Chapter 7 Bankruptcy Cases and Foreclosure
Filing Chapter 7 bankruptcy can be complicated, especially for those with no knowledge of bankruptcy law. There are many procedures which must be followed and many find it beneficial to have an attorney helping them gather paperwork and fill out the necessary forms. A Long Island bankruptcy attorney from our firm can help you file bankruptcy with the bankruptcy court through the following steps:
- A schedule of current income and expenditures.
- A statement of financial affairs.
- A schedule of executory contracts and unexpired leases.
- A certificate of credit counseling
- A copy of any debt repayment plan developed through credit counseling.
- Evidence of payment through employers received 60 days before filing.
- A statement of monthly net income and any expected increases in income or expenses after filing.
- A record of any interest the debtor has in federal or state education or tuition accounts.
Not only do all of the above need to be filed, but individuals declaring Chapter 7 bankruptcy will also need to provide the following information with the help of their New York bankruptcy lawyer:
- A list of all creditors and the amount and nature of their claims
- The source, amount, and frequency of the debtor’s income
- A list of all of the debtor’s property
- A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
A Chapter 7 bankruptcy case may stay the foreclosure of your home until after the bankruptcy proceedings have finished, if the judge makes this determination. You will likely need to continue paying your mortgage payments in order for this to occur. After your Chapter 7 case has concluded, however, the lender will still have the right to continue with the foreclosure of your home and use the proceeds of this sale as payment for your mortgage.
If you are facing foreclosure and bankruptcy, your lawyer can help you make it through with the least amount of loss. For instance, your lawyer may be able to negotiate with your lender to pursue loan modification. If your lender has violated the Truth in Lending Act, this may be grounds to dismiss your foreclosure. No matter your particular situation, having a lawyer on your side will make a difference in your bankruptcy case. This form of bankruptcy typically may stay a foreclosure for 90 days, and this may give you an opportunity to increase your income, or pursue a short sale or loan modification. Your unsecured debt will be reduced after your bankruptcy proceedings conclude, and this may put you in a better position to negotiate with your lender.
Chapter 7 Proceedings
Chapter 7 bankruptcy proceedings begin when your Long Island bankruptcy attorney files a petition with your local Bankruptcy Court. This petition will need to include your personal information as well as in depth financial information regarding your assets, property, income and debt. Your attorney can help you gather this information and ensure that it is accurately reported to the Court.
The Court will appoint a bankruptcy trustee to oversee bankruptcy. An “automatic stay” is entered when you file for bankruptcy, wherein creditors are prohibited from pursuing action to collect debt. This means you can experience immediate relief from creditors. During Chapter 7 proceedings, you may be able to follow through with a reaffirmation of debt on certain assets, such as your car. You would promise to continue to make payments on the car and would then be able to keep it, rather than lose possession of it.
Upon the successful conclusion of a New York Chapter 7 bankruptcy case, your debts will be “discharged.” This means that you will no longer owe creditors and that they cannot pursue any legal action or otherwise attempt to collect the debts from you. Not all debt is eligible to be discharged, such as alimony, child support, student loans and some taxes. Debt eligible for discharge includes: credit card debt, medical bills, personal loans and more.
Qualifying for Chapter 7 in New York
Not everyone is eligible to file for bankruptcy under Chapter 7 of the Bankruptcy Code. In practice, an individual, corporation, partnership or other business entity may file a petition for Chapter 7. For an individual, if your income is at or below the median income amount in New York, you are likely to qualify. Even if your income is higher than the state median, or if your disposable income is higher than the specified amount, you may still qualify to file for Chapter 7. Your attorney can help you make this determination.
FOR MORE INFORMATION CALL JACOBY & JACOBY AT (631) 289-4600.