Bankruptcy in Ballston Spa, New York is a court proceeding through which a person or business who is unable to pay their debt is able to have some of their debt legally absolved, or "discharged." This theoretically allows the debtor to move on with a clean slate. However, bankruptcy should not be treated as a way to avoid debt that one simply doesn't feel like paying. It is meant to be a safety net for people or businesses who are truly unable to pay off their debts. Because bankruptcy is not without negative consequences (such as a severely damaged credit rating for many years afterward), it should be viewed as an option of last resort.

Accordingly, you should speak with a good Ballston Spa, New York bankruptcy lawyer. Your Ballston Spa bankruptcy lawyer can inform you of the costs and benefits of filing for bankruptcy, and give his or her professional opinion as to whether or not it's a good option, given your particular circumstances.

Types of Bankruptcy in Ballston Spa, New York

In Ballston Spa, New York, 3 types of bankruptcy procedures are in common use: Chapter 7, Chapter 11, and Chapter 13. Being governed by federal law, the procedures involved in filing for bankruptcy in Ballston Spa, New York will be about the same as anywhere else in America. Chapter 7 bankruptcy involves liquidation of many of the debtor's assets in order to pay off as much of the debt as possible. This sounds harsh, but there is an upside: once the liquidation is complete, the debts are legally viewed as having been paid in full, whether or not the full amount was covered by the liquidation. Liquidation involves selling some personal property, and using the proceeds to pay off debt. Many types of property are exempt from liqudiation, and therefore may not need to be sold. They include homes, cars, and insurance policies, among others. You should know that some types of debt cannot be discharged in Chapter 7 bankruptcy, including taxes, student loans, and child support.

Under Chapter 13 bankruptcy in Ballston Spa, most of the debtor's debt is not discharged. Instead, the bankruptcy court, working with the debtor and participating creditors, work out a payment plan that allows the debtor to pay off most of his or her debts over a longer period of time, thereby theoretically making the debt far more manageable. Once a payment plan is approved by the court, creditors are prohibited from attempting to collect payment under their original agreements that gave rise to the debt in the first place. Though available to individuals, Chapter 11 bankruptcy is mostly used by businesses. Like Chapter 13, Chapter 11 requires the restructuring of debts. Under this system, the debtor must come up with a plan to reduce debt, cut costs, and improve operations. Once this plan is proposed, it is submitted to the participating creditors, who must approve it by a majority vote before it can be implemented.

During the Chapter 11 process, a business can usually continue its operations, and the stock can be traded, even if it is de-listed from a major stock exchange.

How Can a Ballston Spa Bankruptcy Lawyer Help?

The need to weigh all the options and consider the costs and benefits of filing for bankruptcy in Ballston Spa cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Ballston Spa bankruptcy attorney beforehand.