Long Island Bankruptcy Lawyer (Chapter 7 & Chapter 13)

Bankruptcy Lawyer Long Island

Bankruptcy is a complex legal process and requires detailed planning. Even a small mistake can be costly. Planning is very important when you are filing for bankruptcy. Bankruptcy is a legal proceeding in which a person who cannot pay his/her bills can eliminate their debts and get a fresh financial start. The right to file for bankruptcy is provided by federal law. All bankruptcy cases are handled in federal court. Filing a petition in bankruptcy will immediately stop any and all creditor activity seeking to collect debts from you. The filing of a petition in Bankruptcy will invoke the protection of the “Automatic Stay”. The Automatic Stay is a Federal injunction that prevents all creditors from calling you at home or on the job, instituting lawsuits against you, garnishing your paycheck or restraining your bank accounts. Most people will qualify for a Chapter 7 [liquidation] or a Chapter 13 [reorganization] only. At the Law offices of Howard D. Weisinger, he has been a practicing Long Island bankruptcy lawyer for almost his entire career. His practice has been located in the same general area for the past 20 years, where he has been a Nassau bankruptcy attorney. Since bankruptcy is Federal protection its jurisdiction is encompasses many counties. Howard D. Weisinger is a bankruptcy lawyer on Long Island serving Nassau, Suffolk, Queens, and Kings Counties.

The Bankruptcy Estate

The property you own on the day you file for bankruptcy is called your “bankruptcy estate.” Property and income you acquire after you file for bankruptcy aren’t included in your bankruptcy estate. When you file for bankruptcy, the forms that are completed and filed with the Bankruptcy Court require you to list all of the property in your bankruptcy estate. Everything in your possession that you own, whether or not you owe money on it—for example, a car, a house, clothing, books, television, stereo system, furniture, tools, boat, artworks, or stock certificates—is included in your bankruptcy estate. You can own something even if you don’t have physical possession of it. For instance, you may own a car that someone else is using. Other examples include a deposit held by a stockbroker, a security deposit held by your landlord or a utility company, or a business in which you’ve invested money. Property that you have a legal right to receive but haven’t gotten yet when you file for bankruptcy is included in your bankruptcy estate. After listing property of the estate is in your bankruptcy, certain property may then be exempted or removed from the estate, and therefore the reach of the trustee or creditors [exemptions are discussed below]. Most Chapter 7 cases that are filed are “no asset” cases where the debts are discharged and there are no assets for a trustee to sell off to satisfy debts owed creditors.

Chapter 7 (Also known as a Liquidation or Straight Bankruptcy)

In a bankruptcy case filed under Chapter 7, the filer (known as the “Debtor”) will file a petition asking the court to discharge debts. A Debtor in a Chapter 7 bankruptcy wishes to wipe out (discharge) debts and receive a fresh start. This fresh start provision is achieved by giving up non-exempt property, that is, property which the law would not allow you to keep when discharging debts, and allowing a Chapter 7 Trustee to liquidate that non-exempt property to pay creditors. In most cases, all of your property will be considered exempt. A non-exhaustive list of exempt property can be found below.

What Property Can I Keep In Chapter 7?

In a Chapter 7 you can keep all property which the law says is “exempt” from the claims of creditors and the reach of the Chapter 7 Trustee. Exemptions in New York may be claimed under Federal or State statutes. The choice between Federal or State will depend on which benefits the Debtor most. Examples of State exemptions of protected property include:

  • $150,000 of equity in your principal residence
  • $4,000 of equity in your car
  • $10,000 of equity in household goods and clothing, less the amount of cash
  • $3,000 for things you need for your job (tools, books, etc.) less the total for household goods

Chapter 13 (Reorganization)

In a Chapter 13 case, the Debtor is reorganizing his or her debt while protected by the Automatic Stay. A Debtor will file a “plan” showing how past debts will be paid over a maximum 60 month period (5 years). These monthly payments will be made to a Court appointed Chapter 13 Trustee, who is a disbursing agent for plan payments. The most important thing about a Chapter 13 case is that it allows the Debtor to keep valuable property. Chapter 13 is most commonly used when a Debtor falls behind on mortgage payments. A Chapter 13 permits the Debtor to pay the mortgage arrears to a Chapter 13 Trustee while making current mortgage payments to the bank. While the plan is being paid, the bank is prevented from beginning or continuing foreclosure proceedings.

What Property Can I Keep In Chapter 13?

In a Chapter 13 you are most likely to keep all property that you own since a Chapter 7 Trustee is not liquidating non-exempt assets to pay creditors.

What Can Bankruptcy Chapter 7 or Chapter 13 Do For Me?

  • Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to give you a fresh financial start.
  • Stop foreclosure on your house, condo or co-op and allow you an opportunity to catch up on missed payments. (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment).
  • Prevent repossession of a car or other property.
  • Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
  • Restore or prevent termination of utility service.
  • Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.

What Else Should I Know?

The Means Test — The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) introduced a “means tests” to determine eligibility to file a Chapter 7. Debtors who do not pass the means tests will be eligible to file under Chapter 13. If you are considering bankruptcy, seek legal bankruptcy advice from an experienced bankruptcy attorney. The law now requires people planning to file for bankruptcy undergo a pre-bankruptcy credit counseling from a government-approved organization within 180 days before they file.

Utility services — Public utilities, such as the electric company, cannot refuse or cut off service because you have filed for bankruptcy. However, the utility can require a deposit for future service and you do have to pay bills which arise after bankruptcy is filed.

Discrimination — An employer or government agency cannot discriminate against you because you have filed for bankruptcy.

Driver’s license – -If you lost your license solely because you couldn’t pay court-ordered damages caused in an accident, bankruptcy will allow you to get your license back.

Co-signors — If someone has co-signed a loan with you and you file bankruptcy, the co-signer may have to pay the debt. If you file a Chapter 13, you may be able to protect a co-signor, if it was a consumer debt, depending upon the terms of your Chapter 13 plan.
REMEMBER: The law often changes. Each case is different. The information contained herein is meant to give you general information and not to give you specific legal advice.