Chapter 7 Bankruptcy
Will I ever get credit again if I file for Bankruptcy?
Yes, of course you will. Despite what some people may have told you, Bankruptcy is not the end of your credit forever. In fact, most Bankruptcy clients can expect to receive new credit in a very short period of time. Many clients have been able to purchase homes and cars within only a few short years after filing (sometimes shorter).
Should I try Debt Settlement First?
NO! The vast majority of debt settlement plans do not work. The statistics are out there. Further, it can take so much more time to effectively settle all of your debts, which impairs your credit in the interim. Bankruptcy should not be the last step taken if you feel you’re in over your head.
How long does the Bankruptcy process take?
Each case is different, but typically, the process from start (filing) to finish (receiving a discharge) takes approximately 90 days.
Can I file for Bankruptcy if I own a home?
Yes. In New York, the Bankruptcy exemption limits have been raised significantly. You can now exempt up to $150,000 in equity in your primary residence. In plain English, that means you have a very good chance of keeping your home if you file.
Will the creditors keep calling me after I file?
Absolutely not. It’s against federal law for creditors to contact you after you’ve filed Bankruptcy. They could be subject to a lawsuit and penalties. The calls stop once you file.
Is it normal to feel embarrassed or ashamed about filing?
Absolutely. Look, in reality, no one feels good about filing for Bankruptcy. However, once the process is done, many of our clients (in fact, most) say that they feel as if a weight has been lifted. We understand the feelings you’re going through, and that’s why we walk you through the process every step of the way.
Do you offer consultations?
Yes, we offer free 30 minute (we don’t really keep track of time) consultations to discuss your case, both in person and on the phone.
What if I make a lot of money after I file Chapter 7 Bankruptcy
“What happens if I make a lot of money after I just filed a Chapter 7 Bankruptcy?” is a question our Bankruptcy attorneys get all the time. The answer is-nothing. If your Bankruptcy case has been closed by the Court, you’re free to make however much money you like (provided you didn’t, you know, lie about how much money you actually made during your Bankruptcy filing.) The one caveat is if someone dies and leaves you any money. If that happens within 6 months of your Bankruptcy filing, you MUST tell your attorney or the Trustee, as that money can be considered property of the Bankruptcy estate in New York. Barring that, you can make all the money you like and be totally fine. This is a popular misconception surrounding filing for Bankruptcy in New York. The Courts have no desire to “penalize” you for filing. It’s your right to file. It’s a way to clear out your old debts. There are no tricks here. If you filed Chapter 7 Bankruptcy in New York, and your case was closed, you can go on and be as successful as anyone else.
Can I keep my rent stabilized apartment if I file Chapter 7 Bankruptcy in New York City
Yes, yes you can.
For a while, Bankruptcy attorneys were on edge because of a case involving a woman who filed for Bankruptcy and had a rent stabilized apartment. The Chapter 7 Trustee tried to claim that the apartment was part of the Bankruptcy estate, and therefore that he could sell the apartment back to the Landlord and kick the tenant out. This scared a number of people in New York. Individuals that wanted to file for Chapter 7 Bankruptcy were scared that if they filed such a case, their apartments (that they could sometimes barely afford) would be taken away and they’d have nowhere to go. Bankruptcy attorneys were similarly scared and didn’t want to file these types of cases for the same fear of having their clients be kicked out of their apartment.
The Court case made it’s round across the New York State Court system, finally ending up at the 2nd Circuit Court of Appeals. The Court of Appeals ruled in favor of the tenant, and stated that the rent stabilized lease was in fact a public benefit and therefore exempt as property of the estate. You can read much more about the court decision here (Alex please cite my blogpost where I wrote about this-Evernote won’t let me.)
So, if you’re wondering whether or not you have to fear losing your apartment if you file a Chapter 7 Bankruptcy in New York City, the answer, for all intents and purposes, seems to be no.
Can the Bankruptcy Trustee take my IRA, 401k or Pension.
If you’re filing for Bankruptcy in New York City, you’re inevitably going to fear the Trustee taking your retirement funds. You worked your entire life and you want to make sure that those monies are protected if you do in fact file for Bankruptcy.
Good news. They are.
Under the New York Exemptions, there is no limit to the exemption you have for your pension and retirement plans. You’ll find this under Debtor & Creditor Law Section 282(iii)(2). If you go looking for that, please do not call our office (kidding…kind of).
If you’re filing under the Federal Exemptions (Sections 522(d)(12) and 522(b)(3)(c)), there is, again, no limit to the exemption you have in your pension and retirement plans so long as they are in a fund that is tax exempt.
Again, it’s important that you speak to a Bankruptcy attorney about this before filing. Why? Although this seems straightforward, there can be instances where you take money out of your IRA right before you file and put it into your bank account (to pay bills, etc.) That money may not be protected under the Bankruptcy Code and could go straight to the Trustee. A Bankruptcy attorney in New York will be able to evaluate your situation and ensure that you know the amounts you’ll be able to keep.