No. In a nutshell Chapter 13 allows you to keep your property in exchange for repayment of at least some of your debts. Also known as a “Wage Earner’s Bankruptcy” Chapter 13 is designed for individuals or married couples who are earning at least some income between them and are able to repay a portion of their past due debts over time. Assuming you can keep up on your payments you can save a car or home even if you are way behind on payments or even on the verge of repossession or foreclosure. Your Chapter 13 plan will allow you to address the past due payments for secured property, while continuing to make the regular monthly payments moving forward. Also, after your 3-5 year repayment plan concludes any remaining unsecured debts will be wiped out forever, meaning those who file Chapter 13 in New York usually wipe out credit card debts, medical bills and personal loans at only pennies on the dollar while saving property that would have otherwise been surrendered to the bankruptcy trustee.
In New York City most people that choose Chapter 13 bankruptcy are those who:
- Need to protect Rent Stabilized Apartment Leases- there is a scary trend rising among some bankruptcy trustees in New York City that now see rent stabilized apartment leases as assets that could be liquidated to satisfy creditors in a Chapter 7. Only filing a Chapter 13 from the beginning is the best way to protect a rent stabilized lease. (Update: Recent case law has held that these leases are generally exempt in Bankruptcy: Click Here==> Rent Stabilized Leases Article/)
- Have significant property that would not be exempt in a Chapter 7 case.
- Want to avoid foreclosure or repossession by repaying past due mortgage payments or car loan payments over time.
- Have enough monthly disposable income to repay some of their past due debts over a 3-5 year repayment period.
- Have debts like student loans and certain tax liabilities that would not be discharged in a Chapter 7.
Once your Chapter 13 plan is confirmed your creditors are forced to agree to its terms. They must cease any and all collection attempts against you and your spouse (even if they are not filing). Any communications from your creditors after you have filed bankruptcy is grounds for a lawsuit as they may be in violation of the FDCPA (Fair Debt Collection Practices Act) and bankruptcy code. In fact many Chapter 13 debtors are able to entirely fund their bankruptcy through the illegal actions of their creditors. It can feel nice to turn the tables on a nasty creditor and to know that they are paying for the bankruptcy protection you need. Choosing a debt consolidation program in lieu of bankruptcy will leave you with creditor harassment, continued interest, hidden fees, and possible judgments against you. Filing Chapter 13 will actually provide the fresh start you need while other options outside the court can often just make matters worse.
Chapter 13 bankruptcy in New York City is actually the best way to save property that is close to being taken for non-payment. Instead of taking your property Chapter 13 protects it. Most clients are pleasantly surprised to hear how fast a Chapter 13 bankruptcy can help. 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 mainly practice bankruptcy law and maintain a n over 99% Chapter 7 bankruptcy discharge record in New York City as of 9/11/2015.
**** 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.