Bankruptcy is a court proceeding which lets a person or business have some or all of their debts excused. It should typically 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. Since it's a product of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in New York will be the same as anywhere else in the country. Distinct courts in Medford, New York will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Medford, New York
There are 2 typical types of consumer bankruptcies in Medford, New York: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves liquidation of some of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This typically includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once the non-exempt property is sold, the rest of the dischargeable debt is absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Medford, New York is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Medford, New York
In Medford, New York, Chapter 13 is substantially different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your specific situation. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the arrangements that gave rise to the debt in the first place. This results in an adjusted payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
Which Type of Consumer Bankruptcy Should I File in Medford, New York
This depends entirely on the facts of your specific case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
In any case, it would be a good idea to consult a local bankruptcy Attorney in Medford, New York. Your Attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).