Bankruptcy in Saratoga County, New York is a court procedure through which a person or business who is unable to pay their debt is able to have some of their debt legally excused, or "discharged." This theoretically allows the debtor to move on with a clean slate. Bankruptcy should be treated as an option of last resort, and should not be viewed as a fitting way to get out of debt that you just don't feel like paying. Bankruptcy can have severe consequences, including but not limited to damage to your credit rating. A bad credit score can impact your ability to get loans in the future, to rent an apartment, and possibly even your ability to get hired at some jobs (as some employers now run credit checks on prospective employees).
Therefore, it is advisable to consult with an experienced Saratoga County, New York bankruptcy attorney, who can advise you of the costs and benefits of bankruptcy. Because the decision to file for bankruptcy depends very heavily on the facts of each individual case, the advice of a Saratoga County bankruptcy attorney cannot be replaced.
Types of Bankruptcy in Saratoga County, New York
In Saratoga County, New York, there are 3 types of bankruptcy in common use: Chapter 7, Chapter 13, and Chapter 11. Because bankruptcy is a result of federal law, the procedures governing bankruptcy in Saratoga County, New York will be similar everywhere else in the U.S. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her property, and use the funds to pay creditors. While this doesn't sound like much of a relief at first glance, the upshot is that once the appropriate property is sold, and the proceeds directed to the creditors, all of the debtor's eligible debts are deemed paid in full, regardless of how much the creditors actually ended up getting. Not all of the debtor's property has to be sold off - the debtor will typically be allowed to keep things like a house, at least one car, some types of personal property, retirement accounts, and insurance policies. It should be noted that some debts are not dischargeable, and will have to be paid in full even if the debtor files for bankruptcy. This includes student loans, taxes, and criminal fines.
The other typical bankruptcy scheme used by consumers in Saratoga County is Chapter 13 bankruptcy. In this system, debt is not discharged. Instead, it is restructured. This allows the debtor to have the terms of the arrangements that gave rise to their debts in the first place thrown out, and replaced with new terms that call for a structured repayment plan, designed to allow the debtor to survive on whatever income they have, and allowing the creditors to get paid back eventually. Once a payment plan is authorized, creditors are not allowed to attempt to collect payment under the original agreements. Chapter 11 bankruptcy is generally used by businesses, though it can be used by individuals (which is quite rare). Chapter 11 bankruptcy requires that the debtor come up with a reorganization plan - typically telling the court how they propose to cut costs, streamline their operations, and pay their debts. This plan must be authorized by the participating creditors through a simple majority vote.
One major advantage of Chapter 11 bankruptcy is that it allows businesses to continue their operations while the process plays out. Moreover, their stock can still be bought and sold.
How Can a Saratoga County Bankruptcy Lawyer Help?
The need to examine all the options and consider the costs and benefits of applying for bankruptcy in Saratoga County cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Saratoga County bankruptcy attorney beforehand.