Summer break is approaching and you perhaps find yourself surrounded by neighbors, friends, students, and co-workers eagerly planning their trip to Hawaii, Asia, New York, or Europe. This summer there is the Olympic games in London, the start of the America’s Cup in San Francisco…
What are you doing this summer? Are you going anywhere or is money tight? Are you spending the summer worried about your financial situation, and wondering how many jobs you will need to work to pay off your debts. When there does not seem to be enough money for extras like a vacation, car maintenance, or a fun amusement park day your kids, it might make sense to review more closely your finances with a seasoned tax and bankruptcy attorney.
Is your debt overwhelming? Does your income barely pay your auto loan, credit card, or food expenses? Do you have to dig deeper into debt or go without something when there is not a coupon? Filing for Chapter 7 or Chapter 13 bankruptcy may be what you need to start over debt-free.
Many people do not file bankruptcy because they worry about losing all their belongings. Debtors do not lose all of their belongings after bankruptcy. Whether a debtor files under Chapter 7, 13, or another Bankruptcy Code chapter depends on the assets an individual has. When filing bankruptcy, a debtor will have to estimate the value of each property the person owns. For example, the person needs to see if the person has equity in a car or house.
To reach an accurate current market value for an asset, use the replacement or market value. For a car, the replacement value is how much a car of the same age and condition would cost at a dealer. Obtain this value by going to an auto dealer or the National Automobile Dealers Association web site.
Under Chapter 7, a debtor keeps an asset when the debtor has no equity or equity below the exemption amount. If a person is behind in payments for an asset that is collateral for a loan, a lender may repossess the asset prior to a bankruptcy filing. After a bankruptcy filing, the lender’s actions to repossess are automatically stayed, giving time to the debtor to decide whether to abandon or redeem/reaffirm the debt.
In Chapter 13 bankruptcy, a debtor’s payments for an asset that is collateral for a loan become part of the repayment plan. If a debtor is a defendant in a collections case, the case is stayed. If the debtor is a plaintiff in a lawsuit, the debtor needs to disclose this fact to the bankruptcy trustee. Depending on how large the anticipated money award for the debtor’s claim, the trustee may have the right to take all or part of it, unless the debtor exempts it.
Imagine life when you don’t have to spend your entire take home pay on your medical bills, car payments, or mortgage. Imagine life where you can save for your children’s college education or a vacation. Filing bankruptcy may give you a life where you don’t worry about money, are not scared to open the mail for fear of bills. If your finances concern you, it is time to speak to an experienced New York bankruptcy attorney.