You must learn more about bankruptcy law in New York. In most instances when you file for bankruptcy in New York is not different from how you file it in other states. The process of bankruptcy is under federal law and not New York state law, and it does work by unwinding the contracts that you have between yourself and the creditors and it is what gives you a fresh start.
But there is a significant way in which the New York laws come in hand. They are known to determine the property which you can be able to keep in your case of bankruptcy. You will also require to know the other information for filing.
Choosing the correct bankruptcy chapter in New York
The majority of people do file either chapter 7 or 13. If you are not aware of the difference that exists between the two, you should relax as many don’t also know. The following is a short explanation of chapter 7 and chapter 13 to help you understand:
Chapter 7 bankruptcy
For several reasons, Chapter 7 is normally the first choice for bankruptcy filer. It is first as it takes only a few months to be completed. And it is seen to be cheap as you will not pay anything to creditors. It works quite well for those who have the property that consists of important items that are required to work and live.
Some people have more assets that could end up losing them, especially if they are several unnecessary luxury items. Like you could have to give up your RV, timeshare in the Bahamas, or baseball card collection – even your vehicle or house if you have a lot of equity that is in it or you happen to be behind with your payments.
Unlike chapter 13, chapter 7 does not have a plan for payment option to catch up on the car or mortgage payments that are done late. And thus, chances are that you might lose your car or home in case you file late.
Chapter 13 bankruptcy
In contrast, chapter 13 filers have to pay the creditor all or some of what they own using the repayment plan of 3 years to five years. But the payment plan will allow chapter 13 to give benefits that aren’t in chapter 7. An example is, apart from having to keep your property, you will be able to save on your home foreclosure or your car being repossessed.
If you require time to repay the debt that you cannot discharge in bankruptcy, you can utilize this particular chapter in forcing a creditor to agree on a payment plan. The downside of this plan is that it can be damn expensive. Most people are unable to afford the monthly payment.
As someone in business, you need to ensure that you learn more about the pros and cons of small business bankruptcies to be safe. The above principle applies to consumers only.