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Long Island Bankruptcy Law Blog

What are the risks of non-lawyer debt negotiators?

New Yorkers will undoubtedly be aware of the number of debt settlement companies who advertise and say they can help people facing financial challenges to get a fresh start. While this is a tempting proposition, there are certain dangers with getting involved with these companies and not using a qualified lawyer who can assess all the alternatives, give the positives and negatives of consumer bankruptcy vs. debt settlement and help with all aspects after a decision has been made.

Debt settlement companies might have the ability to assist with some debts, but the initial phase of the program generally requires the debtor to place money in a savings account for three years or more prior to the debts being settled. Making the payments can be difficult and those who cannot do so frequently leave the program before clearing the debts. A budgetary review is vital to making an informed decision as to whether it will be possible to stay in the program for its duration.

Legal assistance for Long Islanders dealing with medical debt

Long Islanders who find themselves deep in debt are not necessarily in that position because of job loss or due to spending beyond their means. One of the most common reasons for filing for bankruptcy to have a financial fresh start is through medical debt. Medical expenses can arise for a multitude of reasons and those who are dealing with it must be aware that they have options to move on with their lives.

People can accrue medical debt through an unexpected illness, an injury, a sick child or by simply losing a job and losing health insurance that they previously had. Out of pocket costs can lead to massive medical bills in short order. One of the biggest moneymakers for collection companies is pursuing people who have vast amounts of medical bills that they have not paid and likely cannot pay. While filing for bankruptcy or seeking another method to overcome these financial challenges is often perceived as a negative, it is a sound strategy to get back on stronger financial ground and get a fresh start.

When will my debts be discharged after filing for bankruptcy?

Long Islanders who are having financial challenges and have sought relief through filing for bankruptcy might not be fully cognizant of certain basic factors. These are important to understand as the process moves forward. One question that might be foremost in the debtor's mind is when the discharge of debts will take place. Knowing the answer to this foundational question can help the debtor prepare for the future.

There is no ironclad time at which the discharge will be given. It depends on the chapter under which bankruptcy has been filed. For a Chapter 7 bankruptcy, the court will generally grant the discharge when the time frame for a complaint by the creditors can be filed has expired. Creditors sometimes have a reason to object. Once this time has passed, then the discharge can be granted. This is 60 days after the first date of the meeting of 341 creditors. The discharge will happen approximately four months after the date of the debtor filing the petition.

Former MLB player files for Chapter 13 bankruptcy

Financial challenges can happen to anyone in New York and across the country. Even those who seemingly had it all with major paychecks, fame and a prominent lifestyle are vulnerable to financial realities and must consider alternatives such as filing for bankruptcy if they are no longer able to make their payments and the debt turns into an endless cycle. For any debtor who has reached the point where it is necessary to find a way to get back on stronger financial ground, it is wise to consider bankruptcy.

The former Major League Baseball pitcher Livan Hernandez has filed for Chapter 13 bankruptcy. After defecting from Cuba to the U.S., Mr. Hernandez played 17 seasons in the majors and earned slightly more than $53 million in contracts during his playing career. The case was filed in Florida. It is early in the process, but he claims to owe up to $1 million and has up to 50 creditors. According to the filing, many of his debts are consumer-based to various businesses and credit card companies. He also owes a local businessman $220,000 that was said to be a loan and was never repaid.

Financial challenges and disclosures debt collectors must make

Long Islanders who are facing financial challenges and might be dealing with delinquent payments on their credit cards will have a lot to consider as they seek out options. While they are in the process of straightening out their finances, a frequent concern is that there will be a series of phone calls, letters and emails trying to collect on the debt. After a certain period, many companies will sell the debt to a third party. That third party will then try to collect the debt. There are certain laws that these collectors must follow. Unfortunately, some flout these laws or push them to the brink and end up committing creditor harassment. Understanding what disclosures these collectors are required to provide is essential for the debtor to avoid being harassed.

After the initial communication with the consumer, within the next five days, a debt collector must inform the consumer the that the debt collector is adhering to the Fair Debt Collection Practices Act (FDCPA) and are not allowed to behave abusively, deceptively or engage in certain behaviors. The collector cannot: threaten the debtor with violence; use obscenities or profanity; or continually make phone calls with the intention of annoying, abusing or harassing.

An overview of how Chapter 7 bankruptcy works

Even though the national economy has rebounded nicely in the last few years and the stock market is regularly reaching all-time highs, the unfortunate reality is that there are still millions of Americans who are facing difficult financial challenges every day. For some, the most pressing concern is overwhelming debt. That is where Chapter 7 bankruptcy could help.

Chapter 7 bankruptcy is intended to be a tool for consumers to use to discharge debt, face their financial challenges and get a fresh start. However, New York residents who are interested in pursuing this tool must first determine if they are eligible. There are certain restrictions on who can file for Chapter 7 bankruptcy. For instance, a person who has filed for bankruptcy recently is not eligible to file again. Debtors are also required to attend credit counseling prior to filing for bankruptcy.

Achieving debt relief through non-bankruptcy remedies

When it comes to addressing overwhelming debt, most New York residents will likely examine all possible options. The first steps might include establishing a strict household budget and sticking to it, while paying as much on the debt as possible each month in an effort to bring the balance down. If that doesn't make a dent in the debt balance, some people may try other options, like reaching out to creditors to explain the circumstances of a temporary hardship, hoping to structure some kind of relief from payments or interest charges.

And, for those who may be facing foreclosure as it becomes harder to make the monthly mortgage payment, one option might be to attempt to modify the terms of the mortgage. Even as the housing market in America improves and more consumers are looking into buying their first houses, creditors still have a pretty powerful incentive to keep mortgagees in their homes, where they will continue taking care of the property and paying back the debt owed, even if on modified terms.

Are balance transfers a good way to address credit card debt?

There are millions of Americans who are dealing with credit card debt. While some of these individuals and families may just focus on paying the minimum monthly payment, there are many who are doing their best to address this debt issue and find healthy financial solutions. For some, part of the solution might be to transfer the balance of one credit card with a high interest rate to another credit card with a lower interest rate. This is known as a "balance transfer."

But, are balance transfers a good way to address credit card debt? Well, a recent article noted that while, in general, balance transfers can be a useful way to pay down credit card debt, there are some important factors to consider. Most importantly, if your plan involves opening up a new credit card, that will result in what is known as a "hard inquiry" on your credit, which will reduce your credit score by a few points in the short term.

Bankruptcies come off credit reports after a number of years

Many of our readers in New York know that during the so-called "Great Recession" one of the biggest issues was the when the housing "bubble" burst. As the economy started to crumble at the end of 2007 and into 2008, Americans saw billions in investment holdings disappear. But, it wasn't until the value of homes started to crater soon after, that individuals and families in New York and throughout the country really began to feel the most serious impact of the recession. For millions of people, that meant filing for bankruptcy.

But, now that it is 2017, many of those people who filed for bankruptcy several years ago will finally begin to see those filings disappear from their credit reports. Many of our readers may know that the "black mark" of a bankruptcy stays with the filer for several years, but one of the benefits of filing for bankruptcy is that this financial red flag doesn't last forever.

Filing for bankruptcy to stop foreclosure

Our readers may be familiar with many of the advantages that New York residents will benefit from in the bankruptcy process. Many different types of debt can be addressed, and the financial challenges of unexpected life changes that impact finances can be resolved. However, for some people, there is one main goal when filing for bankruptcy: stop foreclosure.

Under bankruptcy law, an "automatic stay" goes into effect upon the initiation of a bankruptcy action. This stay prevents all collection efforts by creditors and lenders, and that includes mortgage lenders. So, not only will you stop receiving those annoying calls and letters from credit card companies trying to collect unpaid debt, but your mortgage company's foreclosure action will be temporarily halted as well. The stay remains in effect as long as the bankruptcy action is pending.

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