debts or medical bills, improving cash flow, and even avoiding foreclosure of your property. While many people may be intimidated by the bankruptcy process, it does not have to be difficult if you have a highly skilled bankruptcy attorney handling your case. Southampton bankruptcy and foreclosure lawyer Ronald D. Weiss has been helping clients for over 25 years and is ready to assist you in finding financial solutions. Please call to discuss your case at 631-271-3737 or set up an appointment via our online form today.
Bankruptcy is a formal process to make up for or legally discharge the burden of paying financial debts to creditors when someone has fallen so far behind on bill payments that they are unlikely to recover. In order for people and families to continue a normal way of life without losing everything they own, bankruptcy aims to give them financial relief.
Declaring bankruptcy was once viewed as a “personal failure” or even a “character defect” due to poor financial management skills in an era when creditors were considered to be more “fair” and banking activities were more tightly regulated. There is no longer any use for these labels and identifications.
Generally speaking, declaring bankruptcy is a last resort. You should carefully weigh your options before declaring bankruptcy. If it is the best method to cope with your financial troubles, filing for bankruptcy may be for you.
By filing for bankruptcy you may be able to discharge your debts, giving you a fresh financial start. You may also be able to temporarily stop a tax or mortgage foreclosure on your home, prevent a car from being repossessed, or stop your wages from being garnished to collect on a debt.