If the challenges of the last few years have left you struggling with overwhelming debt, you are not alone. Individuals, families, and businesses across the country continue to face extraordinary financial hardship, compelling them to explore their debt relief options. If you are beginning to explore the bankruptcy process in New York, it is natural to feel intimidated or even embarrassed about taking this step. However, filing for Chapter 13 bankruptcy is nothing to feel ashamed about—it can give you the relief and stability you need to obtain the fresh financial start you need. Here are a few things to think about before you begin the Chapter 13 filing process in New York.
How Chapter 13 Bankruptcy Works in New York
Chapter 13 bankruptcy, also called “wage earner” bankruptcy, allows those with a steady income to pay back a percent of their debt over a 3 to 5 year period. During this repayment period, your creditors cannot harass you or attempt to collect the debts included in your repayment plan. One significant advantage to Chapter 13 bankruptcy is that you keep your property while you catch up on mortgage and car payments, among other debts. At the end of the repayment period, any remaining dischargeable debt is wiped away.
Advantages of Chapter 13 Bankruptcy
There are circumstances in which filing for Chapter 13 bankruptcy relief could be your best option. For instance, if you have a steady stream of income but struggle with unsecured debts, the repayment plan allows you to remain in your home while you slowly repay a percent of the debt you owe. For those who exceed the income threshold for qualifying for Chapter 7 bankruptcy relief, Chapter 13 offers protection from creditors and gives you the opportunity to pay off a percent of your debt (the remaining dischargeable debt will get wiped away at the end of the bankruptcy). Additionally, if you have significant assets (i.e., home equity) that you do not want to lose in a foreclosure, repossession, or liquidation, Chapter 13 may serve you best.
Moving Forward With Confidence
The eligibility criteria for Chapter 13 bankruptcy relief tend to be fairly strict, so make sure you enlist the support of a trusted and compassionate bankruptcy attorney to help you understand your options. The thought of filing for bankruptcy can be overwhelming and intimidating, but you do not have to go through this process alone. Your attorney will answer your questions, address your concerns, and help you take the necessary steps towards a brighter financial future.