FAQs About Bankruptcy

White Plains Bankruptcy Lawyer

Confronting a serious debt situation can be challenging. Unfortunately, there are numerous unscrupulous agencies and companies who prey on the confusion pertaining to a financial crisis.

As an experienced debt relief attorney, I recognize your need for straightforward and constructive counsel when you are looking for a legal means to resolve your overwhelming debt obligations. The following is a list of the most frequently asked questions I have encountered in my practice.

Did you know the paths to financial freedom are numerous and can be tailored to meet your unique situation? For a detailed explanation of which method of debt relief might work best for you, contact me at Natasha Meruelo, Attorney at Law to schedule a free case evaluation!

What is bankruptcy and what can it do for me?
Bankruptcy is a legal process in which you ask the Bankruptcy Court to grant you relief from your debts. Once begun, the bankruptcy process can reverse the downward spiral of negative credit information piling up and get you on the path of taking control of your finances.

Some of the benefits of bankruptcy include:

  • Immediately halting creditor harassment
  • Discharging credit card and other unsecured debts
  • Preventing wage garnishment and money being taken from your bank accounts
  • Lowering your income-to-debt ratio
  • Eliminating tax consequences of discharged debt
  • Possibly preventing foreclosure of your home or repossession of your car

What is the difference between debt consolidation and bankruptcy?
The truth is most debt consolidation companies do not have your best interests at heart, and often will make your debt problems worse. Frequently, clients have come to me after paying these companies hundreds of dollars with the same or more debt than they had when they first began that process.

Many times, when you are negotiating settlements or working with a debt consolidator, you may end up getting sued by your creditors because they do not defend these lawsuits for you. Additionally, you may find yourself dealing with 1099-c tax liability for the amount of money that was "forgiven" as a result of the settlement. Imagine thinking you resolved one of your debts but are now smacked with an IRS tax bill that comes straight out of your refund, or worse, that is a bill you now owe to the IRS!

On the other hand, debts discharged in bankruptcy are not taxable income. While it is true that filing for bankruptcy is not great for your credit, debt consolidation can have a far more devastating impact because it only delays debt payments, not resolve them. If you stop paying your bills, creditors can still report you to credit reporting agencies unless you are protected by a legal declaration of bankruptcy. Bankruptcy gives you real and immediate protection from your creditors.

How long does debt affect my credit report?
The Fair Credit Reporting Act sets forth rules related to information that may be contained in credit reports. Generally, the following items will remain for a time on your credit report:

  • Bankruptcy cases - up to 10 years
  • Civil suits, judgments - up to 7 years
  • Paid tax liens - up to 7 years from the date of payment
  • Accounts placed for collection or charged to profit and loss ("charged off") - up to 7 years

However, there are still instances when mortgage companies, insurance companies and potential employers may be able to access negative data about you even after the time frames above have passed. It is therefore in your best interests that you consult an experienced bankruptcy attorney who can help negate damaging credit information as soon as possible.

Why are loan modifications so difficult?
Unfortunately, obtaining a loan modification is far from straightforward. Did you know there are more than six different types of loan modifications, each with their own complex requirements? Additionally, there are quite a few factors that influence what type of a loan modification you will ultimately be eligible for, such as your income, the costs of your property taxes and insurance (escrow), and the amount of your delinquency.

If you are seeking to change the terms of your current mortgage, a skilled and knowledgeable lawyer can help you navigate the maze of mortgage modification. As an experienced White Plains consumer defense attorney, I can provide the strategic counsel you need to successfully guide you through the process.

My bank refuses to modify my mortgage. Can I do it on my own?
If you are one of the many New Yorkers who own a mixed-use property, you may be able to modify your mortgage even if your bank has previously refused to do so. A common example is a multiple family home which serves as both a primary residence and rental property. If you are upside down in your mortgage payments, filing for Chapter 13 bankruptcy may allow you to cram down your mortgage to your home's current market value. Once a more reasonable interest rate is applied to the existing balance, you may be able to pay off your mortgage quicker than you ever anticipated.

Is there a way to get relief from student loan debt?
If you have federal student loan debt, you may be eligible for loan forgiveness depending on your chosen profession, what your designated loan payment options are, and how long you have been making payments. For individuals who are in default, it may be possible to obtain a more reasonable payment arrangement. If you are not in default, you still may benefit from many of the repayment options that are available to you and be done with your student loans in as little as 20 years at a reduced payment. These options are often much better than forbearance, where your loans are most likely accruing interest, and put you into a repayment plan that has an end in sight.

If you are disabled or unable to work due to medical issues, you may be able to completely discharge your student loans today. Contact me today and I can help you evaluate your options.

If you are looking for ways to legally tackle student loan debt, you have hope! Laws regarding hardship discharges and other options for modifying student loan debts are constantly changing. As an insightful White Plains bankruptcy lawyer, I can help you determine which legal avenues might work for you. Contact my firm today to request a free case consultation.

Which one is right for me? Chapter 7, Chapter 13, or Chapter 11?
The right bankruptcy option depends on your unique situation. In order to obtain a discharge of your debts, you need to take an honest assessment of what assets you own or may have owned but no longer own, what debts you owe, your income and expenses, and what your past financial dealings have been like. Once you have a complete picture of your circumstances, you and your bankruptcy attorney can decide which measures would be suitable for you.

Burdened by overpowering debt? I can help!

At Natasha Meruelo, Attorney at Law, for nearly a decade, I have been helping individuals successfully resolve their overwhelming debt obligations. If you are facing a debt crisis, I can provide the insightful legal counsel you need and the supportive representation you deserve to stop creditor harassment and get you back on the road to financial freedom.

I would welcome the opportunity to speak with you directly to answer any further questions you may have and detail the individualized representation I can provide. Contact my firm today to schedule an appointment!

Natasha Meruelo, Attorney at Law, represents residents throughout New York. Some of the communities I serve include White Plains, Pleasantville, Yonkers, New Rochelle, Bronx, Brooklyn, New York City, Mount Vernon, Manhattan, and Tarrytown.

* This is Attorney Advertising. Natasha Meruelo, Esq., designated as a Federal Debt Relief Agent by an Act of Congress and the President of the United States, proudly assists consumers seeking relief under the US Bankruptcy Code. Prior results do not guarantee a similar outcome; see attached- 342b and 527a/b .

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