What Are the Benefits of Bankruptcy?

• Bankruptcy Solutions
• Foreclosure Solutions
• Modification & Negotiation
• Credit Card Debt Relief

The filing of a bankruptcy case will immediately create an “automatic stay” that would protect the person filing the case from their creditors. In Chapter 7 most debts can be eliminated by the bankruptcy “discharge” and in a Chapter 13 or Chapter 11 case most debts can be cured, reduced and/or reorganized under a plan. Bankruptcy cases are overseen by a federal bankruptcy court that specifically has jurisdiction to administer bankruptcy cases and therefore there is a forum to go to if there are disputes or issues as to a case. However, creditors are generally respectful of the bankruptcy stay and bankruptcy discharge and will cease all collection efforts upon the filing of a case, and note the discharge on a person’s credit report.

A bankruptcy filing is often used for many situations of where there are financial challenges to individuals and/or businesses as follows:

• By individuals to eliminate overwhelming credit card debt, medical bills, and other types of debt;
• By individuals or businesses to save their house or other real property from foreclosure or to save their car or other assets from repossession;
• By individuals or businesses to have an opportunity to modify, restructure or cure a mortgage in default through “loss mitigation” procedures, settlement conferences and/or under a plan;
• By businesses, under a cash flow squeeze to obtain a “breathing spell” from their creditors in order to reorganize their financial affairs or to sell off assets;
• By individuals or businesses to extend, resolve and/ or reorganize mortgage or real estate tax arrears or burdensome sales and withholding tax liability;
• By businesses saddled with real estate and/or equipment leases that no longer are profitable and can be rejected and the asset or equipment returned to the creditor; and
• By businesses or individuals to stop eviction from leased real property or repossession of leased equipment.

The above uses of bankruptcy are not exclusive and a bankruptcy case can be used for other purposes.

However, an individual or business contemplating filing a bankruptcy case should carefully review their goals with a bankruptcy attorney since bankruptcy law can be complex. A bankruptcy attorney will be able to determine whether the above goals can be achieved depending upon the particular circumstances of a situation.

Please call us at (631) 271-3737, or e-mail us at [email protected] for a free consultation to discuss such legal options in greater detail.