The Benefits of Chapter 13 Bankruptcy in New York City
The end result of all bankruptcy types are essentially the same – a fresh start from your financial troubles and a second chance at a debt free life. The different bankruptcy chapters provide individual consumers various types of benefits but the end goal of relieving consumers of their unmanageable debt is the same. Your particular financial situation and long term financial goals along with the guidance of a qualified bankruptcy attorney in New York will help determine if Chapter 13 bankruptcy is right for you.
Upon filing a Chapter 13 bankruptcy case the collection efforts of all of your creditors will be stopped and a payment plan will be created and agreed upon that will have you repay a portion of what you owe back to your creditors. The repayment plan is negotiated by your attorney and overseen by the bankruptcy court and lasts three to five years.
One of Chapter 13 bankruptcy’s primary benefits is that it will immediately prevent the foreclosure of your home, the repossession of your car, as well as stop any wage garnishment. Calls, letters, and any other collection actions are halted on all of your secured and unsecured debt. The plan allows you to spread the payments out to your creditors and catch up on what you owe over time without having to come up with the past due funds on the spot.
Another primary benefit of a Chapter 13 bankruptcy is that it will prevent the seizure of any of your valuable property by your creditors. Chapter 7 offers some protection of your property through New York’s state exemptions, but does not protect all of your property from liquidation. So if you have significant equity in your home a Chapter 13 bankruptcy discharge will protect your hard earned asset and eliminate your credit card debt.
In addition to preventing the loss of your property, Chapter 13 will also allow you eliminate your unsecured debt including credit cards and medical bills. Different types of debt have higher priority under the eyes of the law, and in a Chapter 13 bankruptcy credit card companies will typically receive no more than 5% of what you owe to them. Once you complete the negotiated and manageable repayment plan you will be debt free and caught up on your house and car payments to boot.
Chapter 13 bankruptcy helps our clients pay their mortgages and car loans, protect their valuable assets, and eliminate their credit card debt but can have other benefits as well. Tax debts and student loans for example are considered to be high priority debts under the law and cannot be discharged. These debts are owed regardless of your bankruptcy so are often best managed under a Chapter 13 payment plan since they would not be discharged under a Chapter 7.
Not everyone is eligible or able to swing the Chapter 13 repayment plan. The first thing people want to know is how much their monthly payment to the trustee will be. Not all debt is viewed the same under the law, and the various state exemptions and legal strategies will not be the same for every Chapter 13 case. It is of the utmost importance to work with a qualified bankruptcy attorney familiar with all the complexities. Filing for a complex bankruptcy without an attorney or through a petition preparation service is rarely successful.
You may be a clear candidate for a Chapter 13 filing, or you may need to understand the pros and cons of both Chapter 7 and 13. A qualified attorney will know the best course of action. We have found sometimes it’s even best to convert one type of filing to another midway through the process. Working with a qualified firm that understands this strategy is essential.
If you live in New York City and have questions about Chapter 13 bankruptcy and how your situation will improve please call the offices of William Waldner today at 212-244-2882 for a free bankruptcy consultation. We will help you keep your home, cars, valuable assets, retirement accounts and eliminate the toxic credit card or medical debt through Chapter 7 or 13 Bankruptcy.
This article is intended for educational purposes only. By reading this article no attorney-client relationship has been created.