If you are concerned about your financial situation, you are far from alone. With inflation on the rise and the impact of holiday spending settling in, it’s natural to feel overwhelmed by mounting credit card debt, past-due rent, and other outstanding debts. Unfortunately, many people with financial concerns feel ashamed about their situation, which prevents them from exploring their debt-relief options. Working with a trusted and compassionate New York bankruptcy attorney is the best way to understand your choices for eliminating these oppressive debts and regaining control of your financial situation. Your attorney can help you determine whether Chapter 7 or Chapter 13 bankruptcy is best suited for you and support you through each step of the filing process. While the prospect of filing a Chapter 13 bankruptcy may feel intimidating and overwhelming, there are several steps you can take to prepare yourself for what lies ahead. Below are a few steps to help you move forward with greater clarity, confidence, and hope.
Understanding How Chapter 13 Bankruptcy Works in New York
First, it’s important to understand how Chapter 13 bankruptcy works. Also called a “wage earner’s plan,” Chapter 13 bankruptcy allows those with a steady income to establish a repayment plan to address outstanding debts. When you file for Chapter 13 bankruptcy, the court will appoint a trustee to oversee your case and collect the monthly payments to distribute among your creditors during the three- to five-year repayment period. Chapter 13 bankruptcy works best for those whose assets or income exceed the threshold for pursuing a Chapter 7 bankruptcy request. One of the core benefits of Chapter 13 bankruptcy is the petitioner’s ability to save their home from foreclosure while they catch up on missed mortgage payments. It affords the petitioner some much-needed breathing room to pay back their debts and regain control of their finances. Additionally, filing for Chapter 13 bankruptcy triggers an “automatic stay” that stops most collection actions against the debtor. At the conclusion of the repayment period, the court will evaluate the case and issue a discharge of the remaining debts (the remaining unsecured debt is wiped away). However, it’s important to recognize that certain debts, such as alimony or child support obligations, some taxes, and student loans, cannot be discharged.
Preparing to File a Chapter 13 Bankruptcy Petition
Many people struggling with debt experience a sense of paralysis or hopelessness that prevents them from taking steps to regain control of their finances. Sometimes, the hardest part of the bankruptcy process is motivating yourself to get started. It can be hard to know where to begin, and you may become so overwhelmed by the prospect of pursuing a bankruptcy request that you abandon this idea and tell yourself you’ll look into it again later. Meanwhile, debt keeps piling up, making it even harder to get and stay motivated to take action. Fortunately, there are concrete steps you can take right now to set yourself up for success.
Discuss Your Options With a Trusted New York Lawyer
Although it’s possible to navigate the bankruptcy process without legal representation, enlisting the guidance of a trusted and experienced New York bankruptcy attorney is highly recommended. Your attorney can assist you with the logistical elements of filing a bankruptcy petition and help you understand what to expect during each stage of the process. Perhaps more importantly, working with an attorney can provide you with the care and support you need during this vulnerable time. Your attorney is not here to judge you or blame you for amassing debt; instead, they are there to provide you with the compassion and guidance you need to feel hopeful about the future once again. Enlisting the support of a knowledgeable New York lawyer is the best way to ensure that the process moves forward smoothly and successfully, allowing you to move forward with greater optimism and confidence.
Assemble the Necessary Paperwork
It’s no secret that bankruptcy involves a considerable amount of paperwork. As you work with your attorney to prepare for a Chapter 13 bankruptcy filing, start to gather and assemble important documents, including credit card bills, vehicle titles, tax returns, pay stubs, retirement account information, and other relevant paperwork. Work with your attorney to determine the full scope of documents you need to gather and prepare. Taking this step before you file ensures that you approach the process feeling more prepared and organized to navigate what lies ahead.
Take Pride in Being Proactive
Taking some time to acknowledge your willingness to regain control of your finances allows you to feel more secure and confident in your actions. It’s natural to feel intimidated by the bankruptcy filing process, but you can transform these feelings of anxiety into feelings of accomplishment by recognizing your effort to get and stay motivated. In many cases, shifting your mindset from one of intimidation to one of momentum can set you up for greater success as you move forward with the process.