Anyone can be subject of financial challenges. Residents of Long Island, New York, are not exempted as their financial footing can be affected by numerous reasons such as unemployment, serious medical condition and major life changes such as divorce. Getting back on track may be difficult if a debtor chooses to give up, rather than finding a solution to the problem.
For debtors, bankruptcy, which offers debt relief to those who need it, may be a viable option. Debtors should know that filing for bankruptcy can affect their credit score, which could affect future loan applications. But on the bright side, bankruptcy, once approved by the federal court, enables the debtor to settle his or her debts. Some debts can be forgiven under bankruptcy while other must be paid off.
Chapter 13 bankruptcy, also known as reorganization, is one type of bankruptcy that can be filed by individuals. Chapter 13 allows the debtor to pay off the debts through a repayment plan supervised by a trustee. The length of repayment plan usually lasts from three to five years with amount owed each month tied to the debtor’s income level. Whatever debt remains following the repayment period will be most likely discharged once the bankruptcy protection has ended.
In New York, debtors need to understand that it is not shameful to file for bankruptcy. The process was solely made for one purpose – to help honest debtors deal with their financial challenges. For best results, a debtor may seek legal guidance and assistance from a bankruptcy attorney.
Source: cbslocal.com, “Personal Bankruptcy, The Basics,” Jan. 6, 2014