What Happens When You Declare Bankruptcy in Brooklyn, NY?

Declaring bankruptcy can be a daunting and overwhelming experience, especially when considering the complexities of the legal process in a bustling city like Brooklyn, NY. If you’re struggling with debt and considering bankruptcy as an option, it’s essential to understand what happens when you declare bankruptcy in Brooklyn, NY. Fortunately, we have all the information you need to know on this topic!

If you would like to schedule a consultation with Mr. William Waldner, please reach out by phone or text at 212-244-2882. Our consultations are free and for information purposes only. You can then decide if you would like to move forward and if bankruptcy is the best option for you!

Understanding Bankruptcy Options

In Brooklyn, NY, there are two primary types of bankruptcy options: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Liquidation Bankruptcy

In a Chapter 7 bankruptcy, a trustee is appointed to sell some of your assets to pay off your creditors. This type of bankruptcy is often referred to as “liquidation bankruptcy.” You may be able to keep certain assets, such as your primary residence, car, and retirement accounts, depending on the exemptions available in New York State.

Eligibility

To be eligible for Chapter 7 bankruptcy, you must pass the “means test,” which determines whether your income is below the median income for a household of your size in New York State.

Chapter 13 Bankruptcy

Reorganization Bankruptcy

In a Chapter 13 bankruptcy, you create a repayment plan to pay off a portion of your debts over a three- to five-year period. This type of bankruptcy is often referred to as “reorganization bankruptcy.” You’ll make monthly payments to a trustee, who will distribute the funds to your creditors.

Eligibility

To be eligible for Chapter 13 bankruptcy, you must have a steady income and owe less than $394,725 in unsecured debts and $1,184,200 in secured debts.

The Bankruptcy Process in Brooklyn, NY

Regardless of which type of bankruptcy you choose, the process typically involves the following steps:

1. Pre-bankruptcy credit counseling: You’ll need to complete a credit counseling course approved by the U.S. Trustee’s Office within 180 days before filing for bankruptcy.
2. Filing for bankruptcy: You’ll file a petition with the U.S. Bankruptcy Court for the Eastern District of New York, which covers Brooklyn, NY.
3. Automatic stay: Once you file for bankruptcy, an automatic stay goes into effect, which temporarily halts creditor collection activities.
4. Meeting of creditors: You’ll attend a meeting with your creditors, where you’ll answer questions about your financial situation and bankruptcy filing.
5. Trustee administration: A trustee will be appointed to oversee your bankruptcy case and ensure that your creditors are paid according to the bankruptcy plan.
6. Discharge: Once you’ve completed the bankruptcy process, you’ll receive a discharge, which releases you from personal liability for the debts included in your bankruptcy filing.

Benefits of Declaring Bankruptcy in Brooklyn, NY

Declaring bankruptcy in Brooklyn, NY, can provide several benefits, including:

• Fresh start: Bankruptcy can give you a clean slate and a fresh start, allowing you to rebuild your financial life. Many people assume that bankruptcy is a “last resort,” but this isn’t necessarily the case. In fact, waiting longer to file bankruptcy can actually cause more financial damage in the long run. Getting a fresh start now allows you to get your finances in order, improve your credit score, and move on in your life.
• Protection from creditors: The automatic stay can provide temporary relief from creditor harassment and collection activities. Once the automatic stay kicks in, you are protected, and you can start focusing your energy and building a new path forward.
• Debt relief: Bankruptcy can eliminate or significantly reduce your debt burden, giving you a chance to start anew. Despite common misconceptions, bankruptcy is not a sign of failure or lack of discipline. Things happen to people—divorce, medical bills, job loss—and it’s important to have tools to help them through these hard times. Bankruptcy is exactly that, a tool.

Conclusion

Declaring bankruptcy in Brooklyn, NY, can be a complex and intimidating process, but understanding your options and the bankruptcy process can help alleviate some of the stress and uncertainty. If you’re struggling with debt and considering bankruptcy, it’s essential to consult with a qualified bankruptcy attorney who can guide you through the process and help you achieve a fresh start. Request your free consultation with The Law Office of William Waldner today.