Bankruptcy Attorneys - Debtor and Creditor Rights

There are many indicators of financial instability and some are strong predictors of future bankruptcy.

• Borrowing from your 401k to pay debt.
• Opening new credit card because you maxed out the cards you have.
• Making only the minimum credit card payments.
• Your mortgage or car payments are late, in default or you are deferring payments.
• You have or are thinking of debt consolidation loan.
• You are not filing tax returns because you cannot pay the tax due.
• You have wage garnishments.
• You are receiving phone calls from debt collectors.

Sometimes, people or companies may want to avoid bankruptcy. There are several alternatives that may reduce your debt obligations. Our attorneys can negotiate with your creditors without involving the courts.  This option can benefit both sides.  Rather than risk receiving nothing, a creditor might agree to a repayment schedule that reduces your debt and spreads your payments over a longer period of time.

Tax debts, whether IRS or New York State income or sales tax debts, can also be negotiated.  You may be eligible for an offer in compromise, allowing you to settle for an amount less than you owe.

Let our attorneys review your financial situation to determine the best course of action for your debt relief.

This process involves discharging most debts while preserving exempt property. For individuals, the goal is to discharge all eligible debt. Individual consumers are required to take a consumer credit counseling course prior to filing, and must meet certain standards to file under Chapter 7. For example, an individual may have secured debt such as a car loan. In Chapter 7, most car loan lenders will require the client to sign a reaffirmation agreement to keep the car. This process is subject to review by the court. If approved, the client would then be responsible for any shortfall in the event of a future default. While Chapter 7 filing is also available to corporations, partnerships and limited liability companies, business operations must cease upon filing because the business assets fall under the jurisdiction of a Chapter 7 trustee and as such other options may need to be reviewed.

Chapter 11 shares with Chapter 13 the same premise of securing a repayment plan to creditors, but the Chapter 11 process is highly complex and involves shorter timeframes. The client typically proposes a repayment plan for court approval and creditor acceptance. While most often used by businesses that believe they have a chance to rehabilitate the company, this chapter is also available to high-income individuals who do not otherwise qualify for Chapter 13.

With extensive experience assisting our clients in the Chapter 11 process, be they corporations, partnerships, limited liability companies, not-for-profit organizations or individuals, we offer clients advice grounded in property, business, tax, and bankruptcy law.

Limited to a "family farmer" as that term is defined in the Bankruptcy Code, Chapter 12 involves securing a repayment plan with creditors. Payments are then made to a Chapter 12 trustee who in turn disburses the funds to creditors.

This is the Chapter that allows individuals to retain their property and pay delinquencies over a period of time.  Chapter 13 is available only to individuals, up to a set debt amount limit. Repayment plans to creditors are limited to five-year terms. Payments are made to a Chapter 13 trustee who then distributes the funds to creditors. As with Chapter 7, debtors are required to take a consumer credit counseling course. The debtor need not surrender non-exempt assets as is required under Chapter 7. The most commonly used advantage of Chapter 13 is the right to stop a foreclosure and pay arrears under the repayment plan. Our multi-faceted approach to both real estate transactions and bankruptcy helps clients get back on the road to financial health.