Law Offices of Jay Silverberg

PERSONAL BANKRUPTCY

BANKRUPTCY AND DEBT RELIEF in NEW YORK AND WESTBURY

Helping People Free Themselves from the Burden of Debt

Guiding Individuals out of Financial Hardship

Is your debt a crushing burden?

Do you feel like no matter how hard you try, you cannot seem to keep up with your debt? Millions of people each year experience a financial crisis that leads to aggressive debt collection activities including:

  • Creditor harassment
  • Wage garnishments
  • Tax levies
  • Bank account garnishments
  • Foreclosures
  • Automobile repossessions
  • Debt collection lawsuits
  • Seizures of other property

Nobody wants to be in debt.  Creditors can be aggressive, rude, threatening and sometimes unscrupulous. Though there are laws that regulate debt collectors, these laws are not always followed. Filing bankruptcy STOPS collection efforts. During a bankruptcy, creditors and debt collectors cannot take any action to collect debts without permission from a bankruptcy judge. You can find immediate relief from the stress caused by financial problems and move toward a better future.

Are you burdened with debt? Are you experiencing issues like creditor harassment, repossession, foreclosure, and wage garnishment? Don’t know whether you should file for bankruptcy? Then get in touch with us. Whether you’re a business owner, individual or a joint debtor, we can help you navigate through your options. At Law Offices of Jay Silverberg, we provide effective and result-driven legal services to clients in all types of bankruptcy matters. Our bankruptcy and debt relief lawyers are ready to help you every step of the way. We strive to help you get back on track. Our team understands that the decision to file for bankruptcy is not easy. We can help you file for bankruptcy protection under Chapter 7, Chapter 11, or Chapter 13. We can help you with resolving financial disputes. And we may be able to help you save your home from foreclosure, stopping wage garnishments, and helping you make a fresh start. We are happy to answer all of your bankruptcy questions.

Unexpected events and circumstances can result in a financial hardship. Even individuals who have a good salary, emergency savings, and other resources can struggle with debt problems. A sudden illness, accident, or other major change in your life can cause you to fall behind on your bill payments. Before long, you may feel hopeless because you do not see a way out.

A bankruptcy lawyer can help guide you through the maze of options that may be available to help address your debt issues. You may not realize that there may be multiple approaches available and that only a skilled bankruptcy attorney can help you make the right decisions to minimize the hardships your are facing.

One of the first determinations that needs to be made is whether a formal bankruptcy filing is desirable. In some circumstances, it is best to wait, or to endeavor to deal with creditors outside of bankruptcy. If a bankruptcy is determined to be desirable, your bankruptcy attorney should then inform you which types of bankruptcy are available to you, and to guide you to the type that best suits your circumstances. There are three types of bankruptcy that could be available in an individual case: Chapter 7, Chapter 11 and Chapter 13. Chapter 7 and Chapter 13 have prerequisites that not every debtor will be able to satisfy. For example, because of the “means test” (described further here)  debtors may be disqualified from Chapter 7, and debtors whose debt exceeds certain debt limits may not qualify for Chapter 13.

What to Expect When You File for Bankruptcy

In many cases, bankruptcy is an affordable and effective way to get rid of debts you cannot pay. However, many people are uneasy or frightened of the consumer bankruptcy process. They are unsure what to expect when they file for bankruptcy, so they put off speaking with a bankruptcy lawyer. Unfortunately, delay in talking to an attorney can cause more financial problems. First, let’s discuss what you can expect when you file a Chapter 7 or Chapter 13 bankruptcy case.

First Step is Consulting a Bankruptcy Attorney

The first step in preparing to file bankruptcy is to meet with a bankruptcy lawyer to discuss your financial situation. Our attorney analyzes your finances and reviews various debt relief options with you. After considering your options, if you choose to file bankruptcy, the next step is to complete your bankruptcy forms. To complete your bankruptcy forms, your bankruptcy attorney needs information about your debts, property, income, expenses, and financial transactions. Your attorney obtains some of the information from your credit report and other sources. However, you need to provide some documentation and information to your attorney.

You are also required to complete the first bankruptcy court (Bankruptcy Credit Counseling Course) before your case is filed. The course is available online for a small fee and may be completed in less than two hours.Our legal staff works closely with you to gather the information necessary to complete the bankruptcy petition, schedules, and statements required by the bankruptcy court. After we prepare the required bankruptcy forms, you review each document with your bankruptcy lawyer to ensure the information is accurate and complete. Our office takes care of electronically filing the documents with the court to begin your bankruptcy case and obtain a bankruptcy case number.

What Happens Immediately After a Bankruptcy Case is Filed

A bankruptcy stay goes into effect when you file a bankruptcy petition. The bankruptcy stay prevents creditors from taking any actions to collect debts without receiving approval from the bankruptcy court. Therefore, filing a bankruptcy petition stops creditor harassment, repossessions, foreclosures, and debt-collection lawsuits. In most cases, there is nothing for you to do after your case is filed, except wait for your bankruptcy hearing date. We do recommend that you complete your second bankruptcy course (Financial Education Course) before the date of your 341 First Meeting of Creditors. The second bankruptcy course is also available online for a small fee and may be completed in about two hours. If you do need to do anything before the 341 Hearing, your NJ bankruptcy lawyer will let you know.

Attending Bankruptcy Meetings and Hearings

All debtors must attend a 341 First Meeting of Creditors. This bankruptcy meeting is scheduled within 20 to 40 days after you file your bankruptcy petition. The meeting is conducted by the bankruptcy trustee assigned to your case and lasts about ten to twenty minutes. Creditors may appear to ask questions, but it is rare for creditors to appear. During the meeting, you are required to answer questions under oath regarding your finances. The questions asked by the trustee are questions that your attorney and his staff have asked you as they gathered information and prepared your bankruptcy forms, so you already know the answers to the questions the trustee will ask.

We will prepare you for the hearing by providing detailed instructions about what you need to take with you to the hearing, how to get to the hearing location, and what to expect during the hearing. It can be very helpful to arrive at the hearing location at least 30 minutes early to watch a few cases before your case is called. The trustee asks each debtor standard questions at the beginning of each hearing. By watching a few cases, you will be more at ease and know what to expect when your case is called.  For Chapter 7 debtors, the First Meeting of Creditors is typically the only hearing they are required to attend. Chapter 13 debtors might be required to attend a Confirmation Hearing for their Chapter 13 repayment plan.

What Happens in a Chapter 7 Bankruptcy Case?

Chapter 7 bankruptcy is a liquidation bankruptcy action. When a person files for Chapter 7 relief, a bankruptcy trustee is immediately appointed. The trustee is almost always a bankruptcy attorney. In every district, there is a list (or “panel”) of qualified Chapter 7 trustees. These individuals are carefully chosen by the Office of the United States Trustee (which is part of the Federal Department of Justice). The bankruptcy trustee in a Chapter 7 case is charged with, among other things, very important aspects of administering the case, determining whether there are non-exempt assets, pursuing any claims or investigations that may lead to non-exempt assets, and distributing the assets to creditors (in accordance with their respective priorities).

One of the important functions of a trustee in a Chapter 7 bankruptcy is to liquidate non-exempt assets. Exempt assets are the assets the debtor is allowed to keep. They are described further here. {link to page on exempt assets}. Although as a practical matter, many Chapter 7 debtors have no non-exempt assets.

What is a Chapter 13 Bankruptcy?

Chapter 13 is referred to as a “wage earner” bankruptcy case because it is designed for individuals and couples who have a steady income to fund a repayment plan. Through your Chapter 13 plan, you reorganize your debts into an affordable monthly plan that allows you to regain control over your finances again.

Creditors are treated differently in a Chapter 13 plan based on the category of debt.

General Unsecured Creditors

General unsecured debts are debts that are not secured by collateral. The calculation of the amount of plan payments, and the duration of those payments, are determined based on a fairly complex analysis of the amount of your income, assets and debt. Your bankruptcy lawyer will help you formulate the plan and calculate the plan payments. Some plans require paying one hundred percent of the debtors debts over a period of time (three years of five years). Most do not (although it depends on your individual circumstances. If the debtor fully performs his or her obligations under the plan, the remaining balances owed to creditors holding general unsecured debts are discharged (other than certain claims that are not dischargeable). In other words, you have no legal obligation to repay discharged unsecured debts.
Examples of general unsecured debts include:

  • Personal loans
  • Medical bills
  • Credit card accounts
  • Most personal judgments
  • Pay Day Advances
  • Old rent payments and utility payments
  • Student loans are general unsecured debts. However, student loans are only dischargeable in a bankruptcy case if you meet certain legal requirements discussed further here.

Non-Dischargeable Unsecured Creditors

Some creditors are given priority in a Chapter 13 case because their debts are not dischargeable. Your bankruptcy plan must pay priority unsecured debts in full. Even though you cannot get rid of these debts, you can spread the payments out over the 60-month plan to make the debts more affordable to repay.

Priority unsecured debts include most taxes, alimony, child support, and other debts owed to the government.

The advantage of the Chapter 13 plan is that it allows you to catch up back alimony and child support payments through the bankruptcy court instead of being held in contempt in family court. You also do not need to worry about the IRS garnishing your wages or continuing to penalties and interest.

Secured Creditors

Secured creditors hold liens on collateral. Examples of secured debts include motor vehicle loans, boat loans, and real estate mortgages. Because you can catch up past due payments to secured creditors through a Chapter 13 plan, filing a Chapter 13 case can save your home and your vehicles. However, there are a couple of special provisions that could help some individuals even more.

If your home is worth less than you owe on your first mortgage, you may be able to treat your second mortgage as an unsecured debt. Also, if your vehicle is worth less than is owed to the lender, you might be able to value the lien at the fair market value of the vehicle to decrease what you owe to pay off the lien on your car.

Calculating a Chapter 13 Plan Payment

Calculating the payment under a Chapter 13 plan is a fairly involved and complex task. Your bankruptcy attorney should have software which makes the process easier. Several factors impact the calculation of a Chapter 13 plan payment. Some of the factors used to calculate your bankruptcy payment include:

  • Total of unsecured debts
  • Arrearage on mortgage
  • Motor vehicle loans
    Amount of disposable income
  • Non-exempt equity in assets
  • Some financial transactions that occurred before filing bankruptcy
  • Our experienced Chapter 13 bankruptcy attorney can help you calculate the lowest bankruptcy plan allowable by law. He uses his experience and knowledge of Chapter 13 to protect the best interests of our clients.

Stop Debt Collection Actions and Protect Your Property by Filing A Bankruptcy

You can stop creditor calls and threats of foreclosure or repossession by filing a bankruptcy petition, whether it is a Chapter 7, a Chapter 13 or a Chapter 11.  Just filing the petition automatically acts to stop or “stay” actions by creditors to enforce prepetition obligations or claims.  A creditor that knowingly violates the automatic stay may be deemed to be in contempt and can be subject to significant liability. So, the phone stops ringing, and creditor pressure stops almost immediately up on the filing.

What Debts are Dischargeable in a Chapter 7 Bankruptcy Case?

Medical Bills
Credit Cards
Old Utility Accounts
Pay Day Advances
Some Old Tax Debts
Most Judgment Debts
Personal Loans

Alimony, child support, restitution, and most debts owed to the government are generally not discharged in a Chapter 7 bankruptcy case. Most student loans and personal taxes are typically not dischargeable in Chapter 7. Notwithstanding that, courts will allow discharge of student loans in certain circumstances (see analysis of student loans in bankruptcy here). Some older tax debt may qualify for a discharge. Secured debts may be discharged through the Chapter 7 case, but the lien on the collateral that secures the debt is not voided.Therefore, if you want to give up a car or home that you owe more money on than the property is worth, you can surrender the property in Chapter 7. You are not required to pay any more money to the secured creditor, even if the sale of the property does not satisfy the loan in full. However, if you want to keep your car and home, you must reaffirm the debt and continue paying the loan payments on time.

Our Skilled Bankruptcy Attorney Can Help You Explore Bankruptcy In More Detail

Below are links to more detailed discussions of key issues that arise in connection with consumer bankruptcy cases

Consumer Bankruptcy Information Center

Debt Negotiation in Consumer Cases
Divorce and Bankruptcy 
Exemptions
Fair Debt Collection Practices Act 
Foreclosures and Consumer Bankruptcy 
Life After Bankruptcy 
Life During Bankruptcy 
The Means Test 
Meeting the Trustee- 341 Meetings 
Preparing Your Bankruptcy Case 
Student Loans and Bankruptcy 
Wage Garnishments and Bankruptcy

Contact Law Offices of Jay Silverberg at 1-888-355-0666 or use the contact form below for a free consultation to see if Chapter 7 is right for you.

Contact Law Offices of Jay Silverberg

At Law Offices of Jay Silverberg our team will analyze your case and determine that whether bankruptcy is the right option for you. If yes, then we will handle every aspect of your legal process, start to finish.

We will provide you with:

  • Professional Assistance
  • Strong Legal Representation
  • Quality Guidance

Which will help you make the right choice, and get out of debt smoothly, and fast.

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