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. 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. Individual courts in Sleepy Hollow, New York will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Sleepy Hollow, New York
There are 2 common forms of consumer bankruptcy in Sleepy Hollow, New York: Chapter 7 and 13. 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 all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is discharged. But some types 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 Sleepy Hollow, New York debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Sleepy Hollow, New York
Chapter 13 bankruptcy in Sleepy Hollow, 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 discharge debt, but restructures it instead. Usually, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is usually manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Sleepy Hollow, 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.
Regardless of your situation, you should speak with an attorney in Sleepy Hollow, New York who is experienced 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.