Chapter 13 Plan in New York City can Help if You are considering a Chapter 7 Bankruptcy.
Filing Chapter 13 instead of Chapter 7 is not for every New Yorker thinking about bankruptcy protection, but Chapter 13 can often provide the most overall protection for an individual or family facing financial difficulty. Instead of liquidating your assets in return for a discharge of your debts (Chapter 7), a Chapter 13 requires you to repay at least a portion of your past due debts but allows you to keep your secured property moving forward. The core of the Chapter 13 process is the Chapter 13 repayment plan, and if negotiated correctly you will be well on your way to a fresh start and true financial relief on day one. The plan will lay out exactly how you will repay your debts, who gets repaid, and in what order. Any person living in New York City that has encountered a short or long term but severe financial burden should look into Chapter 13 along with their Chapter 7 bankruptcy options.
If you file a Chapter 13 bankruptcy you will work with your bankruptcy attorney to devise a repayment plan to propose to the bankruptcy court. Generally speaking, there are three types of debt categories to consider in a Chapter 13 plan, priority debts, secured debts and unsecured debts. The types of debts you have will determine how much of your debt will need to be repaid. Some creditors will receive no repayment, and others will receive only pennies on the dollar. There are some creditors that are entitled to 100% of what you owe them, but even if they are to be repaid in full with the elimination of your other debts your overall financial situation will significantly improve. The repayment plan also allows debtors to decide what secured property they would like to keep and what they would like to surrender such as a car or home. With the generous exemptions available through the New York State and Federal exemption systems most of our clients surrender very little if any of their property while having their bad debts like credit card bills, and medical bills eliminated through the plan. Once your plan is approved by the bankruptcy court you make a payment to the bankruptcy trustee who in turn pays your creditors. You will never have to deal with the creditors again, and any further communication from them is in violation of the FDCPA and grounds for a lawsuit against them. Because Chapter 13 requires you to make regular monthly payments to the bankruptcy trustee for 3-5 years it will require more dedication on your part as opposed to a straight Chapter 7. You need to make every payment on time to make your plan work which might require you and your family to tighten the belt for a couple of years. But remember, your plan payment will be far less than your combined debt burden is now.
The Chapter 13 Plan will control your financial life until it is concluded but will eliminate your debts with the full power of bankruptcy law. There is simply no more complete debt relief solution than bankruptcy, and a Chapter 13 should always be considered with a Chapter 7. It is important to maximize every possible benefit and take advantage of all of the available bankruptcy exemptions to be successful. Sometimes our firm will recommend converting a Chapter 7 to a 13 or vice versa or even filing both a Chapter 13 and a Chapter 7 (Chapter 20) in some cases. In any event there is a lot to know, Chapter 13 can be complicated and you need the best bankruptcy attorney available to help in New York City. If you live in New York City contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today. We primarily practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 9/31/16.
**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients. Attorney Advertising. We are a Debt Relief Agency and help people file for Bankruptcy.