Individuals and families facing financial difficulties are not alone in their struggles. As inflation continues and people and businesses across the country find themselves falling farther behind on repaying their debts, it’s natural to feel overwhelmed and anxious about what the future may hold. While you may feel like giving up, there are options available to you to help you obtain the fresh start you need. For many people, Chapter 7 bankruptcy relief offers you the opportunity to regain control of your finances and feel hopeful about the future once more. If you are considering filing for Chapter 7 bankruptcy in Central New York and the North Country, consider enlisting the guidance of a trusted and compassionate attorney who can answer your questions, address your concerns, and support you through each step of the process.
How Chapter 7 Bankruptcy Works
Individuals struggling with large amounts of debt can find relief by filing for Chapter 7 bankruptcy. Essentially, a Chapter 7 bankruptcy allows you to wipe away dischargeable unsecured debt, while retaining control of your protected property. When you file bankruptcy, you list everything that you own (house, car, household goods, bank accounts, etc.), and the law gives you exemptions to protect your property. Most Debtors do not have property that can not be protected with the exemptions provided. If you own property that is not protected, your attorney can provide you options so that you can keep the property. At the end of a Chapter 7 bankruptcy (about 3 months), your allowed debt will be discharged (wiped away), and you will immediately begin to rebuild your credit.
Actions to Avoid Before Filing for Chapter 7 Bankruptcy
As you explore your debt relief options, it is important to avoid taking specific actions that could undermine or weaken your bankruptcy filing. Below are a few strategies to help ensure your bankruptcy petition moves forward as smoothly and efficiently as possible.
Do Not Transfer Assets
Many people think that transferring their assets to a family member’s bank account will help them avoid having these funds used to pay off creditors. However, this action not only fails to protect your assets from the authority of the bankruptcy trustee, but the count may accuse you of committing bankruptcy fraud. Avoid moving your funds and assets around before filing, such as changing the title of a car to your spouse’s name, removing your name from a business venture, moving funds to an account belonging to someone else, or transferring the deed to real property without receiving fair market value for the land.
Refrain From Racking Up Additional Credit Card Debt
Some people assume that they might as well rack up additional credit card debt since they are already planning to file for bankruptcy. Unfortunately, a creditor can object to the discharge (you can’t wipe away the debt) if you make large purchases or spend money on luxury goods. It’s essential to show your creditors that you are taking the bankruptcy filing process seriously, so you will need to stop using any credit and only use your debit card for purchases.
Avoid Making Preferential Transfers
It may feel tempting to pay certain creditors in full before you file for bankruptcy. However, bankruptcy law prohibits what are called “preferential transfers,” so avoid making out-of-the-ordinary payments to your favorite creditors while withholding payments to other creditors. Do not repay any family or friends money before you file bankruptcy, as the bankruptcy trustee can sue the family/friend to get the money back.
Actions to Avoid After Filing for Chapter 7 Bankruptcy
Simply because you filed for Chapter 7 bankruptcy does not mean the process is over. Making mistakes during or after filing can complicate your bankruptcy case, so here are some tips for helping you move forward successfully.
Complete the Bankruptcy Education Requirements
Before receiving a bankruptcy discharge, you must complete a debtor education course and fulfill credit counseling requirements. For instance, the bankruptcy court usually requires a petitioner to take a credit counseling course from an approved agency and submit a completion certificate when filing for bankruptcy. After filing your bankruptcy petition, you need to complete a personal financial management course; if you fail to do so, the bankruptcy court will not issue your discharge. You can take both of these classes online.
Attend the Meeting of Creditors
After you file the bankruptcy petition with the Bankruptcy Court, you will be required to attend a hearing called the meeting of creditors. This usually occurs 30 to 40 days after filing your bankruptcy petition. At this hearing, the bankruptcy trustee and your creditors have the right to ask you questions under oath about your financial affairs and your bankruptcy petition. It is rare for creditors to appear at this hearing; it is typically just you, your attorney, and the bankruptcy trustee. The court can dismiss your bankruptcy case if you fail to attend this hearing.
Speak With a Caring Central New York & North Country Bankruptcy Lawyer Today
If you are struggling with seemingly insurmountable financial debt, you’re likely feeling overwhelmed and somewhat hopeless about the future. Before you assume that there is no way out of this situation, consider discussing your options with a trusted and compassionate bankruptcy attorney. Together, you and your attorney will discuss your concerns and identify the most strategic path forward that allows you to face a brighter and more stable financial future.