Whenever someone is struggling financially, they wonder what they can do to make ends meet. If you are in this situation, one of the ways that you can remedy your financial hardships is through bankruptcy. There are two types of consumer bankruptcy: Chapter 7 and Chapter 13. The circumstances of your situation will determine which form of bankruptcy you are eligible for.
Chapter 7 Bankruptcy
Not everyone is eligible to file for Chapter 7 bankruptcy. This option is only available to those who have a family income that is less than the average family income in the county that you reside. If you take a means test that determines you are eligible for Chapter 7 bankruptcy, you will be able to discharge a significant amount of your debt. That being said, you will also have to liquidate a lot of your assets in order to do so.
Chapter 13 Bankruptcy
When a family has a significant amount of assets but wishes to file bankruptcy, they will often do so through a Chapter 13 bankruptcy. This allows you to keep your assets and create a payment plan for your debt that will last either three or five years. After the payment plan timeframe has ended, all remaining unsecured debt will be discharged.
Protection From Creditors
It is important to note that in both of these scenarios, you will be protected by the Automatic Stay. The Automatic Stay goes into effect as soon as you file for bankruptcy and is very powerful. Not only does it stop all collection activities including collection letters, collection calls, repossessions, bank restraints, lawsuits, and wage garnishments, it can also stop a home foreclosure in its tracks.
If you find that you are in a challenging financial situation and are unsure of how you will overcome it, it is important to speak to an experienced bankruptcy attorney about your legal options. Our firm is committed to assessing your finances and helping you navigate the bankruptcy process if that is the one that is best for you. You may have other options to consider before filing for bankruptcy so it is important to contact our firm.
Zimmet Law Group, P.C. is an experienced team of attorneys guiding clients through matters of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, and landlord-tenant law. If you require the services of an effective New York City attorney, contact our firm today to schedule a consultation.