Bankruptcy is a court proceeding which lets a person or business have some or all of their debts discharged. It should usually only be considered as an option of last resort, because it can have serious long-term consequences, even if it can stave off financial disaster. This means that the costs and benefits need to be carefully considered before filing. Being a product of federal law, bankruptcy will go through federal courts. Accordingly, the procedure for filing for bankruptcy in New York is basically the same as the procedure anywhere else in the United States. However, individual courts in Cortland, New York will have individual rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Cortland, New York
There are 2 common types of bankruptcy in Cortland, New York. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This usually includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Cortland, New York is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Cortland, New York
Chapter 13 bankruptcy in Cortland, New York is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your particular case. Chapter 13 Bankruptcy involves a court setting up a modified payment plan, which allows the debtor to pay off most or all of his debts over a longer period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Cortland, New York
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your individual situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
Whatever your situation, you should speak with a local Cortland, New York bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely consequences, which will help you make a more educated decision.