Many New York residents want to avail themselves of the benefits of bankruptcy, but they fear the loss of personal property and assets, including their home, car, wages, pensions and retirement accounts. In some instances, this fear is well founded. While bankruptcy is a powerful tool to dispatch debt, selecting the wrong form can force you to give up property. Hayward, Parker & O’Leary Esqs. has counseled and protected the assets of Middletown, Newburgh and Orange county residents for more than two decades.
Since the 2007 financial crisis, many debt relief programs have sprung up. Unfortunately, many of these programs do little to fix debt problems and may introduce complications. Additionally, less than scrupulous parties are attempting to take advantage of hard-working New York residents in difficult financial straits. To protect your home and avoid foreclosure rescue scams you should keep several things in mind.
If keeping property is secondary only to your debt concerns, Chapter 13 bankruptcy can be your best option. The automatic stay puts an immediate stop to collections or attempts to repossess your car or foreclose your home. While Chapter 13 requires all secured debts to be repaid, it also
A loan modification under the Home Affordable Mortgage Program (HAMP) can make first and second mortgages more affordable, and can be obtained while your bankruptcy case is pending
A wage garnishment or bank account restraint can be one of the most upsetting aspects of being in debt. Aside from the embarrassment of your employer being aware of your debt issues, receiving less than your full paycheck can further exacerbate the problem, and having checks unexpectedly bounce because your account is frozen can ruin your day. Fortunately, either Chapter 7 or Chapter 13 of the bankruptcy code effectively handles wage garnishments and bank account restraints. Under either chapter, the automatic stay prohibits collection attempts, including wage garnishments and bank restraints, following the filing of the bankruptcy petition. If the bankruptcy process discharges the underlying debt, the creditor may not reinstate the wage garnishment or bank restraint.
Many New York residents are hesitant to relieve their debt through bankruptcy because they fear the loss of their retirement savings accounts This fear, however, is usually unwarranted. Pensions, profit sharing plans, employee stock ownership plans (ESOP), stock bonus plans, employment annuities, IRAs, Roth IRAs, retirement plans or deferred compensation plans are all fully exempt under the federal exemptions. Under the bankruptcy exemptions in New York IRAs, Keogh plans and 401K plans all receive an unlimited exemption.