Chapter 7 Bankruptcy Lawyers in Astoria Helping Clients Find Relief from Debt

In America, we speak so much about ‘personal responsibility’ and the idea of working hard in order to achieve all that we want in life as if a dedicated work ethic is all it really takes to get ahead in life. But people who land themselves in debt know that’s not true. Unfortunately, there’s not a lot of sympathy for people in debt, as many outsiders prefer thinking maybe some careless money spending landed debtors in their difficult situations.

But oftentimes, people land in debt because they get hurt and are left with absurd medical bills or maybe they can’t afford rent and student loans. Because living in modern America is expensive. It costs a lot just to tread water in New York City. So, if you get behind on what you owe and land in debt, there can be a tendency to stay that way no matter how hard you try.

Those desperately hoping for a fresh financial start may be wise to consider the benefits of filing for bankruptcy.

The decision to file for bankruptcy must never be made without all due consideration for the complications and ramifications of such a decision. But, with that being said, it should be noted that bankruptcy should not be viewed as a shameful or inherently negative legal option for you and your loved ones.

Being in debt can earn you negative and judgmental remarks, and so can the decision to file for bankruptcy as a means to escape that debt. If escaping debt through hard work alone is impossible, then it needs to be accepted that, for some people, there is no right way for Americans to find debt relief. So, debtors need to do what’s right for them and their families. And for some of us, that means speaking with a bankruptcy attorney and considering Chapter 7.

Known for giving Americans in debt a ‘clean slate’, Chapter 7 bankruptcy can be both the last resort and the only real option available to some debtors looking to discharge debts and regain control over their lives. At some point, a person needs to stop digging themselves deeper into debt, put aside the shovel, and ask for help.

At Ortiz & Ortiz, LLP, our lawyers have decades of experience helping New Yorkers through the filing process and on their way to financial recovery. With the help of one of our law firm’s attorneys, we can defend you from creditors, provide you with some breathing room with an automatic stay, and aid in eliminating most debts that are weighing you down. In the end, it is our hope that you will then be allowed to move on with your life with a new start, no longer chained down by the weight of unsecured debts you’ve been carrying around.

Both old and new clients who want to understand more about the process of bankruptcy law should contact our office.

You may schedule an initial confidential consultation with an experienced bankruptcy attorney of our Astoria, NY, law firm, and they will help explain your legal options going forward.

Who is Eligible for Chapter 7?

Anyone who lives in the U.S., owns property here, or does business in America is eligible to file for Chapter 7 bankruptcy, with only a few restrictions. If you did not pass the means test or you have too much in the way of disposable income, then you may still be eligible for Chapter 13 bankruptcy, but you are likely not eligible for Chapter 7 under the current bankruptcy code.

Also, if you filed for bankruptcy but dismissed your own case sometime within the last 180 days, then you may not be considered eligible for starting a new case filing at this time.

Other reasons why someone may not be eligible under the current bankruptcy code include instances where a debtor discharged debt via Chapter 7 or Chapter 13 sometime in the last six years. After the six-year window is up, they may consider bankruptcy for debt relief again.

Prior to filing, a debtor must undergo credit counseling by a nonprofit agency that has been approved by the US Trustee’s office. This counseling is to ensure that there are no other options available to the debtor besides bankruptcy. If the debtor failed to undergo the necessary credit counseling, then they have not met the requirements for filing for Chapter 7.

Additionally, in some rare cases, it may be found that the debtor intentionally defrauded their creditors. In such instances, bankruptcy cannot and will not be used as a means to evade those creditors and the debts that are owed to them. Filing false documents in bankruptcy court could result in charges of perjury or fraud.

What is a Means Test?

Those looking to file for Chapter 7 bankruptcy must first pass the means test. This is a formula-based test used to determine whether the filer makes too much money to qualify. In the means test, if you make more income than the New York median income, then you may not qualify.

Typically, only debtors who are wealthy or have larger estates need to worry about not passing the means test. However, everyone should be wary of the possibility of ‘failing’ the test.

If the means test shows that your income is above the New York median income, then you may qualify for Chapter 13 instead, where you may be able to pay back some of your unsecured debts in bankruptcy.

To get an idea of whether you will pass the test, it is important to calculate your average, estimated annual household income. For example, recent figures showed that the median average for a one-person household in New York was about $47,000 a year. If your annual income was below that number, you may hypothetically pass the means test. If it is above, you may not.

For help, please contact an experienced bankruptcy attorney in Astoria.

US military veterans and those in homeland security defense are exempt from the means test.

Which Debts Can Be Eliminated and Which Ones Typically Cannot?

While Chapter 7 is known for providing a fresh, clean slate to people in over their heads in debt, it is worth noting that not all debts are dischargeable by bankruptcy.

Debts that you can hope to see eliminated include:

Bank loans.
Business debts.
Car loans.
Cell phone bill debts.
Credit card debt.
Debt owed to specific retail stores or companies.
Deficiency balances from repossessions and foreclosures.
Medical debt.
Personal loans.
Rent and lease payments.
Utility bills.
And some, but not all, tax debts may be dis-chargeable.

Debts that typically cannot be discharged by filing for Chapter 7 include:

401k loans.
Alimony payments.
Certain community living and condominium plan fees.
Certain pension plan debts.
Child support payments.
Court fees.
Debts from a divorce settlement.
Debts from fraud, embezzlement, theft, crime, and malicious acts.
Debts resulting from causing personal injury or wrongful death to befall another person.
Government-imposed fees, restitution, judgments, and penalties.
Student loans.
And most federal, state, and local tax debts.

What Assets Are at Risk and Which Ones Do You Get to Keep?

One of the main concerns for those considering filing for bankruptcy is how much they may stand to lose in the process of liquidation. Bankruptcy allows for the selling of certain assets to help pay off creditors, who, like it or not, have a right to collect what they are owed.

There are, however, certain exempt assets and pieces of property that creditors do not get to touch, as they are deemed necessary to maintain a certain quality of life.

There are state exemptions and federal exemptions. So, the decision of how you wish to file may be most informed by what you stand to lose/what you hope to keep.

Assets that you may get to keep under federal exemptions include:

A motor vehicle worth up to $4,000.
$13,400 worth of household goods, assets, and personal property.
A homestead exemption allows you to shield about $25,150 worth of equity for your primary residence.

Assets that you may get to keep under New York State’s exemptions include:

A motor vehicle worth up to $4,550.
Tools of your trade worth up to $3,400.
New York’s homestead protection laws allow for a certain amount of equity to be declared exempt by property owners, varying from county to county. The exemption amount in Queens, NY may be estimated to be around $179,950.

It should be noted that some of these numbers change regularly. Please schedule your initial consultation with our lawyers to discuss the particulars of your case.

Other assets not mentioned here need not necessarily be feared lost. Please speak with an attorney at the law firm of Ortiz & Ortiz, LLP, to learn more about the advantages and disadvantages of your unique case.

How Can a Bankruptcy Attorney Help You?

Bankruptcy laws are complex in this country and some of them vary state-to-state. In such important matters as your personal finances and the potential chance to start with a clean slate, you want to make sure that you are proceeding with well-informed decision-making and are leaving no stones left unturned. While you’re dealing with mounting credit card debts, it can be difficult to imagine taking on unplanned legal fees. But a good attorney pays for themselves very quickly by saving time, stress, and hassle.

If you’re unfamiliar with the process of bankruptcy, an attorney at our firm will be happy to help you through it. As your legal representation, we will help you file and ensure that an automatic stay goes into effect, stopping creditors, collection agencies, lenders, and lawsuits from continuing to pursue payments from you while your bankruptcy case is pending.

It is perfectly understandable to feel overwhelmed by the complexities of filing for Chapter 7 bankruptcy in the state of New York. Bankruptcy is no small and inconsequential matter. Even those who have years of experience in finance and law find themselves feeling out of their depths when looking into filing bankruptcy.

For this reason and countless others, it is highly recommended that you and your affected loved ones look into hiring legal professionals with years of experience in the practice areas surrounding bankruptcy cases in NYC. Your lawyer can attempt to lend aid to you with the creditors, with the court process, and with asset protection.

Contact a Bankruptcy Lawyer at the Law Firm of Ortiz & Ortiz to Schedule a Consultation

It does not matter all that much what was the cause of landing you in debt, whether it was the result of reckless spending on a credit card or extreme medical expenses following a personal injury, or because of rent inflation and finding yourself out of work during the pandemic. What matters is that you’re in debt and you’re running out of options looking for a way to dig yourself out of it.

Stop putting up with creditor harassment and stop looking for answers at the bottom of that pit you’re digging for yourself. The answer you’re looking for likely isn’t going to be found by doing the same things you’ve already been doing. Bankruptcy sounds scary to you now, we know. It’s a scary word in America. But the right attorney and the right legal team can make it a whole lot less scary for you.

With an experienced legal professional from Ortiz & Ortiz at your side, you can navigate the bankruptcy process with more confidence that it is the right option for you and that you will be able to breathe a little easier again.

If you’d like to learn more about the debt relief that can be provided by bankruptcy, please call to schedule an initial confidential consultation with our law office. 916-796-1858.