In essence, bankruptcy law offers a debtor different options in eliminating debt and getting a fresh financial start. Depending on the Chapter of the U.S. Bankruptcy Code under which a person files for bankruptcy, this will be accomplished in different ways. For example, a Chapter 7 bankruptcy involves the liquidation of unprotected assets to pay part or all of the filer’s debt. Chapter 13 bankruptcy, on the other hand, involves a payment plan completed over a period of 3 to 5 years wherein the debtor pays a portion of the debt he or she owes. Successfully completed, either a Chapter 7 or Chapter 13 bankruptcy will result in the elimination of all eligible debt.
Bankruptcy is governed by both state and federal law. U.S. Bankruptcy Code is the federal law that governs bankruptcy, and states have individual laws as well. In New York, there are also particular state laws that apply to bankruptcy, such as the property and assets that may be exempt from liquidation. For a person filing for bankruptcy in Long Island, the following exemptions may apply:
- Real property of up to $50,000
- 90% of earnings
- Motor vehicle worth up to $2,400
- Other property, such as clothing, furniture, cookware, wedding ring, food, domestic animals, and trade tools – possibly up to a certain value
To find out more about how bankruptcy law affects your financial situation and how it may offer you the protection you need, contact a Long Island bankruptcy lawyer at our law firm today.
FOR MORE INFORMATION CALL JACOBY & JACOBY AT (631) 289-4600.