Bankruptcy Attorneys for Post-Virus New York City
Let Us Help
It’s impossible to overstate the impact that the Coronavirus pandemic has had on New York and New Yorkers. Millions of people are out of work and hundreds of thousands of people have contracted Covid-19.
While New Yorkers grieve, too many are also struggling to stay on top of their bills. For some, there’s only one way to come through the very long process that we’re enduring: seeking bankruptcy protections.
Who Does Bankruptcy Help?
There are a few different types of bankruptcy – Chapter 7, Chapter 11 & Chapter 13.
In Chapter 7 bankruptcy, individuals are able to discharge their debts in exchange for a bankruptcy trustee auctioning off non-exempt property to pay creditors. Debtors in Chapter 7 filings enjoy an “automatic stay” that stops most collection efforts against you. This puts an end to the phone calls and threatening letters you may be receiving, and can go a long way toward protecting your sanity.
Bottom line: If you typically have a modest income and don’t own a lot of property, Chapter 7 may be the best choice for you to clear debts like credit cards and medical bills to have a fresh start as the economy slowly reboots from the Covid-19 crisis.
For small business owners and others who have a high net worth and high debts, Chapter 11 bankruptcy may be an option. To qualify for Chapter 11, your unsecured debt must exceed a little over $400,000, and secured debt must exceed just over $1.2 million.
If you qualify, Chapter 11 means that you or your business will reorganize debt and present a plan for payback to creditors. Creditors vote on whether to approve the plan, and when it is confirmed, a third party is appointed to execute it. Debts are discharged after the plan has been implemented and creditors have largely been paid.
Bottom line: If you are saving a business enterprise impacted by the Coronavirus crisis or restructuring a very high personal debt load, Chapter 11 may be the way to go. Be advised: Chapter 11 is more expensive and complicated than other types of bankruptcy, but it is the preferred approach in some cases.
Chapter 13 bankruptcy blends some features of both of the other two types. Debt isn’t simply discharged after a sale of assets; instead, your debt will be restructured and you will make payments to a trustee for three to five years. The trustee will disburse funds to valid creditors.
If it sounds like a worse deal than Chapter 7, note that the long period of Chapter 13 bankruptcy actually means you’re protected – and can catch up on vital obligations – for a longer period of time.
Chapter 13 gives you a chance to get current on past-due taxes, child support, alimony, house payments, car loans, and more. You also have the option of restructuring some older loans through Chapter 13.
Bottom line: Chapter 13 bankruptcy is a lengthy process that can preserve your assets and help you get current on obligations like child support, taxes, and mortgages. In our practice, about 85% of the bankruptcies we help with are chapter 13.
Moving Forward Together
What’s happened in New York is historic, and the unrelenting sacrifice of New Yorkers has made a huge impact in reducing the loss of life. But now, as we adapt to a new New York where Covid-19 is part of the background, hundreds of thousands of people will find their situations permanently altered.
The bankruptcy attorneys at Zelenitz, Shapiro & D’Agostino are here to help our community come back strong. Call us today at 718-523-1111 for a free consultation with an experienced bankruptcy lawyer and learn how you can start to move forward from the Coronavirus crisis.