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.
When New York residents face financial challenges, they also face difficult questions. They may explore all of the possible options, but, in many cases, the only reasonable option might be filing for bankruptcy. So, how do New York residents make the decision on whether or not they should file for Chapter 7 bankruptcy?
The economic downturn of 2008 hit many Long Islanders and other New York residents hard. The economic slowdown affected the ability of businesses to hire more staff, leading to higher unemployment. This, in turn, led to people having less money to spend, which continued to result in lower business earnings.
When a person in Long Island files for Chapter 7 bankruptcy, his or her property will be collected and then sold off to pay back his or her debts. This process is known as "liquidation."
As some Long Island residents may already know, a Chapter 7 bankruptcy filing can be the financial lifeline they need to climb out from under an insurmountable amount of debt. This is particularly true if the debtor has unsecured debt that is not associated with collateral, such as credit card debt or medical debt, which will be paid off via liquidation. However, what Long Island residents may not know is that even if they go through the Chapter 7 bankruptcy process, they may choose to "reaffirm" a debt if they wish to keep a piece of secured property, for example, a motor vehicle.
Perhaps it is credit card debt combined with high interest rates that has become unmanageable. Or, perhaps, a major illness has resulted in ever-mounting medical bills. Or, maybe a job loss has made it impossible to pay your mortgage or utility bills. No matter how you got into debt, when it becomes utterly overwhelming, it may seem as if there is no way out.
The decision to file bankruptcy is a big one. However, before even filing a debtor in Long Island will need to decide is whether to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Today we are going to examine some reasons why a debtor might decide that filing for Chapter 7 bankruptcy is right for them.
Facing overwhelming debt can take over every aspect of an individual's life. The stress of constant calls from creditors, threats of repossession, the possibility of foreclosure, and simply being unable to meet one's monthly living expenses may make debtors in Long Island wonder if they have any means of debt relief. For those who are struggling with overwhelming debt, one form of debt relief they may want to consider is Chapter 7 bankruptcy.
In a post a couple of months ago we discussed how Long Island area debtors who want to file for bankruptcy must complete a credit counseling course prior to filing, and must complete a debtor education course before their debts will be discharged. This week we will go into the specifics of each of these requirements and discuss what will be covered in each type of course.
Last week this blog discussed the extremely narrow circumstances in which a debtor in Long Island could seek to have his or her student loans discharged through bankruptcy. Today we are going to look at tax debt. Can tax debt ever be discharged through Chapter 7 bankruptcy?