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Long Island Bankruptcy Law Blog

What can Chapter 11 bankruptcy do for you?

As a New York resident who is simultaneously suffering from financial struggles while also having a high net worth, you may be wondering what options are available to you. In certain cases, your net worth may be so high that traditional or common bankruptcy options aren't available to you. Macco & Stern, LLP, are here to introduce Chapter 11 bankruptcy and what it can do instead.

These days, people who have high net worth aren't always financially sound. Despite your net worth, you may be struggling with business loans or personal guarantees. You may have bought a dream home that you're still making payments on, despite the fact that it now has significantly less market value than it did when you first purchased it. There are endless reasons as to why you could be considered a "high earner" or someone with high net worth despite struggling with money.

Is bankruptcy the only method of relieving debt?

Many people living in New York are struggling with debt just like you. Macco & Stern, LLP, are here to help if you're beginning to ask yourself if bankruptcy is the only way you could possibly dig yourself out of the financial struggle you've become embedded in.

Fortunately for you, debt relief comes in all forms. Bankruptcy is one of the most well-known ones, but the downsides can be vast. You could have to liquidate valuable items like your car or even house, or you could end up damaging your credit score and making it difficult to finance big purchases in the future.

How to recognize debt settlement scams

As a New York resident who feels as if you are drowning in increasingly overwhelming debt, you may be searching for a solution that could help you begin to rebuild your financial life. Regrettably, however, some types of companies tend to pray on people who, like yourself, are struggling to get by, and they may use less-than-ethical tactics to do so. At Macco & Stern, LLP, we understand that many debt settlement companies are out to make a buck, rather than help you get back on your feet, and we have assisted many people facing similar circumstances find alternative solutions that fit their needs.

According to the Federal Trade Commission, most debt settlement companies are for-profit organizations, so you might be wise to second-guess anything their representatives tell you about helping you out. It is also important to recognize that, while a debt settlement agency may tell you they can get rid of your debts for pennies on the dollar, your creditors have absolutely no obligation to agree to a debt settlement agency’s terms.

Budget-building tips to reduce credit card debt

If you’re faced with mountains of credit card debt in New York, creating a common-sense budget is the first step to safeguarding your finances. A budget will help you save money while also correcting poor spending habits that may have landed you in trouble in the first place. If you’re unsure how to proceed, the following information can help you get on the right track.

For instance, Forbes recommends focusing on specific areas of spending to make the biggest impact. Many people routinely overspend on entertainment, particularly when it comes to eating out or other expenses. In this case, it would be best to cut back entertainment spending and to redirect those funds into a savings account. You can identify problem areas by tracking your spending for about a month and go from there.

5 critical post-bankruptcy tips

Filing for bankruptcy is not the end. It is the beginning. It is the start of your new financial life. It can give you a clean slate. It allows you to reset your debt and move forward in life.

So, how do you do it? How do you make the most of this second chance? Here are a few key tips that can help:

Can you resolve debt without bankruptcy?

If you're a resident of New York who's been struggling with debt, you may wonder if there are any other options left for you outside of bankruptcy. There are, and Macco & Stern, LLP, Long Island bankruptcy attorneys, are here to help you find a solution.

Regardless of your current financial struggles, you can look into debt negotiation, workouts, and settlements. Some of the most popular methods of debt management that don't involve bankruptcy include:

  • Eliminating other mortgages based on your home's value
  • Settling unsecured debts for a portion of the debt itself
  • Negotiating new mortgage modifications

What you should know about medical debt

If you feel submerged under a pile of never ending medical bills, you are not alone. Millions of Americans feel as though they will never escape the burden of medical expenses. In a number of cases, these overwhelming medical bills lead to bankruptcy. A study performed by Kaiser Family Foundation found that one in every three people in the United States has trouble paying for their medical expenses. Approximately 21 million are continually paying off credit card debt associated with medical expenses and another 28 million have run out of money in their banking accounts while making payments. In fact, 62 percent of people who file for bankruptcy in the nation indicate medical debt as the reason for their filing and financial demise.

Costly medical care is just one factor blamed for this high rate of medical bankruptcy. People struggle to pay their monthly premiums to have insurance coverage and are still forced to pay for deductibles and copays for their medical care. Furthermore, the cost of medical injuries and conditions vary significantly depending on what medical institution you go to, as well as what part of the country you live in. Simple injuries, such as a sprained ankle, can generate healthcare costs that vary between a hundred dollars and $24,000.

Tips for negotiating with creditors

New York residents who are looking to get out of debt have several options available to them. One possibility is to negotiate with creditors directly in order to get a repayment or settlement plan that is tailored to fit their current situation.

The Consumer Financial Protection Bureau takes a look at one way to negotiate a settlement with a debt collector. They suggest a three-step process. It involves first learning about the debt in question. Then, the consumer will create a plan for a settlement or repayment proposal based on the knowledge gained through their debt research. It is important for this plan to be realistic, since the success of a negotiation will likely hinge on that. Finally, the proposal should be taken to a creditor for approval.

Primary factors that contribute to credit card debt

Most New York residents have at least one credit card. After all, these convenient cards can be used almost anywhere in the U.S. and are an easy, simple way of paying for things instead of carrying around loads of cash or having to write out checks. But because of their frequent and sometimes improper use, many people suffer from credit card debt as well. Here are some contributing factors.

NBC News takes a look at what happens whenever a person misses their credit card payments. This, along with paying only the minimum and accruing interest charges, are two of the bigger reasons as to why people go into debt. Penalty payments can be incited against people who miss the 30 day payment deadline. This can vary from card to card, but is usually $27. Then, there is "penalty APR", which is often triggered if a person's payment is over 60 days late.  These rates can shoot up to almost 30 percent. It can take as much as six months for an account to be reviewed to determine if the APR rate should be lowered.

How long after a bankruptcy before you can secure a mortgage?

One of the reasons that people often put off seeking the protections of bankruptcy is concern for their future financial situation. Many people believe that they will not be able to rebuild their credit for a long time after bankruptcy.

While it is true that filing bankruptcy will show up on your credit report for some time, failing to file bankruptcy could have a longer-lasting and more serious impact on your financial health. Many delayed or unpaid debts, as well as judgements, on your credit report will look much worse than a single entry from bankruptcy followed by on-time payments.

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