FAQ - Frequently Asked Questions

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If you're considering filing bankruptcy, you probably have questions. Because every situation is unique, it's important that you speak with a qualified and experienced New York bankruptcy attorney. Contact the Law Offices of Thomas J. Minotti, P.C. to schedule a free initial consultation, and for answers to your specific questions.

Commonly Asked Questions About Bankruptcy

How can a Chapter 7 bankruptcy help me?

A Chapter 7 bankruptcy, also known as a liquidation bankruptcy, is often best for people with unmanageable amounts of unsecured debt. Most unsecured debt is discharged in a Chapter 7 bankruptcy.

Filing a Chapter 7 bankruptcy automatic stops all collection efforts by your creditors. Once you file for bankruptcy, your creditors are not allowed to contact you in any way to enforce a debt. All debt collection efforts, including legal proceedings, are stopped. This includes foreclosure lawsuits, collection judgments, and wage garnishments.

How can a Chapter 13 bankruptcy help me?

If you earn too much money or have too much equity in your home, you may not be eligible for a Chapter 7 bankruptcy.

A Chapter 13 bankruptcy is often best for people who have secured debt, like a mortgage or a car loan, or who have tax debt. Like a Chapter 7 bankruptcy, filing for a Chapter 13 bankruptcy automatically stops all collection efforts, including collection of judgments, foreclosure lawsuits, and wage garnishments.

In a Chapter 13 bankruptcy, you will pay back a percentage of your unsecured debt over a 3 to 5 year period. At the end of the repayment period, the remaining debt is discharged.

How long will bankruptcy affect my credit?

A Chapter 13 Bankruptcy stays on your credit for 7 years.

A Chapter 7 Bankruptcy will stay on your credit report for 10 years.

How do I re-build my credit after bankruptcy?

After you’ve declared bankruptcy, it is important that you use your credit responsibly. Otherwise, your credit situation will not improve. The best way to improve your credit is to continue making payments on your house and car.

Your credit score is not the only factor banks consider when deciding whether or not to extend you credit. Banks will also consider:

  • payment history
  • the amount of money you owe
  • the length of time you've been in the credit system
  • the kinds of credit you used in the past
  • the amount of credit you've applied for recently
  • debt-to-income ratio (which is improved by bankruptcy)
  • your employment history
  • address history
  • the amount and kind of property that you own

Will I lose my home if I file for bankruptcy?

Because every situation is unique, it's important that you speak with a qualified and experienced New York bankruptcy attorney like Tom Minotti. If you file a Chapter 7 bankruptcy but have too much equity in your home, you could be at risk of losing the house. In this situation, a Chapter 13 bankruptcy would be better for you.

In a Chapter 13 bankruptcy, you could use the 3 to 5 year repayment period to pay back missed mortgage payments. You might also be eligible for a loss mitigation program that will allow you to apply for a modification of your mortgage.

Will I lose my car if I file for bankruptcy?

Similar to concerns about losing your home, if you are behind on your car payments, you might be able to keep the car and make up the payments is a Chapter 13 bankruptcy. You might also be able to declare Chapter 7, and reaffirm the auto loan, which would allow you to keep the car.

Can I get rid of a second mortgage in a bankruptcy?

Under certain circumstances, you can strip the second mortgage from your home in a Chapter 13 bankruptcy.

Can I avoid paying a judgment lien if I file for bankruptcy?

In most cases you can discharge the debt associated with the judgment and strip a judgment lien off of your home.

How much debt will I have to pay back in a Chapter 13 bankruptcy?

The amount of your Chapter 13 plan payment is determined by multiple factors, such as the amount of secured debts, taxes owed, disposable income, and non-exempt equity in property.

What debts are not discharged in a bankruptcy?

You cannot discharge certain debts in bankruptcy, including domestic support obligations, certain tax debts and government fines, some student loans, and debts arising out of intentional conduct such as drunk driving, assault, or fraud.

Questions About Bankruptcy or Mortgage Modification? Contact The Law Offices of Thomas J. Minotti, P.C. Today

If you have questions about bankruptcy or mortgage modification options, contact the Law Offices of Thomas J. Minotti, P.C. today. Call 845-570-9300, email info@minottilaw.com, or complete the online form.