General Bankruptcy Questions
Yes, every creditor must be listed on your petition. If you have any obligation to another individual or business it must be included.
In a Chapter 7 case, you typically have one court hearing called “a meeting of creditors.” It is also referred to as a “341 hearing,” named after the section of the Bankruptcy Code that calls for this hearing. In a Chapter 13 case, you typically have two hearings. The first is a meeting of creditors and the second is a confirmation hearing. This second hearing is where the repayment plan is presented to the bankruptcy judge for approval. We appear with you at all hearings. During the pandemic all hearings are being held remotely, either by phone or video.
Yes. Filing a bankruptcy petition triggers a federal protection from creditors called the automatic stay, preventing creditors from all collections efforts, including garnishments that have already started.
No. It is possible for one spouse to file a bankruptcy petition without the other spouse filing. However, you are still treated as a household on the petition so all household income and expenses are included. If only one spouse files, the non-filing spouse still remains obligated on any joint debts.
Yes. Since we are looking at total household income and expenses, we will ask for pay stubs and potentially bank statements from the non-filing spouse. We may ask for additional information to verify ownership of assets or confirm that the spouse who is filing does not own an asset. Generally speaking, assets solely owned by the non-filing spouse are not included in a bankruptcy petition.
If you are looking to retain your house or vehicle, you should continue to make your ongoing monthly payments. A bankruptcy will stop all collections activities, but if you are not making these payments these creditors can wait until after a bankruptcy ends to foreclose or repossess. In addition, if you are not making payments, a creditor can ask permission from the bankruptcy court to lift the bankruptcy protections and foreclose or repossess while your bankruptcy case is still ongoing.
It is possible to file more than one bankruptcy in your lifetime. If you are seeking a bankruptcy discharge, there are limitations. The table below outlines the required waiting period. This does not mean you cannot file so we can guide on whether filing is a good option for you.
Absolutely! The bankruptcy courts in the Eastern District (Long Island, Queens, Brooklyn, and Staten Island) and the Southern District (Manhattan north to Poughkeepsie) offer programs to bring borrowers and lenders together with the goal of reaching a favorable outcome, typically in the form of a loan modification. If you already received a trial modification before filing for bankruptcy, you can ask permission of the bankruptcy court to approve the modification.
This is a difficult question to respond to without reviewing all of the documents that transfer ownership. Often these assets are not protected and would be subject to the reach of a bankruptcy trustee. It is important to present all documentation to your bankruptcy attorney to review so he can determine what may not be protected, and you understand the potential risks of filing.
If you’re contemplating filing for bankruptcy, chances are you do not have a stellar credit score. High debt and missed payments have already lowered your score significantly. While a bankruptcy will remain on your credit report for years, all of the negative reporting will stop when you file for bankruptcy, and when you get your discharge you will not be carrying all that debt anymore. Within a year you should see a dramatic increase in your credit score. An experienced attorney can also guide you on how to quickly rebuild your credit.
In a Chapter 13 bankruptcy there is a concept called the co-debtor stay, which protects an individual who co-signed on a consumer debt just as a debtor in bankruptcy is protected from collections. The two keys here are that individuals who co-signed are protected, not businesses, and that the debt must be consumer debt. Tax debt is not treated as consumer debt, so if a couple files joint tax returns and owes taxes, the IRS or New York State Department of Taxation and Finance can pursue the other spouse. The co-debtor stay does not apply in Chapter 7 cases.
No. You can file for bankruptcy relieve to eliminate $8,000, $80,000, or even $800,000 or more of debt. The minimum to consider filing is partly based on your comfort level. If you can afford to pay off the debt, you would not be considering bankruptcy. You will want to make sure that after paying any attorney fees and filing fees, you still receive a great enough benefit to filing.
When the Bankruptcy Code was amended in 2005, a requirement was added that filer must complete two courses. The first course is a credit counseling course and must be completed prior to filing a bankruptcy petition. The second course is a debtor education (also referred to as financial management) course that must be completed after filing but prior to receiving a discharge. Fortunately, both classes can be completed online or over the phone so you can take them on the couch with a bowl of popcorn.
Chapter 7
Chapter 13
