Unlike Chapter 7, when you file a Chapter 13 in New York City you will get to keep your property but will have to repay a portion of your debts over time through a court monitored repayment plan. Your debts will be re-organized into one monthly payment to a bankruptcy trustee who will then distribute funds to your creditors accordingly. Once you file Chapter 13 your creditors must immediately cease any and all collection attempts against you and must also halt any pending foreclosure or repossession of your property. For people on the verge of losing their home, filing a Chapter 13 bankruptcy will often be the best way to stop a foreclosure or eviction in its tracks allowing them to catch up on past due payments over time. In New York City Chapter 13 is also the only form of bankruptcy that can prevent the sale of a rent stabilized apartment lease or eviction from a rent stabilized apartment.
Not every debtor in New York City will immediately qualify for Chapter 13. You must prove to the court that you will be able to afford your monthly Chapter 13 plan payments by showing a regular income. Not every person filing Chapter 13 has a regular job, but they need to show income of some sort to satisfy the court. If you are recently unemployed speak to an attorney about your Chapter 13 options. Too many debtors in New York City that have recently lost a job assume they can only qualify for Chapter 7. Many law firms are also only interested in filing Chapter 7 cases so it up to you to make sure you are aware of all of your bankruptcy relief options.
The brief rundown of Chapter 13 is as follows. First, contact a qualified bankruptcy attorney in New York City familiar with Chapter 13 and Chapter 7 cases as well as converting between or combining the two forms of bankruptcy. Sometimes filing a Chapter 13 first, and then a Chapter 7 can offer the most protection. Converting from a Chapter 13 to a 7 or vice versa can also be very beneficial for some filers. After finding the right attorney you will need to complete a brief credit counseling course before you can file. This course can be completed online or on the phone. The Consumer Credit Course must have been taken within 6 months of filing Bankrutpcy or your case will be administratively thrown out. Once this course is completed you will be ready to file and the majority of the work will now be in the hands of your attorney.
You will work with your attorney to devise a re-payment plan to propose to the bankruptcy court. The plan will lay out exactly how much you will repay each of your creditors and for how long. Priority debts like child support, alimony and certain taxes need to be repaid in full. Secured debts like mortgage payments and car loans must also be entirely repaid. Almost all other unsecured debts including credit card bills, medical bills and personal loans are then eliminated outright or at only pennies on the dollar. The length and duration of a Chapter 13 plan in New York City will depend on how much you owe and how much you earn, but almost all repayment plans are completed in 3-5 years. Your average income for the six months prior to filing is compared to the median household income for New York City. How you compare to the median will affect the amount and duration of your plan. At the end of the plan any remaining unpaid debts are eliminated entirely.
So you need to find a good attorney, take a couple of brief classes that are no big deal and also appear for a brief and straight forward hearing at the bankruptcy court accompanied by your lawyer. Once your plan is confirmed you need to stick to what you proposed, but after 3-5 years you will be entirely debt free and will have also saved all of your valuable property. For most New Yorkers in serious debt trouble this usually works out to be a great deal. Chapter 13 has many nuances and complexities, but with the help of the right attorney it can provide the best possible fresh start for you and your family. Most clients are pleasantly surprised to hear how fast a Chapter 13 bankruptcy can help and are even happier to learn they can pay for most of their legal fees through the plan as well. 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 over 99% Chapter 7 bankruptcy discharge record in New York City for chapter 7 cases filed as of 9/11/15.
**** 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.