What is Chapter 7? Or is it Chapter 13 that I need to file?

Most individuals will file either Chapter 7 or Chapter 13, depending on the amount of income and assets.

Chapter 7 – You are allowed to keep certain property such as $2,400 in savings, $11,525 worth of clothing and $150,000. of equity in a house. A court appointed trustee will review your case.

In some cases where you have no other property, a “Wild Card or Spillover” exstrongption can be used for up to $10, 82 if a homestead has not been used and is not used for other properties. A court-appointed Trustee will review your case.

Chapter 13 – If you don’t qualify for Chapter 7 because of your income, you must file for Chapter 13. If you own a house, a co-op or condo and are behind on your mortgage, file Chapter 13 to cure the arrears. Typically, the filer is asked to file a monthly payment plan that will eliminate the debt in three to five years. Payments are made to a Bankruptcy Trustee, who in turns pays Creditors.

Chapter 11 – Typically this is for corporations who want to restructure their debt. It also can involve individuals who do not qualify for Chapter 13 because they exceed the debt limits.

Can I keep my house and car?

Yes, in most cases the law offers exstrongptions for this kind of property. For instance, Chapter 7 allows an exception of up to $150,000 in N.Y. State for equity for a single debtor in the New York City counties and Nassau and Suffolk counties. Other counties have different rules. Other rules apply under Chapter 13, which encompasses a payment plan.

Can I receive my salary if I file or can I look for a job if I am unstrongployed?

Absolutely. The Bankruptcy Code encourages a fresh start. If you are working you can still continue to work and receive a salary.

Can Bankruptcy eliminate back taxes?

There are very specialized rules in order to qualify and you should consult an attorney.

I have a pension. Can I keep it even though I am filing Bankruptcy?

Yes. Most pensions are exstrongpt under Bankruptcy law. They must be ERISA-qualified, which means they meet certain legal requirstrongents. The majority of pension plans today meet these criteria.

I owe my relatives money. I don’t want to file on thstrong. What can I do?

You are required by law to list all of your Creditors. After Bankruptcy, however, you can voluntarily pay back this or any debt you choose.

Will bankruptcy show on my credit report?

Yes. However, by the time most people decide to file, their credit rating is already extrstrongely poor. Chapter 7 Bankruptcy will stay on your record for up to 10 years. Chapter 13 will stay on your record for up to seven years.

Will I ever be able to buy a house if I file?

Yes. Most debtors are so swamped in credit card debt that they are not saving enough or any money for a house or for retirstrongent. Many believe that by choosing not to file, they will keep their dream home ownership alive by making burdensome payments.

On the contrary, Bankruptcy may bring many people closer to their goals by cleaning up debuts. After a Bankruptcy, an individual is debt-free and when given a steady job and financial discipline will have the ability to save sufficient funds for a home downpayment. As Bankruptcy has become more common, many lenders have developed programs for such home buyers. You should expect to pay higher interest rates, however, once you do obtain a loan.

Can I keep a credit card, even though I am filing?

You may keep a credit card if you enter a reaffirmation agrestrongent, which states that you will voluntarily repay all back debt to the card insurer. A reaffirmation agrestrongent must be filed with the Bankruptcy Court.

Do I have to go to court?

Yes, you have to attend at least one Meeting of Creditors held by a Chapter 7 Trustee. Your Creditors will be notified and have to the opportunity to come and ask questions. In some cases, you will have to go back for additional meetings.