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 significant 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 creation of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in New York will be the same as everywhere else in the country. Distinct courts in Rensselear County, New York will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Rensselear County, New York
There are 2 typical forms of consumer bankruptcies in Rensselear County, New York: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is excused. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.
Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is excused. But some forms of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Rensselear County, New York debts are not dischargeable, you may want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Rensselear County, New York
Chapter 13 Bankruptcy in Rensselear County, New York is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each distinct case. 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 Rensselear County, New York
Chapter 13 is typically a good option for people who have a stable income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a stable income, Chapter 7 might be more beneficial.
In any case, you should talk with a local Rensselear County, New York bankruptcy lawyer. Your lawyer can advise you of your options and inform you of their likely result. This will make it much easier for your to make an informed choice.