New York Bankruptcy Lawyer

Peter Mertz, CPA, Esq.

Peter Mertz, Attorney and CPA
226 East 85th Street
New York, NY 10028
(Between Second and Third Avenue, across from Post Office)
(212) 737-8588

Over twenty-five years experience in all areas of taxation and bankruptcy law

FREE CONSULTATION . NEGOTIABLE FEES

All your options explained: Chapter 7, Chapter 11, Chapter 13.

Call (212) 737-8588 for your free consultation today. Ask for USLaw.com rates.

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Chapter 7 Bankruptcy

Chapter 7 consumer bankruptcy is a legal process of liquidating these debts. This means that many kinds of debt may be discharged — or simply written off — without you having to repay them. There is a down side, however. Filing a Chapter 7 consumer bankruptcy stays on your credit record for 10 years and can affect your chances of obtaining a home loan or any other form of credit. Also, only a limited amount of personal property and assets are protected, whereas the rest are liquidated to help pay your creditors. Is Chapter 7 Consumer Bankruptcy Right for You?

Until recently, this was the most common form of bankruptcy filed by our individual clients. Due to recent changes in bankruptcy law affecting income requirements, many of our clients have chosen instead to file under Chapter 13.

Chapter 7 Consumer Bankruptcy Facts

Filing for bankruptcy under Chapter 7 can be an effective way of avoiding wage garnishment or mortgage foreclosure and can protect you from creditor harassment. Most actions against you, including lawsuits, cease immediately. A hearing is held to verify the contents of your bankruptcy petition, which lists your assets and liabilities and unless a formal objection is raised, a discharge of your debts is issued approximately 90 after your court hearing.

Debts that can be discharged under Chapter 7 include: credit card debt, bank loans, medical bills, most court judgments, and deficiencies on repossessed vehicles. The debts that are not eliminated in a Chapter 7 bankruptcy include certain taxes and IRS liens, child support and alimony or spousal maintenance, student loans, any debts obtained through fraud (if your creditor raises an objection) or parking tickets and certain government fines.

Property and assets protected under Chapter 7 include: most household items and personal belongings, one automobile of limited value after deducting debt, limited cash or bank accounts, and any qualified retirement accounts such as 401Ks or IRAs. Other assets, such as a home with substantial equity or vehicle of substantial value, savings, investments and income over your basic needs may not be protected.

Chapter 11 Bankruptcy

Due to recent changes in bankruptcy law, successfully completing a Chapter 11 bankruptcy is more difficult than ever before. Most of individual and professional clients now seek debt relief through Chapter 13 bankruptcy for wage-earners.

One of the first things we tell our clients who are considering filing for bankruptcy under Chapter 11 is that this process is not to be entered into lightly. The complicated disclosure statements for Chapter 11 can be 45 pages long, whereas a Chapter 13 bankruptcy involves a four or five page plan. In addition, Chapter 11 bankruptcy is a very formal process with strict legal requirements, restrictions and government oversight.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is right for individuals who:

• are behind in mortgage payments and seeks to save a house
• have excessive debts or more than $50,000 worth of equity in his or her home
• filed for and received a Chapter 7 discharge within the last eight years
• have disposable income after paying reasonable living expenses
• have assets which do not qualify for protection under a Chapter 7 bankruptcy

To qualify for a Chapter 13 bankruptcy, an individual must have a stable and steady source of income, and be able to pay back his or her debts (or a portion of the debts) by making monthly payments over a period of 36 to 60 months. A stable source of income can include multiple sources such as salary, spousal or other support, commissions, rent income or business earnings.