Bankruptcy Advice From an Experienced Long Island Bankruptcy Attorney
Bankruptcy Advice Are you drowning in debt? Are creditors harassing you day and night? Bankruptcy is a viable option to start over with a clean slate or repay your obligations under a reorganization plan. It may seem like credit death to ask the court for help, but it’s one of the best choices if you need help stopping wage garnishments, foreclosures, and repossessions. Here are some of the most asked questions we receive, but if you have any further inquiries that you cannot find here, please don’t hesitate to call us directly for assistance. We understand how significant this decision is to you and your family.
How Bad Is Declaring Bankruptcy?
Declaring bankruptcy is a decision that you shouldn’t take lightly. This public record will remain in your credit report for up to ten years. However, most folks that need this type of court assistance already have credit problems that have impacted their score, so it’s one of the best options to get debt relief. There comes tremendous stress with being in debt and not having enough money to make ends meet. Many can’t get a reorganization loan from a bank, so it’s one of the few options left. Sadly, you can run yourself right back into the same situation if you’re not careful, so you must attend credit counseling and incorporate better financial practices in the future. However, you shouldn’t beat yourself up over filing bankruptcy as Debt.org reported that 774,940 people filed in 2019 alone.
When Is Declaring Bankruptcy the Best Option?
If you don’t have enough money to pay your bills each month, then you should consider bankruptcy. You should be behind on your debts by a couple of months to show that there is a genuine need. Many people use credit cards to live on and have huge balances. If you feel that you cannot sustain your life anymore without the court’s intervention, then it’s a good choice. However, it should be the last option and not the first choice for debt relief.
Is There a Limit or Minimum Amount of Debt You Need to Declare Bankruptcy?
The US Bankruptcy court doesn’t have any minimum debt for filing a chapter 7 or 13 case. However, when it comes to chapter 13, the maximum amount that you can have is $1,184,200 in secured debt or $394,725 in unsecured.
What Are Some Things That Most Won’t Tell You About Declaring Bankruptcy?
There are many things that people don’t know about asking the court for help in erasing or reorganizing their debts. Here are just a few of the most overlooked facts:
•It Takes Two Years or More to Rebuild
The first two years after you file for bankruptcy will be the toughest. It will be hard to get housing, loans, or to gain employment with credit checks. After you get past the two-year mark, you will start to have more options open to you, primarily if you’ve utilized ways to rebuild your credit. One thing that many are shocked about is that they get offers for credit before they even receive a discharge.
•You Will Get Credit Offers Before A Discharge
It’s the only option for many to get a car that they desperately need. However, you will sometimes pay ten times the interest rate of someone with good credit. That means a vehicle that’s worth $20,000 could cost you $40,000 to pay off. Many creditors prey on people who are down on their luck, and they know that you cannot file bankruptcy on them. So, if you default on a new credit card after your discharge, you cannot file bankruptcy again till eight years have passed.
•Businesses Have Two Options for Relief
Chapter 11 is not talked about much as the other chapters, as it’s reserved for those businesses that are trying to stay afloat. Businesses do have the option of filing a chapter 7 or complete liquidation, but all assets will be confiscated and sold to repay the debts. A business can file a chapter 11 and be unsuccessful and turn it into a chapter 7.
•Married Couples Don’t Have to File Together
A married couple doesn’t have to file together. If the debts are only in one or the other’s name, then that person can choose to file alone. However, any joint obligation will require both parties, or the other person will be solely responsible for the debts.
•You Only Need to Attend Court Once
There is only one time you’re required to go to court, and that’s for the 341 Meeting of Creditors. Other situations may arise that warrant a court visit, but usually, just one stop is all it takes.
•You Don’t Need an Attorney to File
You have the option of filing your case with the court under Pro Se, which means that you represent yourself. However, the forms are exceedingly difficult, and one form forgotten or filled out incorrectly could have serious consequences, including your case thrown out. When filing a chapter 13, the attorney fees can be included in the repayment plan; however, you will pay the entire price of the chapter 7 up front. Using pro se and representing yourself seems like a good choice when you’re financial drowning, but it’s not a viable option for the majority.
What Are the Consequences of Declaring Bankruptcy?
There are many consequences when you ask the court for help with your bills; one of them is the mark that it puts on your credit. You may do many things to rebuilt and establish yourself, and your credit score can be in the 600-700 range within a few years. Even with a higher credit score, the mark from public records won’t go away anytime soon. You must wait your time until it falls off your credit report. If you need advice on the proper ways to rebuild your credit, then it’s best to talk to a professional. If you mess up again after filing a chapter 7, then you will need to file a chapter 13 if the appropriate time hasn’t passed.
Making the Choice for Financial Freedom
It’s best to get legal help when considering making such a life-altering choice. An attorney’s advice can be quite valuable, and you will need someone to stand beside you in court when you attend the 341 Meeting of Creditors. We can help you do the Mean’s Test to see which chapter is right for you and your situation. Call us today for further assistance.