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Is It Better to File a Chapter 7 or 13 Bankruptcy in Central New York & The North Country?

Struggling with significant debt can be debilitating. The stress of constantly thinking about money can negatively impact your physical and mental health, triggering feelings of anxiety, depression, and hopelessness. Many people struggling with debt feel isolated and even ashamed of their situation, making it even more difficult for them to seek help or feel hopeful about the future. However, it’s essential to recognize that you are not alone in your financial struggles. Many individuals, families, and businesses across the country are coping with similar financial burdens. If you are ready to explore your options for regaining control of your financial situation in Central New York and the North Country, enlist the compassionate guidance of a trusted bankruptcy attorney to help you achieve your goals. Together, you can determine whether pursuing a Chapter 7 or Chapter 13 bankruptcy will best serve your needs.

Chapter 7 Bankruptcy Basics

Chapter 7 bankruptcy, also known as a “straight” bankruptcy, allows the petitioners to obtain a fresh financial start by discharging (wiping away) several types of debts. The law provides for exemptions that protect the majority of people’s assets. Most people filing for Chapter 7 bankruptcy have little to no nonexempt assets (i.e., a second home, a luxury vehicle, valuable collections or artwork, etc.), and they usually keep most of their property. After the bankruptcy is completed, your dischargeable debts will be wiped away, and you can start rebuilding your credit and regaining control of your financial situation right away.

Advantages of a Chapter 7 Bankruptcy Filing

Chapter 7 bankruptcy offers several advantages for those who want a fresh financial start. The process is relatively smooth and efficient, typically resolving in as little as three to four months. Many of your debts are wiped out, leaving you with only your nondischargeable debts (including student loans, recent taxes, and unpaid child support). Additionally, you can typically protect your property during a Chapter 7 bankruptcy filing. As long as you are current on your house and car payments, you may be able to keep these types of assets during and after the bankruptcy process.

Who Benefits From Chapter 7 Bankruptcy Relief

Many individuals can find much-needed debt relief through Chapter 7 bankruptcy. Chapter 7 bankruptcy works especially well for those who own little to no property, have significant credit card balances, medical bills, and personal loans, and whose family income does not exceed the state median for the same family size. To qualify for Chapter 7 relief, you will need to pass what’s known as the “means test” to determine whether your income qualifies for this chapter. If your income falls below the designated threshold, you may proceed with your Chapter 7 bankruptcy filing.

Chapter 13 Bankruptcy Relief in Central New York & The North Country

It’s important to recognize that Chapter 7 bankruptcy isn’t necessarily the best choice for everyone. Those who exceed the income threshold for pursuing a Chapter 7 bankruptcy filing often find more success by filing for Chapter 13 bankruptcy relief. While most debts are wiped out all at once during the Chapter 7 bankruptcy process, Chapter 13 requires the petitioner to pay back a percent of their debt over a three to five year period. You can also pay back mortgage or car arrears and back taxes. You can stop foreclosures, repossessions and lawsuits with a Chapter 13 bankruptcy. You can also protect any property that you own that would otherwise be unprotected in a Chapter 7 bankruptcy.

When Chapter 13 Bankruptcy May Serve You Best

Also known as “reorganization” bankruptcy, Chapter 13 best suits those who have a regular source of income but need help paying off their debts. You typically pay back a small percent of the debt in a Chapter 13 and at the end of the bankruptcy the remaining debt is wiped away. This type of bankruptcy works well for those who do not qualify for Chapter 7 bankruptcy but are still seeking relief to lower credit card payments, stop impending litigation, or prevent wage garnishment. Additionally, those with non-dischargeable debts like alimony or child support back payments can steadily pay these off over the three to five-year payment plan. You may also be able to catch up on missed car or mortgage payments, allowing you to keep your vehicle or property in your possession.

Guiding You With the Compassion You Deserve

Debt issues can be overwhelming and isolating. However, you do not have to go through this challenging time alone. Consider reaching out to a caring and compassionate New York bankruptcy attorney to discuss your debt relief options. Your attorney understands the challenges and fears you face, and they will work hard to help you identify the most strategic path forward. Now is the time to regain control of your financial situation and feel hopeful about the future once more. Get started with a trusted and dedicated attorney today to learn more.

If you need help understanding your debt relief options in Central New York, call Grady BK, PLLC, today at (315) 299-9005 to discuss your situation with an experienced and compassionate bankruptcy attorney.