Navigating Bankruptcy as a Long Island Resident

Filing for bankruptcy can be a difficult decision for Long Island residents struggling with debt. However, working with an experienced bankruptcy lawyer can simplify the process and help you get a fresh financial start. This article provides an overview of bankruptcy in Long Island, common bankruptcy myths, the different types of bankruptcy, and what to expect when filing.

Bankruptcy Basics for Long Islanders

Bankruptcy is a legal process governed by federal law that can help people eliminate or repay some debts under court supervision. It involves filing paperwork in federal bankruptcy court and working with a trustee appointed by the court. Many people have misconceptions about bankruptcy and avoid it due to stigma. However, it is a useful financial tool that provides much-needed relief from suffocating debt.There are two main types of personal bankruptcy filings in Long Island – Chapter 7 and Chapter 13. Chapter 7 bankruptcy eliminates eligible debt like credit cards, medical bills, personal loans, etc. Chapter 13 bankruptcy uses a 3-5 year repayment plan to catch up on debts like mortgages, car loans, taxes, etc. The type you file depends on your specific situation.

5 Common Bankruptcy Myths

Before deciding whether to file bankruptcy, it helps to separate fact from fiction. Here are 5 common myths about bankruptcy:

• Myth: Bankruptcy ruins your credit forever.
  • Fact: Bankruptcy damages your credit, but your scores start recovering after about 12 months. After 7-10 years, the bankruptcy is removed from your credit report.
• Myth: You can only file bankruptcy once.
  • Fact: You can file Chapter 7 bankruptcy once every 8 years and Chapter 13 bankruptcy once every 4 years.
• Myth: All your property will be seized if you file.
  • Fact: You can keep exempt property like your home, car, retirement accounts, and household belongings. The exemptions vary by state.
• Myth: Bankruptcy is “immoral” and irresponsible.
  • Fact: Financial problems can happen to anyone. Bankruptcy provides a chance to start over.
• Myth: Bankruptcy is embarrassing and “public”.
  • Fact: Bankruptcy records are public but rarely searched unless you’re applying for credit or employment.

Overview of Chapter 7 and Chapter 13 Bankruptcy

Here is a quick rundown of how Chapter 7 and Chapter 13 bankruptcy work in Long Island:Chapter 7 Bankruptcy

• Eliminates eligible debts like credit cards, medical bills, personal loans, etc.
• Allows you to keep exempt assets like your home, car, retirement accounts, etc.
• Takes 3-6 months to complete.
• Debts discharged, or erased, at end of process.
• Can’t file again for 8 years.

Chapter 13 Bankruptcy

• Uses 3-5 year repayment plan to catch up on debts.
• Commonly used for mortgages, car loans, taxes, child support, etc.
• Pay a portion of debt and keep property like homes or cars.
• Interest and penalties halted on eligible tax debt.
• Can file again after 4 years (vs. 8 years for Chapter 7).

For both types, you’ll need to pass a “means test” to qualify and complete credit counseling. The process seems complex, but an attorney guides you through each step.

Finding the Right Long Island Bankruptcy Lawyer

Choosing the right lawyer is crucial for smoothly navigating bankruptcy. Look for an attorney who is experienced in bankruptcy law, not a general practitioner. Be sure they are licensed in New York and familiar with Long Island courts. Consider factors like:

• Specialization in personal bankruptcy law
• Member of the National Association of Consumer Bankruptcy Attorneys (NACBA)
• 10+ years of experience handling Chapter 7 and 13 cases
• Familiar with federal bankruptcy laws and Long Island exemptions
• Reasonable fees and payment plans

Avoid attorneys who pressure you to file or promise to “stop foreclosure” or “erase all debt”. A reputable lawyer will review your situation and explain your options.

What to Expect When Filing Bankruptcy in Long Island

Here is an overview of what to expect when filing bankruptcy in Long Island:1. Initial consultation – Meet with attorney to discuss situation and options. They’ll explain the process and let you know if you qualify.2. Pre-filing paperwork – Provide financial documents so attorney can prepare forms. Includes tax returns, pay stubs, bills, asset/debt lists, etc.3. File petition – Paperwork filed in court to open case. Automatic stay stops collections. Trustee assigned.4. Attend 341 meeting – You and attorney meet with trustee for questioning (about 30 mins).5. Wait for discharge – Timeline depends on type of bankruptcy. Discharge eliminates eligible debts.6. Complete education course – Required credit counseling course to help avoid future financial issues.The process takes 3-6 months for Chapter 7 and 3-5 years for Chapter 13. It can seem intimidating but your lawyer handles the legwork. Many clients say filing bankruptcy gave them their lives back.

Making the Decision to File Bankruptcy in Long Island

Here are some signs it may be time to speak with a bankruptcy attorney in Long Island:

• You’re using credit cards to pay living expenses
• Creditors are calling constantly about late payments
• You’ve tapped out friends/family trying to pay urgent bills
• You’re facing wage garnishment or lawsuits from creditors
• Mortgage/rent is jeopardizing your ability to pay other bills
• You’ve tried debt management plans or consolidating with no success

Bankruptcy provides a chance to reset your financial life. The stigma around filing has decreased over the years – it’s now viewed as a practical solution. If you’re overwhelmed by debt with no end in sight, meet with an attorney to discuss whether bankruptcy is your best path forward.

Finding Financial Freedom in Long Island

The bankruptcy attorneys at Delancey Street help Long Island residents find financial freedom from debt. If you’re considering bankruptcy, contact us today to schedule a free consultation. We’ll review your unique situation, explain the bankruptcy process, and help you decide on the best path forward. With our personalized guidance, you can eliminate debt and get a fresh financial start. Don’t struggle with debt a moment longer – relief is possible.