FILING A CHAPTER 7 BANKRUPTCY ON LONG ISLAND Chapter 7 wipes out most debts. File a Chapter 7 if you want to discharge: credit cards medical bills personal loans/bank loans (repossessed) car loans utility bills As soon as Chapter 7 is filed, the automatic stay goes into effect. That means creditors can no longer: a) sue you (and if they already started suing you, they have to stop); b) freeze your bank account; c) garnish your salary. (If a creditor is already freezing your bank account or garnishing your salary, they have to stop doing these things once you file a bankruptcy). A Chapter 7 can usually be filed in less than one week's time. It takes approximately four (4) months from the time you file for Chapter 7 to receive your discharge order from the Bankruptcy Court. (You get a court order from the Bankruptcy Court stating that your debts are officially discharged). During these four (4) months -- while you are waiting to receive your discharge order -- your creditors cannot do anything to collect on any of your debts. 4-6 weeks after the filing date, there is a trustee meeting which the debtor must attend (I will be with you, (and representing you) at the trustee meeting). The trustees are private attorneys, appointed by the Bankruptcy Court, to administer the Chapter 7 cases. Each Chapter 7 case is assigned a trustee. At the trustee meeting, the trustee will be going over your Chapter 7 petition (ie. the assets, debts, income and expenses),essentially to have you verify, under oath, that the information in your Chapter 7 petition is true and complete. The trustee meetings are held at the Bankruptcy Court in Central Islip (located in the Long Island Federal Courthouse in the Cohalan Court Complex). You will need to bring your driver's license and Social Security card with you (for identification purposes) to the trustee meeting. There is no judge present at the trustee meeting, and creditors rarely show up. The meeting normally takes about 10-15 minutes, although you mat have to wait (rarely more than an hour) for your case to be called. 99% of the time, you only have to go to court once ( for the one examination by the trustee). Although a Chapter 7 bankruptcy will stay on your credit profile for 10 years from the date you file your Chapter 7 petition, you do not have to wait 10 years (or any specific period of time) to start rebuilding your credit. In fact, there are some ways for you to start rebuilding your credit immediately -- once you have received your Chapter 7 discharge. Click on the "rebuilding credit" button on the home page of my web site for more information on this topic. Please note that the Bankruptcy Laws have changed as of October 17, 2005. The present Bankruptcy Code is focused on the debtor's income more than was the case under the old law. If your income is below the median income for New York State (i.e. 1 person household - $46,295 per year; 2 person household - $57,777 per year; 3 person household - $68,396 per year; 4 person household - $83,942 per year; For households numbering more than four persons, add $7,500 for each individual in excess of 4) your income will not be an obstacle to filing a Chapter 7 or to receiving a discharge of your debts. Even if you are above the median income, there is still a very good chance that you can file a Chapter 7 petition and receive a discharge of your debts. The debtor's income is now listed on a new form called the Means Test. (Means test figures are based on averaging out the 6 months' income prior to filing of the Chapter 7). If your income is above median income, the second part of the means test must be filled out. The second part of the means test contains the expense deductions against income (i.e. food and clothing, housing, utilities, transportation, income taxes, etc.). Some of the expense items (such as food and clothing, rent, utilities, and transportation) on the means test are fixed numbers which are taken off an IRS chart, whereas other expense items ( such as mortgage payments, health insurance and payroll taxes) are based on what you actually spend. In many Chapter 7 cases, even if the debtor is above the median income, the expense deductions are great enough to eat up all of the debtor's income (thus showing that the debtor does not have any money left over for paying back creditors), thereby allowing the debtor to file a Chapter 7 and discharge his debts. Two other items of note in connection with the present Bankruptcy Code: 1) The Bankruptcy Code requires the debtor to provide his attorney with a copy of his most recent federal tax return as well as pay stubs for the 60-day period prior to the filing of the bankruptcy. 2) The debtor must take two counselling sessions. The first session (called the credit counselling) must be completed by the debtor prior to filing the Chapter 7 petition. It can completed over the Internet and telephone (It takes approximately one hour of total time). The second session (called the Financial Management Course) must be completed by the debtor after the filing of the petition but before the debtor receives his discharge order. The Financial Management Course involves reading over a booklet on managing your money (mostly common sense) and then taking a multiple choice test. FILING A CHAPTER 7 BANKRUPTCY WHEN A BUSINESS IS INVOLVED If you would like a free consultation on Chapter 7 bankruptcy with Alan Pressman, call (631) 234-3883. I have been actively handling bankruptcy cases on Long Island since 1981. My office is located at 1797 Veterans Highway, Islandia (1/4 mile southeast of LIE exit 57-- across from the Islandia Shopping Center). I have been practicing law at the same Islandia location for more than 28 years. My fees are very reasonable. Evening appointments are available. I will handle your case personally. My law practice is focused 100% on handling bankruptcy cases. Bankruptcy is my entire law practice. Call now for a free consultation. (631) 234-3883 1797 Veterans Highway, Islandia -- Across from the Islandia Shopping Center; Long Island Expressway Exit 57, 1/4 mile southeast Thanks for taking the time to visit my website. Copyright 2011, Alan Pressman Attorney At Law |
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