Bankruptcy is a legal process that helps honest hardworking people obtain relief from overwhelming debt.  There are many reasons why personal debt can become unbearable; unemployment, death of a spouse or partner, divorce, long-term illness or disability, or even a business failure can make it extremely difficult for a person to keep up with their bills.

Bankruptcy can give you a fresh start by either erasing debt or allowing you a chance to reorganize your finances to make payments more manageable.

These are the two main types of personal bankruptcy:

Chapter 7

A Chapter 7 Bankruptcy erases all of your qualifying debts (some debts like taxes and student loans may not be eligible for discharge in a Chapter 7).  Once you file the required papers, a Chapter 7 can be completed very quickly, usually in about 3-4 months.  Chapter 7 eliminates all unsecured debts like credit cards, bank loans, medical bills, court judgments, and deficiencies on repossessed cars and foreclosed homes.

Certain personal property is protected in Chapter 7.  Things like modest home furnishings, clothing, cash and bank accounts not exceeding $2500, and qualified retirement accounts, like a 401K or an IRA, are exempt from liquidation.  But some property cannot be protected and may be liquidated and sold.  Therefore Chapter 7 may not be the best option for people with equity in their home over $50,000, car owners whose vehicle is worth more than $2400, or people who have large amounts of savings and disposable income, stocks and bonds, or other assets not considered “exempt.” (See Chapter 13, below)

Filing a Chapter 7 Bankruptcy immediately stops most collection actions against you, including foreclosure, garnishment, bank restraint, lawsuits, and phone calls and letters from creditors.

Chapter 13

A Chapter 13 Bankruptcy is often called the “wage earners bankruptcy” and may be more appropriate for people with regular income who own homes, cars, or other property that is not exempt from liquidation under a Chapter 7.  A Chapter 13 does not completely erase your debt.  Instead, it gives you a chance to reorganize your debts and arrange a repayment plan that allows you to pay off reduced balances over a 3-5 year period.  Chapter 13 is a more complex and lengthy process.  But with the proper assistance and personal discipline it is a good way for someone to reorganize their finances and protect their property.

If you have valuable assets to protect and feel overwhelmed by your debts now, but have the income to pay back part of them over a period of time, Chapter 13 may be the best bankruptcy relief for you.

The Schlanger & Schlanger Difference

We are not a bankruptcy “mill.”  Schlanger & Schlanger gives every client close individual attention.  Unlike some other firms, in which the client may meet the attorney for the first time at on the courthouse steps, our attorneys are personally involved at every step of the process.  During your initial consultation, you will meet with attorney Peter Lane who will explain the bankruptcy process and review your finances to determine which bankruptcy methods are best for you.  Once your papers are filed, Mr. Lane will appear with you at all meetings and hearings.  He will also work closely with you to gather all the necessary information to ensure that you file your bankruptcy correctly and receive the relief you deserve.

With offices in Westchester and Manhattan, Schlanger & Schlanger, LLP represents consumers in all five boroughs of New York City (Manhattan, Brooklyn, Bronx, Queens, and Staten Island), as well as Westchester, Rockland, Orange, and Putnam counties.

Contact Schlanger & Schlanger or call (914)946-1981 to schedule your free initial consultation.

Schlanger & Schlanger, LLP is a debt relief agency under the Bankruptcy Code.  We help people file for bankruptcy relief and resolve their debt problems.