A fresh start under the protection of the bankruptcy court
A fresh start, under the protection of the court
Bankruptcy is a federal legal process that lets people and businesses deal with debts they cannot pay. The moment a case is filed, the "automatic stay" generally stops collection calls, lawsuits, wage garnishments, bank levies and foreclosure sales. Depending on the chapter, debts can be wiped out or paid over time through a court-approved plan.
Our attorneys practice in the U.S. Bankruptcy Courts for the Eastern, Southern and Northern Districts of New York.
Which chapter fits?
- Chapter 7 wipes out most unsecured debt, such as credit cards, medical bills and personal loans, usually in a few months. It is available to people whose income passes the means test.
- Chapter 13 sets up a three to five year repayment plan. It lets you keep property, catch up on a mortgage or car loan, and stop a foreclosure.
What bankruptcy can and cannot do
Bankruptcy can discharge most credit card debt, medical bills, personal loans, many old judgments and deficiency balances. It generally does not discharge child support or alimony, most student loans (unless repaying them would be an undue hardship), recent taxes, most fines and penalties, or debts from fraud.
Before and after filing
- Everyone must complete a credit counseling course from an approved provider within 180 days before filing, and a debtor education course before receiving a discharge.
- You list all of your assets, debts, income and expenses, and you attend a meeting of creditors with the case trustee.
- Exemptions protect property such as some equity in a home, a car, retirement accounts and household goods. New York and New Jersey allow a choice between state and federal exemptions.
Alternatives we also consider
Bankruptcy is not always the best answer. We also negotiate with creditors, defend collection lawsuits, and help business owners with merchant cash advance problems. See personal debt relief.
Frequently asked questions
Will I lose my home if I file bankruptcy?
Not necessarily. Exemptions protect some home equity, and Chapter 13 is designed to let homeowners keep their homes and catch up on missed mortgage payments over time.
Does filing stop a foreclosure or garnishment?
In most cases, yes. The automatic stay takes effect when the case is filed and generally stops foreclosure sales, wage garnishments, bank levies and lawsuits while the case is pending.
Can student loans be discharged?
Usually not, unless repaying them would impose an undue hardship, which requires a separate proceeding in the bankruptcy court.
Which courts do you practice in?
Our attorneys practice in the U.S. Bankruptcy Courts for the Eastern, Southern and Northern Districts of New York.