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Common Questions About Filing for Bankruptcy

Everyone seems to know about the concept of personal bankruptcy, but many are fuzzy on the specifics. That means you’re likely to learn quite a bit from a bankruptcy lawyer if you ever need to seek this type of protection from creditors. During the initial consultation, you’re likely to have quite a few questions. These four will probably be on the list.

Do I Have to be Unemployed to Receive Bankruptcy Protection?

There’s a myth that people who file for any form of personal bankruptcy must be unemployed and have no source of income. The fact is that the majority of people who seek bankruptcy do have jobs and work full time. Their issue is not about having zero income; it’s about having debts that they cannot cover based on their current income levels.



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What’s the Difference Between a Chapter 7 and a Chapter 13 Bankruptcy?

When you consult with one of our experienced bankruptcy lawyers in Brooklyn, expect some discussion about chapter of bankruptcy available to consumers. While you might not be eligible for one type, it’s possible that you would quality for the another option. Most consumers seek to file a Chapter 7 or a Chapter 13 bankruptcy.

With a Chapter 7 bankruptcy, all eligible debts may be fully discharged. Depending on your circumstances, it may be necessary to hand over what’s known as non-exempt assets to the bankruptcy trustee. Those assets are liquidated and the funds are distributed among your creditors. Any remaining debt is wiped out by the court. Many of our client's are able to keep all of their assets, including a vehicle and money in the bank, and are still able to discharge their debts without any repayment to the creditors.

A Chapter 13 bankruptcy is more like a debt reorganization. Over a period of three to five years, you remit payments to the court rather than dealing with your creditors. The court then sends out payments to those creditors. By the end of the bankruptcy term, some or most of your debt is paid. If there are any remaining balances on those obligations, the court discharges them.

How does my lawyer know which type of Bankruptcy is right for me?

Your bankruptcy lawyer will conduct a full evaluation of your circumstances and administer what’s known as a means test. The information gathered through this process will indicate which form of personal bankruptcy is appropriate.

The means test takes into account your current income level and household size. The type of debts that you are seeking to discharge can make a difference, since some obligations cannot be discharged in a Chapter 7 bankruptcy action.

Furthermore, each chapter of bankruptcy has it's own potential benefits. For example, a chapter 13 bankruptcy might allow a debtor to "strip" a second mortgage from real estate where there is insufficient equity to cover the second mortgage. Lien stripping of this nature is not available within a chapter 7 bankruptcy.

Why Do I Have To Take Classes In Personal Finance?

In order to comply with the court’s qualifications, any resident seeking chapter 7 bankruptcy protection must complete court-ordered courses in personal finance, including credit counseling and debtor's education. You don’t get to choose any course that you desire; you must select from a listing of courses approved by the court. In many instances, you can take the classes online or by phone.

The reason these classes are required is to equip financially distressed debtors with sound financial tools for use in the future. By doing so, the court is seeking to help you avoid some or all of the issues that led to your current financial situation.

Bankruptcy Lawyers in Brooklyn, NY

If you’re deeply in debt and see no way out, it’s time to find out what our bankruptcy lawyers in Brooklyn can do to help you. We can help answer many questions about bankruptcy Call for a phone consultation and learn whether you potentially qualify for bankruptcy relief in a matter of minutes. If you do, we'll invite you for an in-person meeting with the attorney. Remember to bring any documents related to your debt, income, and assets. Doing so will make it easier to determine if bankruptcy is the right option for you. Call today to learn how we can help.

Call the Law Office of Simon Goldenberg, PLLC at (888) 301-0584 for a free phone evaluation.