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 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. Individual courts in Rocky Point, New York will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Rocky Point, New York
There are 2 main forms of consumer bankruptcies in Rocky Point, 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 discharged. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, essential 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 discharged. 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 Rocky Point, New York debts are not dischargeable, you may want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Rocky Point, New York
Chapter 13 bankruptcy in Rocky Point, 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 does not eliminate any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Rocky Point, New York
Chapter 13 is usually 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.
Regardless of your situation, you should speak with an attorney in Rocky Point, New York who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely consequences of each one, allowing you to make a much more informed decision.