Unforeseen circumstances can sometimes make filing for bankruptcy the only option. However, you shouldn’t be worried because our Jamestown bankruptcy lawyers are here to help. We will make sure to give you our expert financial advice and will support whatever decisions you make. Here is some important information on the bankruptcy process in New York State.
Bankruptcy Process in New York State | Types of Bankruptcy
There are six kinds of bankruptcy under US federal law, all of which are named after the chapter of Title 11 of the United States Code: Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13, and Chapter 15. Of these, it is predominantly under Chapter 7 and Chapter 13 that private citizens rather than businesses file their bankruptcy claims.
Bankruptcy Process in New York State | Chapter 7
While Chapter 13 is reserved for setting up a repayment plan for bankrupt people to repay their creditors over time, Chapter 7 helps people to eliminate many of their debts, absolving them of any further responsibility to pay off these lingering debts. Essentially, a Chapter 7 bankruptcy informs creditors that an individual simply does not have and will not have the money to pay off all given loans, and most lenders will be legally mandated to cancel that person’s debts.
Some regular expenses and debts will remain, and these can include student loans, alimony, and fines. Home mortgages and car loans are likely to be exempt from bankruptcy as well, and if you have elected to file for a Chapter 7 bankruptcy, you will be required to continue making regular payments or risk the bank repossessing your home and car. Before you file for Chapter 7 bankruptcy, you will need to speak with a bankruptcy attorney in order to better prepare for the debts that your declaration of bankruptcy will not erase. Without a home or motor vehicle, it will be significantly more difficult to continue paying off the debts that persist following a filing.
Bankruptcy Process in New York State | How to File
Because bankruptcy is such a major undertaking for every person and entity involved, those who opt to file for Chapter 7 bankruptcy must demonstrate absolute need. As such, if you wish to file, you will be required to provide a profusion of financial documents including but not limited to a list of your current expenses and income, a copy of your most recent tax return, a record of all your pending student loans and the accrued interest, and a certificate showing completion of a credit counseling course. This may sound like a great deal of work, but it is merely the first step in a journey lasting several months before you will be able to complete your Chapter 7 bankruptcy filing.
If you need more information on the bankruptcy process in New York State, please contact our experienced Jamestown bankruptcy lawyers at Humble Law Offices today to schedule a free consultation.