Chapter 7 Bankruptcy in Albany NY
When you file for Chapter 7 bankruptcy in Albany, NY, the majority of your unsecured debt—including credit card debt, medical bills, and personal loans—will be formally dismissed by a bankruptcy court, giving you a "second chance" to recover control of your finances. However, it almost never discharges alimony, child support, student debts, or tax obligation. The quickest, easiest, and most popular type of bankruptcy is Chapter 7, also referred to as "liquidation bankruptcy." According to the American Bankruptcy Institute, Chapter 7 cases accounted for 69% of all bankruptcy files in 2021 despite unexpectedly falling 24% (to 397,370) overall. In other words, if you are eligible to petition for chapter 7 and employ our chapter 7 lawyer, you are likely to be successful.
On the other hand, it is important to note that just 55.6% of self-represented filers were successful. The court conducts a "means test" for each Chapter 7 petition, therefore not all applicants are eligible for Chapter 7 bankruptcy in Albany, NY. The bankruptcy means test looks at your financial records to see if your disposable income is below the median income (50% lower, 50% greater) for your state. This includes income, expenses, and secured and unsecured debt. States have different means of tests based on income. Although numerous web sources estimate that 96% of Chapter 7 applications are "no asset" cases, meaning there is not enough equity or value in the property for a trustee to sell it and pay off creditors, applicants are occasionally obliged to sell any nonexempt assets. |
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If the bankruptcy petition is accepted, the court imposes an "automatic temporary stay" that prohibits creditors from seeking to collect payments or taking action like repossession, foreclosure, or wage garnishment while the bankruptcy case is ongoing. Chapter 7 bankruptcy in Albany, NY procedure typically takes four to six months to complete. Keep in mind that unless you can demonstrate special circumstances, you will still be required to pay back your school loans, tax debt, and any secured debt. However, the majority of consumer debts, including credit card and medical debt, are dischargeable.
What You Must Avoid Before Filing Chapter 7 Bankruptcy?
A certain procedure must be followed in the months leading up to a Chapter 7 bankruptcy petition. Your attempts could be thwarted if you don't follow these directions. Here are some things to avoid before filing for Chapter 7 bankruptcy in Albany, NY.
- Don't Pay Creditors. That sounds strange, doesn't it? Let us explain. Continue making regular payments as much as you can. However, any significant or out-of-the-ordinary payments may be considered "preferential transfers," which indicates that one creditor has unfairly profited over others.
- No New Debt. A new creditor can assert that you took out a loan or ran up a credit card amount without intending to repay it. That is fraud according to the law, and it won't be excused.
- No Atypical Transactions. Never transfer the title to a car or a house. Avoid purchasing upscale items. Don't sell your company or change the name on it. These actions can all be categorized as fraud.
- Be Sincere and Complete. When filing for bankruptcy, you must present accurate facts. Any debt, assets, accounts, or other financial data must be disclosed. It's crucial to keep all financial records and papers connected to the filer's obligation. In order to ascertain if a filer's most recent financial transactions were done with the intention of defrauding creditors, the court will examine such transactions. People hide their assets using a variety of unethical methods prior to filing for bankruptcy, but they are unaware that the trustee can quickly catch them all. Incomplete and dishonest compliance could result in fraud and even criminal penalties. Additionally, you shouldn't declare bankruptcy if you're anticipating receiving a sizable chunk of money, like an inheritance. That money could be used to reduce your debt. Otherwise, a court agent could seize that money to settle your debts if you're going through a bankruptcy process. Never assume you can get away with being deceitful or devious. The best person to ask for advice on what is right or incorrect in this circumstance is our chapter 7 attorney.
- Hands-Off Retirement Funds. In most cases, bankruptcy proceedings are not permitted to affect retirement plans and accounts. While considering bankruptcy, keep them secure; do not even consider using them to settle the debt.
When to File Chapter 7 Bankruptcy?
Chapter 7 bankruptcy filing can be the best course of action. However, the successful repayment of your debts will have a significant impact on your financial situation for several years. Don't act rashly. Before making your final decision, be sure to carefully consider the five cautionary indicators. It's a widespread misperception that people and couples should file for Chapter 7 bankruptcy as soon as things start to go south. If creditors are pestering you, seizing your earnings and bank accounts, and you have no other way to pay the bills, you might want to think about filing for Chapter 7. When all other options to pay your obligations have failed, you may think about filing for Chapter 7 as a final alternative. There are strong indications that filing for Chapter 7 would be the best course of action including the following:
- More than half of your annual income is taken up by your unsecured loans.
- Even if you took drastic measures, it would still take you five years or more to pay off your debt.
- Your debt causes stress in crucial areas of your life, including relationships, your ability to concentrate at work, and your sleep quality.
- Your disposable money is minimal to nonexistent despite your best attempts to stick to a budget.
- Your monthly income is lower than the state median.
How to File for Chapter 7 Bankruptcy?
Some people file for Chapter 7 "pro se"—without the assistance of a chapter 7 lawyer. Inexperienced people can make errors that are substantial enough for a judge to reject their request for protection, which saves money on legal fees. You must take the following actions under Chapter 7 whether you have a chapter 7 lawyer or not:
- Join A Credit Counseling Program. All people who file for bankruptcy are required by law to complete a credit counseling course from an approved provider and hand in their certificate of completion to the court. The training must be at least one hour long and usually cost less than $50. A debt management plan, for example, may be suggested by a credit counselor as an alternative to bankruptcy.
- Gather Your Paperwork. Credit reports, tax returns, pay stubs, brokerage, and retirement account statements, vehicle registrations, and real estate appraisals are all required.
- Fill Out Forms. Lists of assets and obligations, descriptions of your income, expenses, overall financial status, and any leases or other contracts you are obligated to uphold are all included in the schedules, statements, and other documents that go along with your bankruptcy case. The necessary bankruptcy forms are available for download on the website of the United States Courts.
- Complete Your Petition, Then Submit It. Print off your petition and any associated forms in single-sided format after downloading and completing your formal request for bankruptcy protection. Bring the necessary documentation to the bankruptcy court at the local federal courthouse.
- Pay Fees. At filing, you must pay $338 in court costs. If you're unable to do so, you can request to pay the fees over time. Additionally, the fees can be waived.
- Take Note Of The Specifics Of Your Case. The name of the trustee in charge of your case, the case number, and the date, time, and place of your required meeting with creditors will all be sent to you by the court clerk once you have filed.
- Get In Touch With The Trustee. It is unlikely that you will interact with or see the bankruptcy court judge. However, the trustee in charge of your case will write to request more details. This will include any records you gathered but did not submit with your petition, such as tax returns and bank statements.
- Consider Debtor Coaching. Keep the certificate in hand and enroll in another course, this one on debtor education. A debtor education provider that the US has approved must deliver the course. The bankruptcy system is supervised by the Trustee Program.
- Attend The Creditors' Meeting. You will be sworn in by the trustee, and creditors will have the chance to question you. Many filers have little choice but to wait to learn whether their debts have been erased after the hearing with creditors. From beginning to end, the process takes roughly four to six months.