Bankruptcy Overview

Many homeowners and consumers are nervous and intimidated by the thought of filing for bankruptcy. However, it is a process that will provide a consumer with the immediate sense of relief and the ability to start anew financially and emotionally.

With a veteran bankruptcy attorney such as those at The Green Law Group, the process can be relatively fast and pain-free.  Regardless of which type of bankruptcy you qualify for, the bankruptcy law and automatic stay issued upon filing, immediately stopping the harassment and stress you receive from bill collectors, foreclosure proceedings, collections, garnishments, and frozen accounts.  After filing a petition for bankruptcy, you will begin on a path of reorganizing your debt or restarting your life debt-free.

No matter how you arrived at your financial crisis, Chapter 7 bankruptcy provides a sensible and practical way out of debt.  It is particularly useful for consumers who have far too much unsecured debt such as credit card bills, medical bills and personal loans.  Chapter 7 is a method of discharging your debt and start over from scratch. Typically, upon filing a Chapter 7 petition in Bankruptcy Court, an automatic stay goes into place which stops creditors and debt collectors in their tracks.

Individuals filing for Chapter 7 bankruptcy are allowed to keep certain types of exempt property.  The types and amounts of exempt property that can be claimed vary from state to state.  Assets other than the exempt property are sold by a trustee appointed by the bankruptcy court.  These assets are sold off to repay creditors.  However, regardless of whether assets are sold or not, many types of unsecured debt will be legally discharged, relinquishing you of any obligations to pay these creditors back.

In order to qualify for Chapter 7 relief, you must pass a “means test” and have not had a bankruptcy case dismissed during the past 180 days or have filed a previous Chapter 7 bankruptcy within the past eight years.  Contact The Green Law Group to determine if Chapter 7 bankruptcy is the right solution for you.

You may also file for Chapter 7 relief if you have secured debts as well, such as a mortgage or car note.  However, a debtor with such secured debts may be required to surrender the collateral on these debts in order to obtain a discharge of these secured debts, although a great majority of the cases allow a client to keep both their home and car.

One of the great advantages of Chapter 7 bankruptcy is the speed in which a debtor is provided the much needed relief they are seeking.  On average, a Chapter 7 proceeding lasts approximately 90 days from filing to discharge.  Within approximately 30-45 days of filing the petition for Chapter 7 bankruptcy, a hearing is conducted with a Chapter 7 Trustee and a Notice of Discharge is typically issued in approximately 60 days from this hearing.  The creditors involved in this petition are notified of the hearing and have a right to attend.

It is important to note that certain debts such as tax liability debts, child and spousal support, student loans and government fines, will not be eliminated by filing for Chapter 7 relief.

Chapter 13 Bankruptcy is a process that does not immediately discharge an individual from all their debt, but rather, it enables them to pay off their debts over time, typically 3 to 5 years.  Debtors who elect Chapter 13 bankruptcy are those who have valuable assets such as a home or vehicle that they would like to keep, but they have become overcome by debt and creditors they cannot pay. Because Chapter 13 bankruptcy provides debt relief, a debtor seeking this type of relief must have a viable source of income in order to prove they will be able to pay down their debt over time.

The greatest advantage of Chapter 13 bankruptcy is that it allows a debtor to keep their property while simply paying off their debts over the course of time, all according to a court-approved plan.

Business Bankruptcy

Any formalized entity of business can file for Chapter 11 bankruptcy in accordance to United States Bankruptcy Code Title 11, Chapter 11 and under the terms of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Included in the entities able to reorganize and restructure under Chapter 11 bankruptcy include:

  • Sole Proprietorships
  • Partnerships
  • Limited Liability Partnerships
  • Limited Liability Corporations
  • Corporations
  • Co-operatives and Non-Profits

When utilizing a Chapter 11 restructuring, companies face the prospect of continuing business in light of current debt obligations. For executives and employees, the possibility of maintaining jobs, an income source, and retaining all assets used in producing this income are all retained. Furthermore, companies have been known to emerge from Chapter 11 bankruptcy and regain full control of their enterprise once again rather than full liquidating their assets. A bankruptcy court will supervise a company under Chapter 11 bankruptcy, manage the organizations debt, and contract obligations. Under the guidance of federal law, bankruptcy courts can discharge certain debts and contractual obligations in certain circumstances. In other instances, creditors will entirely take over a company in the event the organization’s debts outweigh the current assets.Under the mediation of the bankruptcy courts, creditors and debtor companies meet to discuss plans for reorganization and restructure. Typically, a debtor company has a specific period to offer a plan of reorganization, which will include methods to satisfy existing debts, cuts in expenditures, and potential incomes. Creditors will then vote to agree or disagree on the plan, or if no plan is presented, creditors have the opportunity to present their own agenda. The court will decide whether each party is receiving treatment in the fair and equitable interest of resolving the matter at hand.

Brooklyn Bankruptcy Advice
Queens Bankruptcy Advice