Bankruptcy Attorney Buffalo NY
In today’s uncertain economy, more and more people are experiencing financial difficulties. Cole, Sorrentino, Hurley, Hewner & Gambino, P.C., recognize the scope of the issues our clients face.
We are determined to help our clients identify and execute every possible option toward debt relief and return to solvency. We want to help alleviate the pressures our clients experience, and help them regain control of their finances and start planning for the future.
The history of bankruptcy laws in the United States goes back to the debtors prisons of England. Through a series of Congressional reform acts, bankruptcy has evolved from something like a crime to a legitimate way to slough debt and have a “fresh start,” financially.
If you live in Buffalo or Western New York and you’re drowning in debt, you might be considering filing for bankruptcy – and you probably have many questions. To help you with the basics, the following page provides a broad overview of how bankruptcy works. Should you decide to file for bankruptcy, the highly skilled attorneys at Cole, Sorrentino, Hurley, Hewner, & Gambino, P.C., will be ready to help you get through the process and plan for your financial future.
Chapter 7 and Chapter 13 Bankruptcy Lawyers
One of the standard individual bankruptcy options is a Chapter 7 bankruptcy. Both individuals and corporations are eligible, and Chapter 7 bankruptcy is the most common in the United States. This is the closest thing you can get to a “fresh start.” If you file for Chapter 7 discharge, the courts will liquidate all of your assets and give the proceeds to your creditors. Certain exemptions may allow you to retain some of your property. It’s important to note, though, that some debts are exempt from discharge. You cannot get rid of child support payments, for example, or student loans (except in rare cases), property taxes, or income taxes less than three years old.
Chapter 13 bankruptcy, meanwhile, allows the filing party to maintain control of nonexempt assets while reorganizing and paying off debt. With this option, debtors create a debt repayment plan that lasts three to five years, after which time all remaining debt is discharged. This option is particularly effective at stopping home foreclosures.
Your bankruptcy attorney will help you determine which individual bankruptcy option is best, putting you on the path to financial freedom.
Basic Bankruptcy Concepts
Voluntary vs. Involuntary
Bankruptcy can be voluntary or involuntary. A bankruptcy is voluntary if an individual or company freely chooses to file. A bankruptcy is involuntary if creditors force an individual or business to file. Voluntary bankruptcies are by far the more common. Involuntary bankruptcies usually occur in conflicts between the business and its creditors. If you’re reading this page, it’s very unlikely you’ll have to deal with an involuntary bankruptcy.
Liquidation vs. Reorganization
This is the basic difference between Chapter 7 and Chapter 13 bankruptcy. In liquidation bankruptcy (Chapter 7), the court sells off all a debtor’s assets and gives the proceeds to the creditors.
In a reorganization bankruptcy (Chapter 13),court “reorganizes” debts, making it easier for the debtor to pay them off over a prearranged period. This generally discharges only some or part of an individual’s or business’s debts.
The automatic stay is one of the most important benefits of filing for bankruptcy. Basically, the automatic stay temporarily stops all collection activities against the debtor, unless these are part of the bankruptcy process. The automatic stay provides the debtor a break in order to decide exactly how to handle the financial situation. With this moment of pause, the debtor can figure out how to proceed with paying back the debts without worrying about creditors showing up and taking away assets.
When an individual or company files for bankruptcy, this creates an estate, or collection of assets that the court will liquidate to pay off debts. The proceeds will go to creditors, starting with those who took on the least risk. Not everything a debtor owns goes into the estate. You should talk with an experienced bankruptcy attorney if you’re concerned about which assets and possessions might end up in the estate for liquidation.
The court will appoint a trustee to administer the bankruptcy process. Depending on the type of bankruptcy, the trustee will oversee the collection and sale of assets and paying off creditors. In certain situations, the trustee will start legal actions to protect the estate and recover money or other assets that ought to go to creditors.
If an individual files for bankruptcy, not every single piece of property goes into an estate to pay back debts. Bankruptcy law allows for certain exemptions for the debtor’s property. For example, in a New York Chapter 13 bankruptcy, debtors can often keep their primary residence (subject to certain conditions and limitations, of course). Even though Congress controls federal bankruptcy laws, state laws often determine property exemptions.
Types of Bankruptcy
Even though there are several different types of bankruptcies, not every type is available in every situation. Depending on the debtor’s financial situation, some types of bankruptcies will be more advantageous. We usually refer to bankruptcies by the name of the chapter in the Bankruptcy Code describing how each type works.
Chapter 7: Chapter 7 is a liquidation bankruptcy. Both individuals and businesses may use it. Chapter 7 offers the best way to get a “fresh start,” although not everyone is eligible to file for Chapter 7, and some debts might be exempt from discharge.
Chapter 9: Chapter 9 is a reorganization bankruptcy only available to municipalities.
Chapter 11: Chapter 11 is another type of reorganization bankruptcy available to both individuals and businesses, though individuals use it rarely. Chapter 11 bankruptcy allows a business to continue operating with oversight from the court. It is ideal in situations when a business is more valuable (to creditors) in operation than it would be if a trustee sold it off in parts.
Chapter 12: Chapter 12 is similar to Chapter 13, but applies only to farmers and fishermen.
Chapter 13: Chapter 13 is a reorganization bankruptcy available to both individuals and businesses (as long as the business is not a separate legal entity from the individual). The court does not totally discharge most debts; instead the debtor can propose a plan to rearrange repayment of the debts. One of the biggest reasons an individual will choose Chapter 13 bankruptcy is to keep creditors from seizing property and other assets.
Which Type of Bankruptcy Should I File?
What type of bankruptcy is best suited to an individual or business will depend on many factors. Each type of bankruptcy available has its advantages and disadvantages. What is more advantageous to one debtor may not be best for another. Then there’s the issue of eligibility. For example, individuals who make too much money usually aren’t eligible to file for Chapter 7 bankruptcy.
A Bankruptcy Attorney that Can Take Care of All Your Needs
If bankruptcy is the right option for you, our attorneys will handle every aspect of the process personally, start to finish. Our law firm’s approach features a series of personal interviews, the timely filing of all necessary documents, attendance at any court hearings, and an attentive follow-up appointment to make sure that your bankruptcy-related issues are resolved.
Arrange Your Initial Bankruptcy Consultation
If you’re facing Chapter 7 or Chapter 13 bankruptcy, our Western New York, our bankruptcy attorneys can help.
Contact Cole, Sorrentino, Hurley, Hewner & Gambino, P.C., online or by phone to discuss your bankruptcy issues with one of our attorneys, and set up a free consultation whenever your schedule permits it. We welcome the opportunity to represent you.