Nassau Suffolk County Long Island Chapter 7 11 13 Bankruptcy
Lawyers Attorneys Queens LI NY
Chapter 7 can be used by individual, self-proprietors, corporations, and partnerships. Chapter 7 is most commonly used by individuals to eliminate their debts by having their assets liquidated for the benefit of creditors, and by businesses to liquidate their business in an orderly fashion. Unlike Chapter 13 a debtor does not have to use income earned "after" he or she files for bankruptcy to pay off past debts. However, any property owned may have to be sacrificed for the benefit of creditors and fewer debts are discharged than under Chapter 13.
Full service is generally the recommended approach for clients filing under Chapter 7. Under this approach we represent the client throughout the bankruptcy process on all issues except those issues specifically excluded by contract. Bankruptcy is a complex process and clients can certainly benefit from having attorney representation throughout the entire process.
Chapter 13 can only be used by individuals. Most commonly used by individuals to retain valuable property such as a home or car by agreeing to a payment plan to “fully” pay off debts related to the property and fractionally pay off their other debts. Unlike Chapter 7, debtors must devote income” earned” after the date he or she files for bankruptcy to pay off past debts, and thus debtors can expect to be on a tight budget during the duration of the payment plan period. In exchange for the willingness to make payments on the debts, Chapter 13 allows debtors to keep their property and discharge more debts than are possible under
Chapter 7.
Chapter 11 is primarily used by businesses that need to reorganize in order to get out from under debt, but is also theoretically available to consumer debtors. In Chapter 11, the debtor proposes a plan for paying some or all of his debts, and his creditors get a chance to vote on whether to accept or reject that plan. In some cases, it may be possible to “cram down” a plan against a dissenting class of creditors. Chapter 11 may be the only recourse for a consumer debtor with an extremely large mortgage that causes his secured debt to exceed the limit for Chapter 13.
A bankruptcy case begins with the filing of a petition and several forms with the bankruptcy court in your area. The forms contain lists of all your assets, debts, income, expenditures, as well as other personal background and financial information. In a Chapter 7 (liquidation) case, the court will appoint a trustee to represent the interests of your creditors. A month or so after filing, you must attend a so-called “meeting of creditors” with the trustee to answer questions regarding your assets, debts, and so forth. Despite the name, creditors rarely attend these meetings. After the meeting, the trustee sells ("liquidates") the property that can be taken from you and splits the proceeds among your creditors. At the end of liquidating your property, the court schedules a final hearing and discharges your debts. The effect of this is that you no longer legally owe your creditors and they are forbidden from trying to collect any unpaid percentage.