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Chapter 13

Consumer bankruptcy trends explored in recent report

2019 and 2020 wooden blocks

Last September, the Consumer Financial Protection Bureau released the latest quarterly consumer credit trends report. This document, whose primary purpose is to track how the frequency and types of bankruptcy filings have varied since 2001, also examines issues like: BAPCA effect on the frequency of Chapter 7 filings Discharge rates for Chapter 7 bankruptcies vs.…

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Repossession vs. charge-off in bankruptcy

car and figure

When you take out a mortgage or car loan, you agree to repay the amount over time. If financial challenges become so steep that you end up having to file for Chapter 7 bankruptcy, the lender will usually do one of two things: take back the asset or charge off the debt. How is repossession…

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Exemptions in Chapter 7 vs. Chapter 13 bankruptcy


One of the biggest misconceptions about filing for bankruptcy is that you’re going to “lose everything.” A lot of people don’t learn the truth until they’re desperate enough to consult a bankruptcy attorney and learn that in New York, they can use state or federal exemptions to protect property up to a certain value. How…

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Adversary proceedings in bankruptcy


You file for bankruptcy to put your mountain of unsecured debt behind you, but it doesn’t always proceed smoothly. Although it’s not a routine happening, a dispute can arise regarding a debt that you included on the petition. Should this happen, you, your trustee, the creditor, or another party involved in the case can file…

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Student loan debts in bankruptcy

woman with graduation cap and money bills

Last month, Business Insider ran a story indicating that student loan debt was driving a high number of bankruptcies. Citing a recent LendEDU study, it found that 32% of all consumers who file for Chapter 7 bankruptcy have a significant amount of student loan debt- on average, 49% of their liability was related to the…

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What is a loan cramdown?

3 green arros pointing in

Sometimes you can find yourself so deep in debt that you owe more on your household goods, car, and other real property than they are worth. If this happens and you don’t want to risk surrendering these assets in a Chapter 7 bankruptcy, a then Chapter 13 may allow you to “cram down” these debts,…

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Filing for bankruptcy while unemployed

unemployed concept, people sitting in line

Research suggests that next to high medical bills, job loss is the most common reason why Americans file for bankruptcy. If they are unable to find work before their emergency funds and COBRA insurance coverage runs out, then they face relentless payment demands from their mortgage issuer, auto loan provider, credit card issuer, and other…

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Bad faith in involuntary bankruptcy

United States Bankruptcy Court sign on wall

You’ve heard about how bad faith on the part of a debtor can impact their bankruptcy filing. When they are motivated by anything other than unmanageable debt and the desire to start over, the court can dismiss their case. However, there are also cases where creditors can act in bad faith, particularly when they force…

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Voluntary vs. involuntary bankruptcy- what’s the difference?

money in bankruptcy

When you think of bankruptcy, you probably imagine an indebted person or business owner visiting a bankruptcy attorney’s office and filing a chapter that is best suited to their circumstances. While this is the most common way to file, it’s not the only one. There are actually two types of bankruptcy in New York: voluntary…

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How are inheritances treated in bankruptcy?

last will and testament for an inheritance

You filed for bankruptcy in New York, and now you’ve heard that an aunt has made you one of the beneficiaries of her sizable estate. You haven’t received your discharge yet, so how much of that money will you be allowed to keep? It’s a question anyone would ask when they receive an inheritance in…

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What is a “no-asset” Chapter 7 bankruptcy?


The month of January can be a difficult time for financially for anyone. They may have acquired even more debt due to holiday spending and are reaching the point where they have to choose between paying the rent and paying their credit card bill. People stuck in this situation may benefit from Chapter 7 bankruptcy.…

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How does bankruptcy stop an eviction?

eviction on door

If you are struggling financially, then you may fall behind in your rent payments. With New York rents being so high, it is not unusual for a distressed consumer to go into arrears simply to put food on the table. This means that you will eventually receive a notice of eviction from your landlord.  For many filers,…

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Why filing your own bankruptcy is risky business

man financial documents

At one time it was relatively common for people to file for bankruptcy without an attorney. They would get copies of the required forms, fill them out by hand, and file their own bankruptcy petitions at the clerk’s office. Afterward, they would appear on their own at the meeting of creditors and, if they were…

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Filing for bankruptcy a second time? Here’s what you can expect

credit card scissors

Chapter 7 bankruptcy has helped thousands of New York consumers eliminate crushing levels of debt and reclaim their lives. While most of them realize greater financial solvency after discharge, some people eventually experience debt overload yet again, forcing them to consider filing for bankruptcy protection a second time. Federal law places no restrictions on how…

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Why debt settlement companies are not the answer

man cuts debt word

How many times have you turned on your TV or radio and heard an ad proclaiming how a particular debt settlement company can negotiate with your lenders to lower your interest rate and reduce your monthly payments. Does it sound too good to be true? Chances are that it is. How debt settlement companies work…

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How are windfalls treated in a New York bankruptcy?

money in a bankruptcy case

It almost sounds like a plot from a movie. You file for bankruptcy to deal with your financial struggles. Then, seemingly from nowhere, you become rich. You’ve won the biggest jackpot in history or a wealthy relative who didn’t seem inclined to help you financially in life dies and leaves you a fortune. This sudden…

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How will Chapter 7 affect a New York LLC?

pie chart of assets

If you own a New York LLC, you are likely wondering how it will be affected by a Chapter 7 filing. If you are a single-member LLC, will you have to shut the business down? What about the other members if you are part of a multi-member LLC? Like corporations, LLCs are separate legal entities…

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Your New York Chapter 13 case has been dismissed. Should you refile?

thinking man, best option

When your creditors are closing in and you’re facing loss of your home, vehicle, and even a percentage of your wages, Chapter 13 bankruptcy allows you to get everything under control without losing assets in the process. Unlike Chapter 7, which may require you to surrender property in exchange for a total discharge of all…

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Chapter 7 bankruptcy and Christmas: what’s the solution?

christmas tree gifts

For many of us, the holidays are when budgets go out the window. In 2016, the average American shopper spent $935.58 on Christmas presents, and this year the total will probably go up, thanks to higher-priced gifts and advertisements that make it difficult to resist overspending. For some people, the intention is to spend as…

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Risks of filing for Chapter 7 bankruptcy without an attorney

Many people opt to file for Chapter 7 bankruptcy without assistance from an attorney. Sometimes it is because they feel their cases are simple and straightforward, while in other instances they feel that they can’t afford the attorney fees. While you certainly have the legal right to file for Chapter 7 on your own, help…

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What happens to your investments in a Chapter 13 bankruptcy?

If you are thinking of filing for Chapter 13, then you’re bound to have concerns about any investments you may have. Can creditors like the IRS touch them? Which ones are protected? It’s a complicated area that a New York bankruptcy attorney can clarify for you. 401(k) plans The Employee Retirement Income Security Act (ERISA)…

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Who are all these people? Parties involved in your bankruptcy

business people

When you file for bankruptcy in New York, multiple parties are involved in the process. You may never even see some of them, but their role remains an important part of your debt relief journey. Let’s take a closer look at who they are and what they do after you file. The bankruptcy judge Although…

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How the Real Estate Settlement Procedures Act can affect your bankruptcy

houses in bankruptcy

When New York homeowners file for bankruptcy in New York, they are typically aware of the protections extended to them by the automatic stay. The calls and letters from creditors and/or third-party debt collectors stop and all official collection actions, such as wage garnishments or lawsuits, are brought to a halt. A comparative few-and even…

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Common issues clients must overcome when filing bankruptcy

warning sign

If you’ve decided that bankruptcy is the best solution to an overwhelming debt problem, you don’t want mistakes and missteps to prevent you from getting the relief you need. Below are some of the activities and transactions that may result in your petition being refused, as some debtors employ them to minimize the negative effects…

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Bankruptcy and child support

money bill

Imagine this scenario. Your ex has been ordered to pay you child support after your New York divorce, and she does—approximately half the time. As the months pass, many payments are missed and the amount of back child support due to you increases. Then you find out that she has just filed for bankruptcy to…

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What is Chapter 20 Bankruptcy?

When you file for Chapter 13 immediately after receiving a Chapter 7 discharge, it is known as a Chapter 20 situation. Its intended purpose is to allow you to discharge your unsecured debts via a Chapter 7 and then catch up on nondischargeable debts such as taxes and your mortgage in a Chapter 13 repayment…

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How many times can you file for bankruptcy in New York?

bankruptcy petition chapter 7

If you’ve already filed for bankruptcy once in New York, can you file again? The short version of the answer is, “yes.” But how long you have to wait before you may do so depends on what chapter you originally filed, which one you intend to file this time, and whether or not your first…

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The bankruptcy means test: What it is and how it works

bankruptcy petition chapter 7

When you are struggling with more debt than you can handle, Chapter 7 bankruptcy can give you the fresh start you need. Unless they have significant assets that they stand to lose in this liquidation-type bankruptcy, most debtors prefer to file Chapter 7 because all unsecured and nonexempt debt is eliminated, there is no limit…

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Filing for Chapter 7 bankruptcy as a business

business bankruptcy chess concept

You started your small business with the best intentions, but thanks to a competitive marketplace, reduced consumer spending, and difficult economic climate, the once-promising venture is now drowning in debt. Could bankruptcy—specifically, Chapter 7—resolve your difficulties? It’s possible, but it also depends. What type of business is it? Chapter 7 bankruptcy will only eliminate dischargeable…

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Reasons the court might dismiss your bankruptcy case


When you file for bankruptcy in New York, your case will have one of two outcomes: discharge or dismissal. What happens in your instance will depend on whether or not you fulfill the requirements imposed upon you by the bankruptcy court. In a Chapter 7 bankruptcy, you are required to do the following: File accurate…

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Social security disability and bankruptcy

bankruptcy consideration

When disability benefit recipients investigate bankruptcy as a debt solution problem, they are naturally worried about how a filing will affect their income. How much of an impact bankruptcy has on your disability payments will depend on which chapter you file and how the payments are structured. Social Security Disability Insurance (SSDI): Bankruptcy laws generally…

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What debts cannot be discharged in a New York bankruptcy?

debt receipts

When you’re overwhelmed by debt and unable to pay it within a reasonable time from, bankruptcy may appear to be your only solution. In most instances, filing can give you the relief that you desperately need… depending on what debts you are struggling with. With Chapter 7, you may have to liquidate non-exempt assets to…

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Life after a New York bankruptcy

When people consider filing for bankruptcy in New York, one recurring question is, “Will I ever get credit again? Be able to buy a house? Get a car lease on favorable terms?” The universal assumption seems to be that after you file, you lose any chance of being able to benefit from the advantages that…

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Self-employed and filing for bankruptcy in New York

self employed

When you are an independent contractor or the sole proprietor of a New York business, you may take more financial risks to get your business off the ground and keep it going during times when clients are few and far between. Sometimes these risks pay off, while other times they may send you so deep…

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Meeting with a New York bankruptcy attorney: What to expect

When you’ve scheduled a consultation with an attorney to discuss a New York bankruptcy, it’s normal to wonder what to expect. Although every bankruptcy attorney has their own approach, there are questions and discussion topics that appear in the majority of first meetings.  There are also documents you should bring that will make the whole…

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Pensions and bankruptcy in New York

pension concept

Many people who are preparing to file for Chapter 7 or Chapter 13 bankruptcy protection in New York worry that they will lose their New York State pension and other retirement assets. The reality is that in practically all cases, you will be able to keep your retirement accounts. New York bankruptcy exemptions are quite…

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What if a relative dies in a New York bankruptcy?

bankruptcy court sign

When someone we love passes away, we grieve and celebrate their lives at a funeral or memorial session. Then we move on with our own futures. But if you are one of that person’s heirs and he or she died while in the midst of a Chapter 7 or 13 bankruptcy, then the estate distribution…

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Unpaid college tuition in a New York bankruptcy

tuition money

Although Chapter 7 bankruptcy discharges most unsecured debts, student loans are a significant exception. Anyone who has attempted to be relieved of this often-staggering financial burden will say that it’s next to impossible. Before 1976, education-related debts could all be discharged via bankruptcy. This, predictably, resulted in scores of students amassing debt for higher degrees…

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Effects of bankruptcy on co-signers in New York


If you are considering a New York bankruptcy and have guarantors or co-signers on any or all of your debts, then you may wonder how filing may affect them. Once you are officially bankrupt, doesn’t it mean that your creditors will now go after the people who guaranteed those debts? These are usually family members…

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Personal injury awards and bankruptcy: What does the law say

bill in bankruptcy

When you file for personal bankruptcy in New York, you have the ability to exempt certain assets: in other words, protect them from your creditors. Personal injury awards and settlements up to a certain amount fall within this category, but the amount covered depends on whether you opt for the New York state or federal…

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Bankruptcy and apartment rentals in NYC

If you rent an apartment in New York and intend to file for bankruptcy, you may wonder how the decision will affect your lease. The answer is: it depends. If you have a standard lease and have been paying your rent on time as of the date you file, there will be no negative repercussions.…

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Student loans and bankruptcy in New York

student loans - bankruptcy

Student loans have always been one of the most difficult, if not impossible, debts to discharge in a bankruptcy. A 2005 change to the U.S. Bankruptcy code even classified private student loans as “non-dischargeable,” placing them on a level with child support and tax liabilities. There is a remote chance that you can discharge your…

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How bankruptcy affects foreclosure in New York


In times of extreme financial difficulty, many people fall behind on their mortgage payments. In some instances, the mortgage company or lender will work with the homeowner by modifying the terms of the loan or facilitating a short sale, but other times they will start the foreclosure process, which entitles them to repossess the house…

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Mortgage issues and bankruptcy in New York

When homeowners experience financial difficulties, meeting their mortgage obligations may eventually become impossible. For many of them, bankruptcy is an opportunity to get a fresh start by discharging all non-exempt debts or organizing them into an affordable payment plan. Each type of bankruptcy treats mortgage debt differently, however, so it is important to evaluate all…

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Dealing with debt collectors

debt collection

When you are officially discharged from Chapter 7 or Chapter 13 bankruptcy in New York, you have every right to assume that you’ve gotten a fresh start financially. Therefore, it can come as a shock when a debt collector calls -again and again- about a debt that was included in your bankruptcy filing. With few…

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Credit card debt and bankruptcy in New York

The average credit card debt in New York state is approximately $6,390. For some, that can be managed. But if you are experiencing financial difficulties, it may be beyond your ability to cope with, especially if you have high-interest credit cards that make paying down the principal impossible. Credit card balances are unsecured debts, so…

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Chapter 13 bankruptcy explained

chapter 13 bankruptcy Plan

Chapter 13 has often been referred to as a wage earner’s bankruptcy plan, because those who file must earn a regular income and be able to prove to the court that they can repay some or all of their debts. Unlike Chapter 7, which can eliminate credit card bills, unpaid medical accounts, outstanding utility balances,…

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Chapter 7 bankruptcy explained

Chapter 7 is by far the most commonly filed form of bankruptcy in the United States. According to the Administrative Office of the U.S. Courts, there were 596,867 filings in 2015, compared to 306,729 people who filed Chapter 13. Often referred to as the “fresh start” bankruptcy, Chapter 7 discharges nonexempt debt such as: Credit…

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How can a serious diagnosis impact your financial situation?

There are many different implications for your life if you receive a serious medical diagnosis, particularly if this diagnosis is cancer. You may be feeling shock, confusion, grief, and an array of other emotions as you attempt to cope with this situation. Financially, even with solid health insurance, it can be overwhelming and confusing to…

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How to handle financial problems after a job loss

One of the leading reasons that individuals consider filing bankruptcy and moving forward with filing for bankruptcy is job loss, according to research published on Investopedia. Whether your job loss situation is due to your own decision to leave the position or the company’s decision, suddenly losing your income can be catastrophic. This is particularly…

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What to do when debt consolidation does not work for you

debt in bankruptcy person

You may have made the effort to go through debt consolidation or credit counselling in the hopes that it would repair your current financial situation. However, it can be even more frustrating when you emerge from debt consolidation without any significant progress forward. Many individuals considering filing for bankruptcy in New York are doing so…

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What are the disadvantages of Chapter 13 bankruptcy?

Although Chapter 13 might be the right move for some, it’s not always the best course of action. You can do plenty of your own research online about bankruptcy, but at the end of the day, it’s strongly recommended that you consult with a New York bankruptcy attorney so that you can be clear about…

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How can you use the automatic stay to stop creditors?


Once you file for bankruptcy in New York, a special provision known as the automatic stay kicks in to protect you from recurring bill collectors and creditors. This stops any lawsuits filed against you by collection agencies, government entities or creditors that are looking for money from you. It is a powerful tool that can…

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Can I choose what kind of bankruptcy to file?

If you do indeed meet the requirements of both Chapter 13 and Chapter 7 bankruptcy in New York, you can determine which one you want to file. In many situations, though, you might not have a choice. Speaking with your New York bankruptcy attorney can help you understand how the facts of your situation influence…

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How often can I file bankruptcy?

time concept

If you have filed bankruptcy in the past, but find yourself in another financial situation from which you do not believe you’ll be able to emerge on your own, then you may be contemplating going through bankruptcy again. It is important to know that you cannot go through bankruptcy too often, and the court will…

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What is the link between bankruptcy and divorce?

Divorce, which almost often involves disputes over money and debt, can lead to bankruptcy. The key is critical timing and knowing the main factors about how to prepare for the financial challenges associated with divorce. You may need to consult with a bankruptcy attorney in addition to a family lawyer when preparing for divorce. In…

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Bankruptcy types: pros and cons

When making the decision to file bankruptcy, it is strongly recommended that you consult with an attorney to determine the best course of action for you. There are two primary types of bankruptcy, and getting counsel on the most appropriate one to file can make a difficult process easier to understand. Chapter 7 is the…

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The New York Opera bankruptcy as compared to individual bankruptcy

In the State of New York, bankruptcy can be sudden or gradual. Those who have experienced a gradual transition to bankruptcy may identify with the recent case of the New York City Opera. Started in 1943 and referred to as the People Opera, for more than 70 years this New York landmark focused primarily on…

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Multiple credit card holders and bankruptcy

credit cards

A credit card account holder can have other card holders on his or her account. But what happens if one of the users decides to file for a Chapter 13 bankruptcy? Does this affect the other users, and their credit? The primary account holder is responsible for any debt incurred on the account, as reported…

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Bankruptcy Basics

Bronx bankruptcy lawyer concept

Chapter 7 & Chapter 13 Bankruptcy Filing for bankruptcy can help consumers regain financial control over their lives, helping them protect their family and vital assets such as a primary residence and automobiles. Bad things can happen to good people, and it is common for problems to arise in life that create financial stress from…

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Supreme Court will hear case on bankruptcy and underwater second mortgages

under water house bankruptcy

In 1992, the Supreme Court determined that homeowners whose first mortgage was underwater could not have their bank’s lien cancelled. This especially applied to people filing Chapter 7 bankruptcy. That ruling said that if someone had a mortgage on their home and the home was worth less than this mortgage, then the bank still owned…

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Bankruptcy, the lifesaver, even affects mortality

bankruptcy study credit card photo

It can come as a surprise to some that personal bankruptcies can do more than just wipe out debt. This form of relief can affect the national level of employment, its earnings and even its mortality rates. Bankruptcy, of course, doesn’t give someone a raise, but its effects may appear that way that when you…

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What debt can be discharged in bankruptcy? What debt cannot be discharged?

discharge debt bankruptcy

In a consumer, personal Chapter 7 bankruptcy, an individual (or two individuals, if filing jointly) can erase most of their debts. We say, “Chapter 7” because it is one of several “chapters” that the Bankruptcy Code governs. Each chapter is different. For example, Chapter 9 is meant for municipalities, such as cities. A Chapter 7…

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New study finds that bankruptcy leads to wage and employment gains

bankruptcy's advantages

Bankruptcy can have effects on earnings, employment and mortality rates. These go far beyond regaining financial freedom according to a new study published by the National Bureau of Economic Research. The study looked at court and tax records of about 500,000 Americans who recently filed for Chapter 13 bankruptcy. The study compared people at the…

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New York must pay for failure to observe bankruptcy’s automatic stay

wage garnishment

When a bankruptcy petition is filed, what is known as an “automatic stay” is put in place on the debtor’s bankruptcy estate. A bankruptcy estate is the grouping of a person’s assets that they are put in their bankruptcy filing. The automatic stay prevents creditors from collecting on debts covered under the estate. This is…

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Bankruptcy petition improperly filed

bankruptcy plans

Bankruptcy is usually filed by the person or entity that is unable to pay its debts, and that is looking for either a discharge of such liability or to establish some sort of a repayment plan, as per a Chapter 11 or a Chapter 13 bankruptcy respectively.  However, recently a few creditors filed a petition…

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Huge amount of peanut butter discarded

Recently, a large amount of peanut butter was discarded at a New Mexico dump as reported by the AP in a March 28, 2014 article. This was done so that the plant that manufactured the peanut butter, Sunland Inc., could be sold faster. This peanut butter manufacturing facility is well known because it “was at…

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Taxes and Bankruptcy

attorney lutzky

Common questions that clients filing for bankruptcy ask are about taxes, especially around this time of the year. What should I do if I owe taxes? What should I do if I expect a large refund? First thing first is to file taxes, on time–by April 15th. The Bankruptcy Tax Guide (IRS Publication 908) specifies…

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If one files for bankruptcy, does this reduce one’s mortgage?

Bankruptcy Bronx

Usually people file for bankruptcy when they are unable to keep up with their mortgage payments, credit card payments, medical bills, etc.  Many people file for bankruptcy because they are unable to keep up with their mortgage payments and they do not want to lose their homes. When one files for a Chapter 7 bankruptcy,…

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Trends in personal bankruptcies in Northern and Western Districts of New York

Bankruptcy New York

U.S. District Courts, that is, federal courts, handle bankruptcy cases. In New York, these courts are broken into four geographical districts—the Northern, Eastern, Southern and Western districts—according to the National Archives online. According to research by a New York law firm, there are visible trends in bankruptcy filings in upstate New York, as reported by…

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Controlling your emotions while filing bankruptcy

bankruptcy law

It is important in filing bankruptcy to regain control of your finances, but it is also important to maintain control of your emotions. Many people filing for bankruptcy face emotional distress, according to a January 18, 2013 U.S. News and World Report online article. Experts say that this need not be so. Financial therapists have…

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Bankruptcy filings down in 2012

According to the Boston Globe and the Times Union in articles published on January 22, 2013, bankruptcy filings were down in Massachusetts and the Albany region in 2012 as compared to previous years. Experts say that the number of bankruptcy filings often follows the economy. For example, in 2009, banks offered credit to many borrowers…

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