Struggling with debt and collector harassment? We can help!

If you are struggling with debt, behind on your payments and even facing possible foreclosure, our team at Puleo Delisle, PLLC may be able to help.

A bankruptcy is a legal proceeding that allows for a person who cannot pay their current debts to get a fresh financial start. The right to file for bankruptcy is a federal law, and all of these proceedings occur in the federal courts, which is best suited to be handled by a qualified Long Island bankruptcy attorney. Once your bankruptcy petition is filed, creditors who are seeking to collect debts from you must stop any harassment until all of your debts are sorted out according to the law. There are two types of bankruptcies, Chapter 7 and Chapter 13.

What are the benefits of filing for bankruptcy?

  • Eliminate the legal obligation to pay most or all of your debts, known as a “discharge” of debts. This is the process to provide you with a fresh financial start
  • Stop foreclosure proceedings on your home, allowing you to catch up on missed payments
  • Stop debt collector harassment
  • Prevent repossession of a car or other valuable property
  • Stop wage garnishment
  • Restore utility service
  • Contest creditors’ claims, including overcollection and fraud

What debts can bankruptcy not eliminate?

  • Child support or alimony
  • Most fines and penalties owed to the Government
  • Most taxes and debts incurred to pay taxes
  • Student loans, unless the court finds these create an “undue hardship”
  • Debts not listed on the bankruptcy petition (Chapter 13)
  • Loans received by knowingly giving false information to a creditor
  • Any debts resulting from “willful and malicious harm”
  • Debts incurred by driving while intoxicated
  • Mortgages and other liens which are not paid in the bankruptcy case, however it will remove any obligation to pay additional money if the property is sold by the creditor

Chapter 7 Bankruptcy

This is the most common type of bankruptcy, known as “straight” bankruptcy, or “liquidation”. The purpose of this is to eliminate all unsecured debt including, but not limited to, personal loans, credit card balances, payday loans, school tuition debt, and medical bills. This requires you to give up property which is not “exempt” under the law, so the property can be sold to pay creditors. Commonly, any one who files a Chapter 7 Bankruptcy will keep all of their property except property which is very valuable or which is subject to a lien which they cannot avoid or afford to pay off the balance. Filing a Chapter 7 Bankruptcy may also be helpful in staying foreclosure proceedings, giving you critical time to explore all options.

It is imperative to consult a New York Bankruptcy attorney if you are considering filing for a bankruptcy. The attorney will conduct an analysis to determine if you qualify to file under Chapter 7, and if it is the best solution for you. If you are currently facing creditor harassment, bank account freezes, or wage garnishment, Chapter 7 may be the best route for you.  

Filing for Chapter 7 Bankruptcy is best handled by an experienced bankruptcy attorney to ensure all of the procedures are followed and the correct documents are submitted properly.

The initial required documents to file for Chapter 7 bankruptcy:

  1. Complete statement of all personal financial affairs
  2. Schedule of all income and expenses
  3. List of all creditors, nature of claim, and the amount of debt outstanding
  4. Proof of current income (source, amount, & frequency)
  5. List of all of the debtor’s property
  6. Comprehensive list of debtor’s monthly living expenses (including groceries, clothing, utilities, taxes, transportation, healthcare, childcare, etc)
  7. Schedule of executory contracts and unexpired leases
  8. Certificate of credit counseling
  9. Copy of any debt repayment plans developed through credit counseling
  10. Proof of any payments made through employers within 60 days of filing
  11. Statement of monthly net income and any expected increases in income or expenses after filing
  12. Records of any interest the debtor has in federal or state education or tuition accounts

What happens after I file for Chapter 7 bankruptcy?

The proceedings begin after the attorney files your petition with the federal bankruptcy court in your district. Once the court has accepted your petition, they will appoint a bankruptcy trustee to oversee your bankruptcy. An “automatic stay” is immediately entered once you file, which prevents any creditors from pursuing actions to collect debt. Any debt collection harassment you were experiencing will be prohibited immediately after this is entered. During this time, you may be able to reaffirm certain debt for assets such as your car, so long as you continue to make payments throughout the bankruptcy. Once your bankruptcy case has been concluded, many of your debts will be “discharged”, meaning you will no longer owe those creditors and they cannot pursue any legal action against you or any other means of collection.

Do I qualify for Chapter 7 bankruptcy in New York?

The eligibility to file for a Bankruptcy under Chapter 7 in New York depends on each applicants situation. An individual, corporation, partnership, or other business entity may file a petition for Chapter 7. However, the most common is an individual, which requires your income be at or below the median income in New York. There are instances if your income exceeds the state median income, or if your disposable income exceeds that amount, you may still qualify for Chapter 7 bankruptcy and you can trust a long island bankruptcy attorney to make this determination.[/column]

Chapter 13 Bankruptcy

This type of bankruptcy is a “reorganization” used by individuals to pay all or a portion of their debts over a defined period of years using their current income. With a Chapter 13 filing, the debtor proposes a repayment plan to make installments to creditors over three to five years. During this time, the law forbids creditors from starting or continuing collection actions against you. The benefit of a Chapter 13 is that it normally allows you to keep your valuable property, specifically your home and car, if you are able to make the payments.

To file for a Chapter 13 Bankruptcy in New York you will need the following:

  1. Complete statement of all personal financial affairs
  2. Schedule of all income and expenses
  3. List of all creditors, nature of claim, and the amount of debt outstanding
  4. Proof of current income (source, amount, & frequency)
  5. List of all of the debtor’s property
  6. Comprehensive list of debtor’s monthly living expenses (including groceries, clothing, utilities, taxes, transportation, healthcare, childcare, etc)
  7. Proposed payment plan (proposing how you will handle your debts over the payment plan period with the court)
  8. Proof of filed tax returns for last 4 years
  9. Certificate of credit counseling

Once you file a Chapter 13 bankruptcy, you are required to make monthly payments to a bankruptcy trustee who the court has appointed to your case. The trustee will then pay all of your creditors under the plan, and collect a commission based on the amounts paid out under your final plan. All payments must be made on time in your plan during the period in order to receive a discharge of any remaining balance on qualified debts.

Depending on the type of debt, and how the payment plan is structured, some creditors will receive 100% of the debt owed to them, while others may receive much smaller percentages or no payments at all.

  1. The following debts must be paid in full:
  2. Unpaid child support and alimony
  3. Wages, salaries, or any commission you may owe to employees
  4. Contributions owed to any employee benefit fund
  5. State and federal tax debt
  6. Defaulted mortgage payments (if you plan on keeping your home)
  7. Any other secured debt with defaulted payments (if you plan on keeping the asset)

Any unsecured debt will be paid from 0% to 100% depending on how much you owe, the total value of your non-exempt property, the amount of disposable income you have each month to put towards your debts, and how long your payment plan lasts.

How does a Chapter 13 payment plan work?

The length of your payment plan is based upon your income level. If your current monthly income is higher than the median month income for a household in New York, then your plan will last five years. If your income does not exceed the New York median income level, your plan will be proposed for three years. In this payment plan, you must commit to paying all of your remaining disposable income each month towards any unsecured debts, such as your medical bills, student loans, credit card balances, etc. Disposable income is calculated by taking your monthly income and deducting certain allowed monthly expenses and payments on secured loans, such as your mortgage or car payment.

Do I surrender my property with a Chapter 13 Bankruptcy?

Unlike a Chapter 7 Bankruptcy, in which you must surrender your non-exempt property to the trustee, who will then sell the property and distribute all proceeds to your unsecured creditors, in a Chapter 13 Bankruptcy does not sell your property. However, in order to keep your property, you must pay unsecured creditors (credit card balances, utilities, personal loans, medical bills) at least the value of your non-exempt property through your payment plan.


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