Once you’ve made the decision that bankruptcy is the right solution for your financial needs, you’ll need to decide which type will work best for your situation. If you’re an individual or a small business owner in the state of New York, your best choices are either Chapter 7 or Chapter 13 bankruptcy. While Chapter 7 can be thought of as a “liquidation,” Chapter 13 is more of a “reorganization” of finances.

Chapter 7 & Chapter 13 Bankruptcy Explained

There are several situations where Chapter 13 bankruptcy is preferable to Chapter 7. Chapter 13 is the ideal solution if you find yourself behind on mortgage or business payments and want to keep your property. Chapter 13 bankruptcy allows you to pay on the overdue payments in order to reinstate the original mortgage agreement. People typically file for this type because they have too much income to file for Chapter 7, or they have debt that is not dischargeable in Chapter 7.

For the vast majority of New Yorkers who want to eliminate their heavy debt without paying it back, Chapter 7 provides the best-looking option. With Chapter 7, you receive a complete fresh start. Once the bankruptcy is discharged, the only debts you will have to pay will be for secured assets on which you have signed a reaffirmation agreement. Creditors can no longer attempt to collect or garnish wages you earn, and any property you acquire (except for inheritances) after the bankruptcy filing date is yours.

Thomas A. Corletta, Attorney at Law has over 30 years of experience in consumer bankruptcy and has handled over 3,000 cases. He works on every single case and will not pass yours off to a lower-level associate on staff. For more information, call (585) 546-5072 or visit him online. Consultations are always free. You can also connect on Facebook and Twitter.