What is Bankruptcy?

Bankruptcy represents a new chance for people. Through it, one can discharge their debt and get a fresh start. A decision to file for bankruptcy should be made only after determining that it truly is the best way possible to deal with your financial problems. Making this decision is very important and life changing and at the Queens based full-service bankruptcy firm of Shiryak, Bowman, Anderson, Gill & Kadochnikov LLP, we can help you through all the steps that come after making the initial leap to file for bankruptcy. To combat the onslaught of crippling debt, our attorneys can guide consumers and businesses through the bankruptcy process to aid in attaining your objectives in this tricky process.

Types of Bankruptcy

  • Chapter 7
  • Chapter 13

Chapter 7

Chapter 7 is the most common of all types of Bankruptcy. In this situation, you, “the debtor”, are seeking a complete discharge of all your debts: like magic, all the debt vanishes into thin air. Of course, not every person or business can declare Chapter 7 Bankruptcy and sometimes it’s not as simple as it looks. If you want to keep property like a home or a car and are behind on the mortgage or car loan payments, a Chapter 7 case probably will not be the right choice for you. That is because Chapter 7 Bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.

The three most important questions in Chapter 7 Bankruptcy are as follows:

  • Are you eligible?
  • What assets or property do you have?
  • What kind of debt do you have?

Upon getting a free consultation, our attorneys can take the initial steps in determining what steps are next in the bankruptcy process. Our diverse team of attorneys will always take the time needed to ensure that a client leaves our office with peace of mind. 

Chapter 13

Chapter 13 Bankruptcy is a form of Bankruptcy designed to help consumers keep their homes and other valuable property or is used when a consumer’s income is too high to file Chapter 7 Bankruptcy. If your income is above the median family income in your state, you may consider filing a Chapter 13 case. In Chapter 13 Bankruptcy, the debtor structures a repayment plan supervised by the Bankruptcy court. The plan is designed to help the consumer get back on track and consolidate the debt into a monthly payment schedule. The length of payment plans range from three to five years. Our driven team of attorneys has over 20 years worth of experience, which means there is no bankruptcy situation that they haven’t handled before.

What you need to know

It’s important to know a creditor is able to freeze a bank account after they have obtained a judgment against the consumer. In many instances, the consumer’s first notice of a judgment entered by a creditor is a frozen bank account. NOT all creditors, credit card companies or collection agencies follow the proper procedures to obtain a judgment and give the consumer a chance to be heard. Once your account is frozen, the only way to unfreeze the account is by court order. The filing of a Chapter 7 or Chapter 13 bankruptcy immediately stops your creditors from removing any money from the frozen account and allows the restriction on the account to be lifted. Depending on the type of Bankruptcy case you have filed, you may have immediate access to your money. You, as a consumer, should be aware that most financial institutions freeze twice the amount of the judgment.

A consumer’s wages are garnished–or withdrawn by a court order that directs that your wage be seized in order to satisfy a debt–after a creditor has obtained a judgment against the consumer. The filing of either a Chapter 7 or Chapter 13 Bankruptcy will immediately stop any wage garnishment and in many instances, subject to the bankruptcy regulations, restore you to full pay.

Are you eligible? have more questions about debt? contact someone who can help below.

Contact Mark Anderson