Learn The True Facts About Bankruptcy

It is common for people to experience stress when considering bankruptcy as an option to get out of debt. In a 2014 study of 500,000 Chapter 13 bankruptcy filings conducted by the National Bureau of Economic Research, economists Will Dobbie and Jae Song found that people who file for bankruptcy live longer, make more money and are more likely to keep their homes than individuals who have been denied bankruptcy relief, according to Fortune Magazine.

Unfortunately, misinformation about bankruptcy often causes individuals to delay consulting an experienced bankruptcy lawyer to learn the real facts. Marketing information from credit consolidation firms, credit repair services and debt management companies, as well as misinformation posted on the Internet, may all fuel anxieties about what bankruptcy can and cannot do to solve debt problems. If you are burdened with unmanageable debt, a knowledgeable bankruptcy lawyer can provide straightforward advice on the benefits of bankruptcy.

Common Questions About Bankruptcy

I frequently field questions from clients who are afraid that filing for bankruptcy is the end of the road. In reality, the Bankruptcy Code was created to provide consumers and businesses with a meaningful opportunity to obtain a fresh start after a financial setback. Part of my role is to provide answers to the concerns of clients to allow them to make informed decisions about their financial health.

Some of the most frequent bankruptcy questions include:

  • If I file for bankruptcy, will I ever be able to get credit again? — While bankruptcy will remain on your credit score for up to 10 years, most people are able to obtain new credit cards, car loans and home loans much sooner than they think following bankruptcy. Most people are able to obtain loans and credit many years before the bankruptcy is removed from credit reports.
  • Will my credit be shot after bankruptcy? — Most individuals who are deep enough in debt to benefit from bankruptcy already have low credit scores. Late payments, missed payments and other problems associated with unmanageable debt continue to adversely impact credit. Filing for bankruptcy is an effective method to obtain a fresh start. Rebuilding credit is possible when high credit card balances and interest rates are no longer digging into your paycheck; and not appearing on the credit reports.
  • How does medical debt affect my credit? — Medical providers frequently report late and missed payment to the credit reporting agencies, even when there is a dispute with a health insurance provider concerning coverage. Similarly, medical debt can be sold to collections agencies. Medical debt is dischargeable in bankruptcy and is among the most common reasons consumers fall into financial distress. GOOD NEWS: Early in 2015, at the instigation of our New York state attorney general, credit reporting agencies have agreed to change when and how they list medical debts. According to a press release on the attorney general's website, pursuant to the attorney general's agreement, there will be a 180-day waiting period before medical debt will be reported on a consumer's credit report. In addition, while delinquencies ordinarily remain on credit reports even after a debt has been paid, the CRAs will remove all medical debts from a consumer's credit report after the debt is paid by insurance.
  • Will bankruptcy automatically wipe out court judgments against me? — NO: The best course of action is to file the bankruptcy before a judgment is filed. But, the bankruptcy filing will immediately stop all attempts by that creditor to collect on that judgment, such as freezing bank accounts or garnishing wages. However, the judgment is a filed legal document with the local County Clerk's office; and it could be a lien on any real property (house, condo, land) that you own in that County. That judgment document will stay in that local office and continue to be a lien unless something is done. Depending on the particular facts, there are several ways to avoid or get rid of a judgment and judgment lien under the Bankruptcy Code. Each situation is different and we will obtain for you the best relief allowed.

Get Straight Answers From A Bankruptcy Lawyer Serving New York Since 1980

If you are considering bankruptcy, you likely have many questions. To learn the straight facts, contact Nathan Horowitz, Esq, online or call 800-592-3020. I offer flexible scheduling, with offices in White Plains and Carmel, New York.

The law practice of Nathan Horowitz, Esq, is recognized by federal law as a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.