When people hear the word “bankruptcy” they might envision a situation where the court seizes their home, cars, and other possessions to pay off their debts thereby leaving them with only a few assets. Others may assume that it is impossible to recover from bankruptcy or feel that their extreme level of financial hardship is uncommon.
However, bankruptcy does not exist to punish debtors. Rather, it is intended to help give individuals a “fresh start.” Below we discuss four bankruptcy secrets that almost everyone misses.
- Most people keep many of their assets – Many envision losing their homes and possessions when they think of the word bankruptcy; however, you’re more likely to keep many, or even all of your assets. Individuals and couples are allowed certain exemptions, which permit them to keep items up to a certain value. In practice, the use of exemptions means that people will have to forfeit property in fewer than five percent of bankruptcy cases.
- You can protect a large amount of equity in your home – In the Bronx, you may protect a large amount of equity in your home thanks to the Homestead Exemption, a legal provision that helps to shield your home from creditors following the declaration of bankruptcy. According to New York State Law a debtor in the Bronx can protect the equity in their house, apartment, or co-op up to $170,825. This exemption is particularly helpful because it not only provides financial protection, it also provides physical shelter by blocking the forced sale of your primary residence.
- Most people who file Chapter 7 bankruptcy will discharge most or all of their credit card debts. This is because credit card debt is generally unsecure (not backed by your property or other collateral) and is nonpriority debt. As a result, filing bankruptcy will allow you to discharge, or clear, your credit card debt provided that you give up non-exempt property such as property that is not your primary residence, new cars that still have equity, expensive clothing, and jewelry.
- You are not alone. Bankruptcy often carries a stigma due to its association with reckless spending; however, most bankruptcy cases arise due to unexpected financial hardship such as the sudden loss of a job or unanticipated medical bills. If you are suffering from financial hardship, filing bankruptcy may be the first step to helping you regain control of your life.
Consult an experienced bankruptcy attorney
Nobody is immune to financial burdens. Even those of us who prepare for possible financial hardship may find themselves in dire straits due to expensive medical bills or sudden unemployment. For more than 30 years, the law offices of Thomas M. Denaro, Esq has been dedicated to helping Bronx residents work toward a more stable financial future. Call our Bronx bankruptcy attorney at (718) 863-6000 or contact us online to schedule a free and confidential consultation.
