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Frequently Asked Questions

Debt and bankruptcy raise many complicated and uncomfortable questions. Make yourself more comfortable with the experience and compassion of O'Connor, O'Connor, Bresee & First. Use this page to get yourself started on your way to debt relief. We look forward to answering any further questions you may have.

Any question about bankruptcy receives the warm and helpful welcome it deserves

Contact us or call 518-465-0400 or 877-886-4029 (toll free) to make an appointment for an informative and free consultation. At O'Connor, O'Connor, Bresee & First, we welcome you to the beginning of your journey to debt relief.

What are some alternatives for over-indebted consumers?

Careful budgeting, credit counseling, or other debt management programs can solve debt problems for most consumers. But some over-extended consumers may need to consider legal options to resolve their debt problems. Title II of the United States Code offers two legal procedures--Chapter 7 and Chapter 13--for consumers to resolve their financial problems.

What is the Chapter 13 Repayment Plan?

A repayment plan under Chapter 13 typically extends your time to pay your debts, from three to five years. The plans often provide for a repayment of significantly less money than is actually owed.

A wage earner plan, or a Chapter 13 plan, permits individuals with steady income to pay all or part of their debts. The law requires consumers to make a good faith proposal with respect to their debt repayments. The law contemplates that individuals often times will not be able to pay their debts in full, and affords the opportunity to consumers to pay as much as they can afford, even if that amount may only result in as little as ten percent of the indebtedness owed. Under Chapter 13, your attorney prepares a Chapter 13 petition, schedules and proposed payment plan by examining your monthly living expenses, including food, automobile expenses, rent, mortgage, etc. The lawyer then analyzes monthly net income of the consumer. Provided that the net income exceeds the expenses and can provide a meaningful payment to creditors, your attorney will then propose to pay creditors based upon the extent that the net income exceeds monthly expenses.

What is the procedure and involvement of Chapter 13 Trustee?

Once your attorney has prepared your Chapter 13 petition and schedules, the papers are filed with the United States Bankruptcy Court. The court filing fee is $274; however, this fee has been periodically increased in recent years. Once the petition is filed, consumers are protected from further action by creditors including continuation of wage garnishment or payroll deductions by unsecured creditors. Upon the filing of the petition, the court appoints a Chapter 13 Trustee to administer your plan. The Chapter 13 Trustee and your attorney work together toward plan confirmation. The trustee also meets with the client and attorney at a Meeting of Creditors to inquire if any circumstances have changed since the date of the filing of the petition or with respect to any information contained in the Chapter 13 petition and schedules. Shortly after the meeting, the Chapter 13 Trustee and your attorney will present your plan to court for confirmation.

What are the advantages of Chapter 13?

There are many advantages to resolving your debts via Chapter 13 bankruptcy. Once you have filed, creditors may not do the following:

  • Institute legal proceedings against you including foreclosures and car repossessions
  • Continue to prosecute lawsuits that they have started against you
  • Enforce judgments against you by having your property sold
  • Attack your wages
  • Take any other action to try to force you to pay your obligations, unless the court approves

Additional benefits include the following:

When you want to reapply for credit after your Chapter 13 plan has been completed, potential lenders might prefer to see a Chapter 13 filing in your credit record instead of a Chapter 7 bankruptcy, since the Chapter 13 option results in the payment of a greater percentage of your indebtedness than the creditors would receive in a straight bankruptcy. Some lenders, however, have made it clear that they do not distinguish between Chapter 13 wage earner plans and Chapter 7 straight bankruptcies regarding future credit.

Chapter 13 bankruptcy information currently stays on your record for seven years with the possibility that it may be reduced to five years in the future. Chapter 7 straight bankruptcy information normally stays on for a ten-year period.

How do I resolve problems that occur after Chapter 13 plan confirmation?

Often times, after a plan has been confirmed, the debtor's circumstances change as a result of illness, interruption of employment, divorce, or other factors which render the consumer unable to pay the Chapter 13 payments. Because of the extended payment nature of Chapter 13, there have been a significant number of Chapter 13 filings that were not successfully completed and ultimately dismissed for nonpayment. It is especially important to choose a competent, reputable attorney to advise you on your repayment plan and to resolve any post-confirmation problems that may arise.

Do you Lose Property if You File a Chapter 7?

Pursuant to New York laws, certain assets are exempt and are not lost in bankruptcy. In an overwhelming majority of all of the bankruptcies filed, consumers do not lose any of their assets. The property you keep is referred to as exempt property. Individual consumers can generally keep up to $50,000 equity in a home, $5,000 for cash, personal property, and household goods. In addition, if the consumer is involved in a trade, there is a provision for keeping tools of trade that have a value of up to $600. When assets exceed the exempt asset limitations, your attorney should advise you of the Chapter 13 option which may enable you to keep all of your assets.

What is the procedure for filing Chapter 7—straight bankruptcy?

Preparation of the petition—the schedules and related forms in a bankruptcy—is not as involved as that in a Chapter 13, in that there is no plan formulation or calculation of disposable income necessary to fund the plan. Once the papers are filed with the bankruptcy court, the court then schedules a Meeting of Creditors, usually within 30-45 days from the date of filing of the petition. The Meeting of Creditors affords the opportunity for a court-appointed trustee to review the information contained in the schedules with the consumer. If there are no assets or other problems with the case, the discharge order is usually issued within six months from the date of the filing of the petition.

What are the general features of filing for bankruptcy?

Neglecting your bills or getting into debt over your head can affect your credit history unfavorably for many years. Filing a petition under Chapter 13 or Chapter 7 of Title 11 of the United States Code is not necessarily the answer for all individuals facing financial difficulties. The Chapter 13 or Chapter 7 option, however, may be a necessary step for the overwhelmed debtor who must choose between meeting basic financial needs such as clothing, housing, food, and other financial necessities and satisfying the demands of creditors. The United States Constitution provides you the legal right to file for relief under Chapter 13 or Chapter 7 to resolve financial difficulties.

How do I set up an appointment for consultation?

Contact Mr. O'Connor's secretary at (518) 465-0400. There is no fee required for an initial consultation. If a consumer wishes to file a wage earner's plan under Chapter 13, Mr. O'Connor's fee is paid inside the plan and there is no requirement to pay a legal fee in advance.

Can I keep my house if I file bankruptcy?

In a Chapter 13 bankruptcy, you can pay back debts gradually and often prevent a home foreclosure. With a Chapter 7 bankruptcy, you can reduce or eliminate credit card debts, medical debts, and other unsecured debts. Even in a Chapter 7 debt liquidation bankruptcy, you can protect your home. Certain assets, like a home of certain value and a car or truck of certain value, are free from liquidation—in other words, you can keep certain types of property and still file for a Chapter 7 bankruptcy. New York permits a debtor to retain $50,000 equity in a home, $100,000 equity for husband and wife.