In our last post, we covered some of the most frequently asked questions our clients have when entering the bankruptcy process. Let’s dive a bit deeper to consider some additional questions or concerns you may have before you file for bankruptcy.
What is Chapter 7 Bankruptcy?
Chapter 7 is a form of bankruptcy where you discharge your debts through liquidation. When you file Chapter 7 bankruptcy, the court will work with you to liquidate your property and assets to help pay off your debts. However, there are some items that are exempt from liquidation. The money you acquire in liquidation will be used to pay off your debts, with the remaining amounts being discharged.
What is Chapter 13 Bankruptcy?
Chapter 13 is another form of bankruptcy where you set up a payment plan to help pay off your debts over a period of time, typically three or five years. When you file for Chapter 13 bankruptcy, you do not need to liquidate your assets. However, you do need to stick to the payment plan the court creates. After the duration of your payment plan is complete, the remaining debt will be discharged.
When is filing for bankruptcy the wrong decision?
Filing for bankruptcy isn’t right for everyone. If you have less than $10,000 in debt or the majority of your debts are not dischargeable, filing probably isn’t the best choice for you. Bankruptcy is also not the right decision if you do not trust that you can keep the debt off after filing.
How can I begin the bankruptcy process?
If you would like to file for bankruptcy, you must first go through a credit counseling session within 180 of your filing. In order to submit your bankruptcy filing, you must also prove that you completed the session with an approved agency. For help finding a credit counseling session, contact the bankruptcy attorneys at Michael F. Kanzer & Associates.
You shouldn’t try to file for bankruptcy alone. If you have additional questions about the process or you’d like to speak with an attorney about getting started, contact the Michael F. Kanzer & Associates Brooklyn bankruptcy attorney’s office at 718.769.7200.