A Goshen NY bankruptcy lawyer knows that for many people in Goshen, it is a difficult decision to file for bankruptcy. There are a number of considerations and repercussions on both sides, but for residents of Goshen who are facing excessive and overdue debt, bankruptcy can be a path to financial freedom. Therefore, bankruptcy shouldn’t be seen as a failure, but an opportunity to start over with better habits, new opportunities, and stronger personal finances.

If you’ve already made the decision that bankruptcy is an effective option to your financial circumstances, you might think the situation is settled. However, bankruptcy isn’t a single decision, but a series of choices. Among them is whether you should file for Chapter 7 or Chapter 13 bankruptcy.

A Goshen NY bankruptcy lawyer is certainly in the best position to assist you with making this determination, but if you do file for Chapter 13 bankruptcy, here’s what you need to know.

#1: Chapter 13 Requires Reorganization, Not Liquidation

When you file for Chapter 7 bankruptcy, all your assets, except those exempt under NY law, are placed in a bankruptcy trust. A trustee, who is assigned by the bankruptcy court, manages this trust until the Chapter 7 bankruptcy is discharged. Your Goshen NY bankruptcy lawyer assists with setting up and overseeing the administration of the trust. This isn’t the process under Chapter 13 bankruptcy.

Chapter 13 bankruptcy is based on reorganizing your debt to make payments more manageable. With assistance from your Goshen NY bankruptcy lawyer and court approval, a three or a five-year payment plan is created. You must adhere to this plan and make appropriate payments throughout a Chapter 13 bankruptcy. If you do follow the payment plan, your remaining debt is wiped clean at the end.

#2: There are Filing and Other Fees for Chapter 13 Bankruptcy

Federal bankruptcy courts required the payment of certain filing fees from everyone and anyone that wants to file for Chapter 13 bankruptcy. Currently, the fee to file your bankruptcy petition is $235, but this doesn’t include administrative fees, usually $75, or other miscellaneous costs.

As well, you may need a Goshen NY lawyer to assist with your Chapter 13 bankruptcy. Hiring a lawyer can help you protect certain property and arrange for the most favorable repayment plan, but a Goshen NY bankruptcy lawyer will help protect your rights during the bankruptcy process. You can schedule a free initial consultation and evaluation with Simon Haysom, LLC to learn more about the cost of Chapter 13 bankruptcy, and how we strive to keep fees reasonable.

#3: There Are Eligibility Requirements for Chapter 13 Bankruptcy

The Chapter 13 bankruptcy process isn’t open to limited liability companies, sole proprietorships, or corporations. It is also inaccessible to stockbrokers, financial planners, and other professionals. All of these entities must file under Chapter 11 of the federal Bankruptcy Act.

Only individuals can file for Chapter 13 bankruptcy, and this is just the first of many eligibility requirements. A Goshen NY bankruptcy lawyer can help assess whether you meet the other qualifications, including that your unsecured debt is less than $394,725, your secured debt is less than $1,184,200, and you are current on your tax filings.

#4: Chapter 13 Bankruptcy Requires A Lot of Documentation

In conjunction with your bankruptcy petition, the federal bankruptcy court will request a number of documents or pieces of information. You must provide all of these documents in order to proceed with Chapter 13 bankruptcy.

The relevant documents are: (1) a list of all your creditors, the amount you owe, and the nature of their claim; (2) the amount and source of your income; (3) a list of all your assets and property; and (4) a list of all your monthly living expenses, including what you spend on food, shelter, utilities, taxes, transportation, insurance, and otherwise.

#5: There is an Automatic Stay Under Chapter 13 Bankruptcy

When you file for Chapter 13 bankruptcy, your Goshen NY bankruptcy lawyer will confirm that an automatic stay is in place. An automatic stay is a halt on all payments, collections, debts, and outstanding bills. All payments, debts, and claims that fall within the automatic stay can’t be demanded or requested by a creditor. Effectively, the phone calls, emails, and letters from creditors must cease, providing you some relief from overdue bills.

However, the automatic stay under Chapter 13 bankruptcy isn’t as robust as under Chapter 7. There are certain claims that can continue – albeit, they are few. As well, the automatic stay only applies to some claims for a finite period of time under Chapter 13 bankruptcy.

Want to Know More About Chapter 13 Bankruptcy?

Our team at Simon Haysom, LLC is ready to help you file for Chapter 13 bankruptcy, but first, we want to be certain you know exactly what that entails. Our office provides a free initial consultation to all new clients, as a way to explain the process of bankruptcy and confirm that it is the right path for you.

To learn more, call us at 845-294-3596.