Creating A Realistic Payback Plan

If your income or another factor disqualifies you from Chapter 7 eligibility, you can still file for bankruptcy, but it will have to be Chapter 13 bankruptcy. This type of bankruptcy doesn't eliminate your debt, but allows you to set up a repayment plan over three to five years whereby you can repay your creditors according to a court-approved plan. This type of bankruptcy can also provide you a great deal of financial relief, including protection from foreclosure or repossession, even if your debts don't immediately disappear the way many of them do in a Chapter 7 filing.

As with a Chapter 7 bankruptcy, as soon as your lawyer files Chapter 13 bankruptcy on your behalf, creditors can no longer harass you or try to garnish your wages. If you fail to pay back your creditors according to your Chapter 13 repayment plan, though, your creditors may be able to resume collections efforts.

Prioritizing Certain Debts

When you create your debt repayment plan, some debts must take precedence over others. For example, the following debts will jump to the head of the line for repayment:

  • Alimony
  • Child support
  • Certain tax obligations
  • Employee back wages

Other debts, including credit card debt, medical bills and other debts, will follow once the prioritized debt gets paid off.

Depending on your income in New York, you will have to pay your creditors for either three or five years according to the terms of your repayment plan. After that time, your remaining debts will be discharged.

Let's Talk About What's Possible

Chapter 13 bankruptcy might be the right option for you, or a Chapter 7, or some other method of debt reduction. We can analyze your finances and determine the smart way to move forward. Ultimately the choice is up to you, though. We don't force anything on you. We simply present you with your best options at your free initial consultation. The rest is up to you. To schedule your appointment with an attorney at our Monticello office, the Law Office of Richard Scott Zirt, call 800-390-5276 or email us for more information. We think you'll be pleased with the results.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.