Q: Should you consider Bankruptcy?
- Are you overwhelmed by debt?
- Do you have trouble sleeping because you are worrying about paying your bills?
- Are you being harassed by bill collectors?
- Are you paying one credit card with another?
- Are your wages being garnished?
- Are you fighting with your spouse over money?
A: If you answered yes to any of these questions, it’s time to take action now and call Michael F. Kanzer & Associates, P.C. We will give you personal attention, and see if bankruptcy is right for you.
Q: What are the different types of Bankruptcy?
A: In the United States, the two most common forms of bankruptcy available to individuals and families are Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Chapter 11 Bankruptcy is available to businesses that are experiencing financial problems.
Q: Does bankruptcy eliminate all of my (or my business’) debt?
A: Chapter 7 Bankruptcy, is also referred to as “liquidation.” It eliminates most of an individual’s unsecured debt. The debts that Chapter 7 Bankruptcy eliminates include the following:
- Credit Cards
- Many Types of Loans
- Medical Bills
- Consumer Debt and Collections
- Debt from Unpaid Rent and Utilities
- Business Debt
However, it does not discharge all of a person’s debt. The following financial obligations are not usually discharged under Chapter 7 Bankruptcy:
- Alimony/Spousal Support
- Child Support
- Court Fines or Penalties
- Debt to the Government
- Income Tax, Property Tax, or Other Tax Debt less than 3 years
- Personal Injury Damages or Restitution
- Student Loans (except in extreme hardship cases)
Chapter 13 Bankruptcy differs from Chapter 7 Bankruptcy. It does not eliminate debt, but instead consolidates a person’s debt and restructures it into workable monthly payments. When filing for Chapter 13 Bankruptcy, you are afforded a specific timetable (typically three to five years) to pay off a reduced portion of your debt each month. Although Chapter 13 does not completely eliminate your debt, it restructures to make it manageable.
Regarding business bankruptcy, under Chapter 11 Bankruptcy, a business may continue operations while it restructures or reorganizes its debts and finances. Chapter 11 Bankruptcy proceedings award businesses protection from creditors during the reorganization and restructuring period.Q: What impact does a bankruptcy have on my credit report?A: A bankruptcy appears on a personal credit report for up to 10 years. Although not ideal, banks and businesses may still loan you money and help you to re-establish good credit. Any new loans may be awarded at somewhat higher interest rates, but for most people, the slight increase in such finance charges is minimal in comparison to the previous payment amounts demanded by creditors prior to filing for bankruptcy.
Q: Will I lose my house, my car, or my other personal property?
A: Every situation is different, but in most cases, no. Remember, as described on our Bankruptcy page the purpose of Bankruptcy is to allow individuals to recover from insurmountable debt without losing everything they have worked to attain. Most of our clients retain their homes, cars, and other assets. After we discuss your individual situation in a free consultation, we will be much better able to provide insight specific to your case.
Q: After a bankruptcy, will I reasonably be able to establish new credit?
A: Yes. In fact, you will likely have a better chance of establishing credit once your current debts are erased than if you were to apply for additional credit while under an unmanageable debt-to-income ratio prior to your bankruptcy. Banks, credit card companies, and retailers are in business to make money, and it is common for them to extend credit to people even after a bankruptcy. You may pay a slightly higher interest rate on any revolving debt or outstanding balances, but lending institutions and other creditors are often willing to give you the opportunity to re-establish credit once your slate is wiped clean. Many actually consider you less of a credit risk at that point.
Q: What is my next step?
A: Call us. To do it right, you need the security, peace of mind, and experience of a seasoned, knowledgeable legal professional to examine your unique situation and help you make the right choices. Our legal system is laden with numerous technicalities and loopholes, as well as a heavy burden of complexities. Having a lawyer by your side offers you the protection you need to ensure nothing is overlooked. As your Law Firm, we can also eliminate the harassing abuse and threats of creditors who call you night and day. We’re on YOUR side, and we can help you get your financial picture pieced back together.
For more informative reading, please visit the following article and resource links related to Bankruptcy:
- Equifax: 1.800.685.1111 www.equifax.com
- Experian: 1.888.397.3742 www.experiandirect.com
- TransUnion: 1.800.916.8800 www.transunion.com
- Study Ties Bankruptcy to Medical Bills
- Downturn Drags More Consumers Into Bankruptcy
New York City’s Department of Consumer Affairs provides information regarding Debt Collection practices within the City of New York. See the following website: http://www.nyc.gov/html/dca/html/resources/law.shtmlScroll down the page to section “5-77 Debt Collection Practices.”Useful Bankruptcy Websites: