Bankruptcy Lawyers Helping Clients Find a Fresh Financial Start by Filing for Chapter 7 in Jackson Heights, NY

While the economy is supposedly beginning to stabilize and get its strength back, many working families across the country fail to see how this is benefiting them. While inflation soars, worker wages remain largely unchanged. And with difficulties brought on by the pandemic, a lot of Americans are out of work or facing new financial challenges that they never experienced previously or knew how to plan for.

If you’ve found yourself in debt, it’s important to understand that you do have options available to you, including but not limited to filing for bankruptcy in New York.

Chapter 7 bankruptcy is a liquidation bankruptcy that can dismiss or eliminate a number of outstanding debts. Additionally, it grants an automatic stay, so that creditors and collection agencies cannot continue to harass you over the phone or in person.

But there are drawbacks to filing bankruptcy, too, and one should not file for Chapter 7 without doing their homework. In order to ensure that this is truly the best option for you and your estate, it is advisable to speak with an attorney experienced in bankruptcy law.

If you are considering bankruptcy, please contact the law offices of Ortiz & Ortiz, LLP in Jackson Heights, NY. Our lawyers would be proud to provide you with legal advice and assist you through the bankruptcy process.

What Are Common Reasons to File for Bankruptcy in New York?

While the classic American Dream is all about finding success, love, and fortune, this country is not short on ways by which Americans can fall into a bottomless pit of debt. Try as they might–and they do try–sometimes that pit is impossible to crawl back out of.

Some people end up in extreme amounts of debt simply from unemployment, which unfortunately has become increasingly common in recent years during COVID-19. Others may be gainfully employed but, either due to high rent or living expenses, are accused of ‘living beyond their means’ and overextending their credit. Still, others wind up in extreme debt after a divorce or a failed business.

One other common way in which New Yorkers find themselves in debt and considering bankruptcy is after an injury or illness that insurance can’t or doesn’t adequately pay for. Medical bills can destroy a person’s finances in very little time.

What Debts Can Be Eliminated by Chapter 7 Bankruptcy?

Chapter 7 can eliminate a number of outstanding, unsecured debts, granting a debtor with a clean slate by which they may hope to start anew with debt relief.
Debts that can be eliminated include:

Bank loans.
Certain court judgments.
Credit card debt.
Medical expenses.
Store credit debts.
And certain tax debts.

Debts that typically cannot be eliminated include:

Alimony debts.
Child support debts.
Student loans.
And the majority of tax debt, including debts taken on from federal income taxes.

To learn about the kind of debt relief you could achieve from Chapter 7, please contact the bankruptcy attorneys of Ortiz & Ortiz, LLP.

What Assets May Be Exempt from Liquidation Bankruptcy?

One of the reasons people fear filing bankruptcy is the notion that they stand to lose everything that they own. This is simply not the case. While it is true that some assets and property are at risk of being seized if you file for Chapter 7 bankruptcy, many people who file will lose very little, if anything. That is because there are certain assets that are held exempt and cannot be seized by creditors during the liquidation process in bankruptcy court.

The list of assets that are held exempt vary depending on whether you wish to file by state or federal law.
Assets that are exempt under federal law include:

A motor vehicle with a worth of approximately $3,400.
Household equity valued up to $21,625 for a single individual homeowner. The number is doubled for a married couple.
Jewelry valued up to $1,450.
Valid 401(k) and IRA accounts.
Workers’ compensation, pension, and social security benefits.

Assets that are exempt under New York state laws include:

A motor vehicle equity of about $4,825.
Homestead equity of about $90,000.
Jewelry valued up to $1,350.
Majority of household goods and personal property.
Wedding ring.
Workers’ compensation, pension, and social security benefits.

Contact the Law Firm of Ortiz & Ortiz to Schedule a Consultation

Bankruptcy is negatively perceived by most Americans who want to believe that our financial system works well enough for exceptionalism and hard work ethics to pull people out of debt if they try hard enough. But this way of thinking is unkind and out of touch. Things are hard out there and getting harder all the time. It’s okay to admit that you need some help sometimes.

Chapter 7 bankruptcy may be a measure of last resort. If you can avoid filing bankruptcy, then you should, and the lawyers of our firm would be happy to provide you with alternative ideas for how to address your debts. But for some New Yorkers, Chapter 7 really is their best option. If that is the case for you, then the bankruptcy attorneys of Ortiz & Ortiz will do everything in their power to help you through the complicated process in bankruptcy court in hopes that, by the end, you may achieve the fresh start that you are looking for.

Ortiz & Ortiz, LLP serves clients in Jackson Heights and all across New York City. Call our law offices to schedule a consultation today at 917-540-9772.