Long Island Bankruptcy Lawyers
Frequently Asked Bankruptcy Questions
1. What is the main difference between Chapter 7, Chapter 13, and Chapter 11 bankruptcy?
Chapter 7 bankruptcy completely erases all of an individual’s dischargeable debt. After filing for Chapter 7 bankruptcy, you will no longer be responsible for repaying your creditors for your debt, as that debt will have been discharged by the courts.
Chapter 13 bankruptcy consolidates all of an individual’s debt and restructures it into a monthly payment plan. Unlike Chapter 7, Chapter 13 does not eliminate debt. You are still responsible for repaying all of your debt. The difference is that now your debt has been reorganized in a way that makes it possible for you to repay your creditors while still being able to take care of your other expenses.
Chapter 11 bankruptcy is available for businesses that have fallen on hard financial or economic times. Chapter 11 bankruptcy permits a business to reorganize its finances while it continues to operate. Chapter 11 bankruptcy can be very advantageous to businesses as it affords them protection from creditors while they get handle on their finances.
2. What types of debts are dischargeable through Chapter 7 bankruptcy?
Only certain types of debts can be discharged or eliminated through Chapter 7 bankruptcy. These types of debts, commonly referred to as either “unsecured debts” or “dischargeable debts,” include debt from:
- Medical bills
- Credit cards
- Repossessions
- Consumer debt
- Unpaid rent or utilities
- Certain types of loans
- Judgments
- Collections
The types of debt that cannot be discharged through Chapter 7 bankruptcy include student loans, child support, alimony or spousal support, court fines or penalty fees, restitution or damages to personal injury victims, tax debt, and debt to the government.
3. How long will bankruptcy appear on my credit report after it has been discharged?
A bankruptcy will appear on your credit report for 10 years. However, just because you have a bankruptcy discharge on your credit report does not mean that you can’t obtain credit or purchase a large item like a home or car.
4. Can I obtain new credit after filing for bankruptcy?
Absolutely! In fact, it will probably be easier for you to obtain credit after you have filed for bankruptcy. Think about it. As of right now you have a number of debts listed on your credit report. But after you file for bankruptcy, almost all of your debts will be completely eliminated from your credit report. In the eyes of the credit company, you have a clean slate with no outstanding debts. This makes you a much more desirable candidate for new credit.
5. Will I lose all of my assets and property?
You most likely will not lose your home, car, or other assets and property during the bankruptcy process. Bankruptcy was established to help people who have fallen behind financially or who are struggling with insurmountable debt. In the vast majority of the bankruptcy cases we’ve handled, our clients were able to keep their homes, cars, and other assets. However, if the bankruptcy court sees that you are living well-beyond your means, and as a result of that have fallen into debt, they may be more likely to seize some of your assets. Again, this is possible, but not likely to happen.
6. Why should I hire an attorney? Can’t I file for bankruptcy on my own?
It is to your great advantage to hire a bankruptcy attorney to help you through the legal process. Bankruptcy can be incredibly complex. By working with an experienced bankruptcy lawyer, you can ensure that you’re taking the rights steps, and that all of your questions and concerns will be answered by a skilled and knowledgeable bankruptcy professional. Furthermore, your attorney can represent you at the hearing before the bankruptcy trustee, or before a judge if your case progresses that far. You bankruptcy lawyer can also help end any creditor abuse or harassment that is being committed against you. But above all, a bankruptcy attorney at the Law Offices of Scupp & Berman will be there to look at for your best interest, and help you get your finances back on track.
Contact Scupp & Berman – Long Island, NY Bankruptcy Attorneys
For more information about bankruptcy, please visit the Bankruptcy Myths section of our website, or contact our Long Island bankruptcy attorneys at (516) 683-1990.