Personal Bankruptcy

Bankruptcy Lawyers in Syracuse NY

Digging Your Way Out of a Financial Rut

Everyone deserves a second chance. Fortunately, Bankruptcy law allows people to start over by wiping away most if not all of their debts. Bankruptcy has many advantages for the struggling debtor; it can be a relatively quick and easy way to end creditor harassment, and the hardship, anxiety and marital stress associated with burdensome debt. If you are overloaded with debt and harassed by creditors, filing for Bankruptcy may be an excellent option for you.

What Bankruptcy Can Do For You

    1. Automatic Stay – Stopping Creditors Dead in Their Tracks
      As soon as you file your Bankruptcy case, a court order is created that prevents almost any creditor from attempting to collect or enforce any debt that you owe. This means that wage garnishments must stop immediately, phone calls from collection agencies must stop immediately, letters and bills from creditors must stop immediately, utility shut-offs must stop immediately, foreclosures must stop immediately, sheriff executions must stop immediately. Suddenly, you have peace and quiet, and a breathing spell to reconfigure your finances.
    1. Retention of Property – Keeping What is Yours
      The Bankruptcy law offers the individual debtor a very generous array of exemptions. Property that is exempt is not taken from you or given to your creditors. For many people, the amount of the exemptions available to them is greater than the value of all their property; in those cases, Bankruptcy will not result in the loss of any property.Bankruptcy cannot take away the mortgage on your house or the lien on your car (see below).However, if you want to keep your house or your car, even if you have fallen behind on your payments, the Bankruptcy law provides ways for you to do just that. In fact, where cars are concerned, the Bankruptcy law provides ways for you to keep your vehicle but pay less than you actually owe for it!
  1. Discharge – The Fresh Start
    The most important benefit of Bankruptcy is getting a discharge. The discharge eliminates any personal obligation you have to pay any of your debts. No one can make you pay your pre-filing debts and no one can even ask you to pay them. The discharge is permanent; it enables you to start over again financially with a clean slate.

What Bankruptcy Can Not Do For You

Filing Bankruptcy can change a person’s life in many positive respects. However, there are some problems that not even Bankruptcy can fix. Here are the most important examples:

    1. “Nondischargeable” Debts
    2. There are some types of debts that cannot be discharged in a Bankruptcy case. Here are some major examples of debts that cannot be discharged:
      • student loans
      • child support and alimony
      • most kinds of taxes
      • theft and fraud, and
      • drunk driving.

      However, it is possible to use Bankruptcy, particularly Chapter 13 (see below), to control aggressive behavior by creditors holding nondischargeable claims, so that you can recover some stability and peace in your life.

  1. Mortgages and Car Liens
    Bankruptcy cannot take away the mortgage on your house or the lien on your car. If your house has a mortgage, or if your car has a lien, you are going to have to pay the debts they secure or else the bank or finance company which holds the mortgage or car lien will be able to foreclose it, the same as if you had never filed Bankruptcy.However, the Bankruptcy law does provide ways for you to keep property that is subject to a mortgage or lien, even if you have fallen behind on your payments.If a creditor has sued you and entered a judgment against you, that judgment is a lien on your house; you will not be able to sell your house unless the judgment would be paid in full. However, under the Bankruptcy law it is possible for you to remove that judgment lien from your house, the same as if the judgment never had been filed.In some instances the Bankruptcy law provides ways for you to keep your car or other vehicle but pay less than you actually owe for it!On the other hand, you might decide that you do not want to continue making payments on your car. Once you are armed with a Bankruptcy discharge then even if your car is repossessed the lender can never sue you for any deficiency amount left over after the lender sells it.

How Do I File Bankruptcy and What Happens When I Do?

First of all, you need a good lawyer! But you have come to the right place. Melvin & Melvin has been representing clients in Bankruptcy cases since 1920. We are among the most experienced and skilled Bankruptcy lawyers in Upstate New York. We will get you through it.

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Chapter 7 or Chapter 13?
There are two major roads through personal Bankruptcy, which are called Chapter 7 and Chapter 13; you will have to choose one of them.  For both of these alternatives there is a substantial amount of paperwork that is required to be done.

    • You will need to know the names and addresses of anyone and everyone to whom you might owe any money, and you will have to be able to identify everything you own.
    • You will have to answer in writing, and under oath, numerous questions about your financial position and your financial history.
    • Before you file your case, and again after you file your case, you will have to take on-line classes teaching you about financial stability and responsibility.
  • You will have to appear at the courthouse and answer questions about your assets and liabilities from a court-appointed trustee, and from any of your creditors who choose to attend.

We will guide you through each step in this process; we will help you choose between Chapter 7 and Chapter 13, we will help you complete all the paperwork, and we will sit next to you at your meeting with the trustee. We will not let you down.

After your meeting with the trustee, Chapter 7 and Chapter 13 diverge.

If you are on the Chapter 7 road
You are almost all done.  If you have any non-exempt property, it will have to be turned over to the trustee; if you are still making payments on your house or car you probably will have to sign a reaffirmation  agreement. But apart from those exceptions, you probably will need to do nothing more than go home and wait for your discharge papers to be sent to you a few weeks later.

If you are on the Chapter 13 road,
Then beginning within a month after you file your case you will have to begin sending payments to your trustee. But the amount of your payments will depend primarily on what you can afford to pay, not on the amount of money you owe. Those monthly payments will have to continue for a period of between three to five years (36 months to 60 months). The money that you send to the trustee will be paid by him to your creditors on a proportionate basis.

You are probably wondering why anyone would choose Chapter 13 instead of Chapter 7. In many instances, Chapter 7 is not available because of the amount of money a person makes on an annual basis.

For instance, in New York State, the “median income” of a family consisting of a married couple and two children is $81,522.00, where only one adult is working. If the income of that working person is, for example, $85,000.00, and if his or her debts are primarily of a consumer nature (rather than from a business), then he or she is over the “median income” level and the Bankruptcy law will require him or her to file under Chapter 13 unless a very good reason can be shown.

There are certain types of relief that are available under Chapter 13 that are not available under Chapter 7.

    • Perhaps the most important example is what happens if you have gotten behind in making payments on your home mortgage. Even if your lender has started a foreclosure — even if the foreclosure sale is next week!! –in Chapter 13 you can resume making regular payments on your mortgage, and begin paying down the installments that you missed – and your lender must stop the foreclosure and cooperate with you, it cannot say no!!
    • The same mechanism is available to you under Chapter 13 if you have fallen behind in the payment of your real property taxes
    • Automobiles and trucks depreciate rapidly; many people own vehicles that are worth a lot less than the amount of money that they still owe on them. In Chapter 13, in many instances the amount that you owe your lender could be reduced to the amount that is the value of your vehicle – and when that reduced amount is paid the lender must issue a lien release to you. The same thing can be done in Chapter 7, but in Chapter 7 the entire amount of the reduced debt must be paid immediately, while in Chapter 13 the reduced amount can be paid over the course of five years.
  • If you operate a business in your own name, rather than as a corporation or limited liability company (“LLC”), you can still operate that business after you file under Chapter 13. If you file under Chapter 7, your business would have to be discontinued.

How Much will it Cost Me to File Bankruptcy?

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Your initial interview with Syracuse bankruptcy lawyers in our office will be done as a courtesy; there will be no charge for coming in and discussing with us whether filing Bankruptcy would be a good option for you to take.

The fee that our office would charge you as payment for our services in helping you file either a Chapter 7 case or a Chapter 13 case will depend on the complexity of your situation. But unless your case is unusually complicated, our fee would be a flat rate, one lump-sum amount covering all of our work.

In addition to the fee of our office, the Bankruptcy Court will require the payment of a filing fee. The filing fee for a Chapter 7 case is $306.00. The filing fee for a Chapter 13 case is $281.00. Depending on what actions are required after your case is filed it is possible that additional fees would be required, but usually not more than $50.00 in total.

For a case under either Chapter 7 or Chapter 13, you would have to deliver to us the amount of the filing fee before your case is filed.

For a case under Chapter 7 you would have to pay us the entire amount of the fee of our office before we filed the case. For a Chapter 13 case, we would ask you to pay as much of our fee as you could before the case is filed, but a substantial portion of our fee could be paid from the money that the trustee will distribute to your creditors.

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Will Bankruptcy Hurt My Credit Score or Rating?

Some creditors will actually consider you a better risk after Bankruptcy than someone who did not file Bankruptcy, because

    • Your discharge frees you from old debts, improving your ability to pay new debts
    • You can’t get another discharge for several years.

Your Bankruptcy could appear on your credit report for up to ten years. It may be more difficult for you to obtain new credit as long as your credit report shows your Bankruptcy filing.

However, being “credit worthy” is like “beauty”, it is in the eye of the beholder. Some lenders and merchants will be less reluctant than others to extend new credit to you. In fact, from the point of view of many creditors, after you file Bankruptcy, you are a better risk for a new loan than someone who did not file Bankruptcy. This is because your discharge relieves you from the responsibility of paying old debts, which will improve your ability to pay new debts, and after receiving a discharge you will have to wait several years before obtaining another one. Department stores and gasoline companies are often the first lenders and merchants who extend new credit to people who have filed Bankruptcy. As you incur and repay new debt, you will build a new, and more favorable, credit history.

On the other hand, many people file Bankruptcy because they have abused – or through no fault of their own have overused – their available credit in the past. The most common reason people file Bankruptcy is because they owe large amounts of money on their credit cards and charge accounts. Like many things, credit is often best used sparingly, or in moderation. Many people decide to discontinue entirely their use of credit cards and charge accounts after they file Bankruptcy.

How Do I Get Started?

Call us today and set up an appointment. Melvin & Melvin has the Syracuse bankruptcy attorney who can help you by answering questions and addressing your concerns. If your work schedule prevents you from meeting with us during regular business hours, we will be happy to schedule time for you after 5p.m. or on a weekend. If you have any questions or concerns, feel free to email us at [email protected] or call at (315) 422-1311.