If you are wondering when you should file a Chapter 7 bankruptcy in Staten Island, you are taking the right steps to get out of debt. One of my favorite quotes is from the book the Financially Independent Millennial (if you have time, you should read a copy). The author of the book filed Chapter 7 bankruptcy and was able to get a fresh start immediately. Today, he is an extremely successful businessman that helps people become financially savvy. In the book, he writes:
“I learned a few things about being broke. Being broke is expensive! Everything costs more. You pay higher fees for poor credit, so borrowing is difficult (because banks are notorious for lending when you need it.) and when you can borrow, it’s costly. When you’re broke, you don’t have a surplus, and so you’re not saving money. It also means you’re making minimum payments and not paying down any principal, so you owe more each month. The leans never go down.”
If you are over your head in debt, many of you can probably relate to this. Individuals who continue to make minimum payments towards their outstanding credit card debt and don’t see their balances going down should consider a Chapter 7 bankruptcy as an option.
When you are in debt, it can take an emotional and physical toll on you. Many individuals who are in debt think of filing bankruptcy as a last resort. This, however, should not always be the case. Often, we see individuals who sign up for debt settlement plans to avoid filing bankruptcy, who should not be in them. This usually ends up costing people more money and more time. A Chapter 7 bankruptcy can wipe out your debt immediately and allow you to start over. Individuals who enter into debt settlement programs to avoid filing a Chapter 7 bankruptcy, often end up in a worse financial situation. In a debt settlement program, individuals run the risk of having creditors file lawsuits against them which ultimately leads them to file a Chapter 7 bankruptcy.
What is Bankruptcy?
Bankruptcy is a petition you file in federal court that lists all of your debts and assets and asks the courts to relieve you of your debt.
What is Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy, is where the court grants you a discharge of your debts. In a Chapter 7 bankruptcy, you get a clean slate and can start over fresh. When an individual files Chapter 7 bankruptcy, their debts are eliminated thus, creditors can no longer collect the debts.
What Debts Can Be Discharged in a Chapter 7 Bankruptcy?
Many people think that all debts can be discharged in a Chapter 7 bankruptcy. This, however, is not true. In Chapter 7 bankruptcy most unsecured debts like medical bills, credit cards, and personal loans can be discharged. Some debts that can’t be discharged in a Chapter 7 bankruptcy are:
- Traffic Tickets
- Government Fines
- EZ-Pass Violations
- Some tax debts
- Student loan debt
Further, most unsecured debts can’t be discharged in bankruptcy. Debts like mortgage loans and car loans can’t be discharged unless you plan to give up the property secured by the loan.
How Can Filing Chapter 7 Bankruptcy Help Me?
Chapter 7 bankruptcy is the quickest and easiest bankruptcy. The greatest benefit of filing a Chapter 7 bankruptcy case is that it erases most debt. If you file a Chapter 7 bankruptcy, you’ll receive a discharge giving you the fresh start you need.
As soon as you file your Chapter 7 case an automatic stay is initiated. The Automatic Stay prevents creditors from pursuing you. This means that all collection actions must stop. Thus, if creditors have been garnishing your wages, they can no longer do so. Additionally, lenders foreclosing on your home must cease any foreclosure actions and if you are behind on rent, your landlord can’t file an eviction action against you.
Further, if your utilities have been shut off because you haven’t timely payments on your bills or your license has been suspended due to failure to pay your debts a Chapter 7 bankruptcy filing can help you.
Filing Chapter 7 Bankruptcy Can Help Your Credit Score
Individuals often assume that filing bankruptcy will prevent them from getting credit in the future. No, filing bankruptcy will not ruin your credit forever. Although, a bankruptcy filing stays on your credit report for 7-10 years the majority of people who file bankruptcy have great credit within two years of filing. Bankruptcy paves the way for you to increase your credit score. Most credit reporting agencies calculate a credit score based on debt to income ratio. With no debt, many people see their credit scores increase after filing.
Should I file a Chapter 7 Bankruptcy in Staten Island?
If you are thinking about filing bankruptcy, then you should speak with a Chapter 7 bankruptcy attorney in Staten Island. However, if you want to do some preliminary work on your own you should consider asking yourself these questions:
- Do I have over $9,000 of debt?
- Am I falling behind on my payments each month?
- Am I unable to afford my living expenses?
- Am I being garnished?
- Are creditors suing me?
- Do I have debt collectors calling me?
- Am I facing repossession, foreclosure, or bank levy?
- Are my debts getting higher each month?
If you have answered “yes” to these questions it is probably a good time to start thinking about filing bankruptcy.
When to Think about Filing Bankruptcy
Deciding when to file bankruptcy is critical to ensuring that you can file a Chapter 7 bankruptcy. Unfortunately, not everyone can qualify for a Chapter 7 bankruptcy. To qualify, individuals must pass a means test. The Chapter 7 means test, takes into account an individual’s last six months of income and compares it to New York’s household median income. If the person is below the median income, they qualify. If not, they must move on to the second part of the means test which looks at an individual’s income and expenses. If they qualify after moving to the second part, they qualify for a Chapter 7 bankruptcy. If not, they must file a Chapter 13 bankruptcy.
Individuals who make more during certain months must consider when to file bankruptcy. It is important to speak with a bankruptcy lawyer in Staten Island as soon as possible to ensure that you qualify under the New York Means Test.
Why Should I speak with a Staten Island Chapter 7 Bankruptcy Lawyer?
Many people are unaware that there are certain types of activities that can prevent people from qualifying for Chapter 7 bankruptcy. Some things that may disqualify you from a Chapter 7 bankruptcy or complicate the process are:
- Using your credit cards right before filing
- Transferring property out of your name
- Paying back friends or relatives for money they have loaned you
- Suing someone or planning to sue someone where you may be able to collect money
If you have found yourself in any of these situations it is best to speak with a bankruptcy lawyer as soon as possible to help you navigate whether you can file a Chapter 7 bankruptcy.
Conclusion
Whether you should file a Chapter 7 bankruptcy depends on timing, your financial situation, and whether you qualify. Filing for bankruptcy can be stressful and ensuring that you have the proper counsel to represent you is important. A bankruptcy attorney can help you understand the impacts of bankruptcy and how it can positively impact your financial situation.
Speaking with a Staten Island Chapter 7 bankruptcy lawyer is free and can help you clarify what debt-relief option is best for your situation. If you are thinking about filing Chapter 7 bankruptcy in Staten Island give our law firm a call today. Karra L. Kingston Esq. has helped many people in Staten Island, New York, and New Jersey file bankruptcy and get a fresh start.