Jeffrey M. Rosenblum, P.C.
A Fresh Start

Long Island Bankruptcy Law Blog

Yes, you can rent an apartment after filing for bankruptcy

Bankruptcy can be a fresh start and put you on the road to financial health. However, for a time, your credit will take a hit.

One concern that many people who file for bankruptcy have is if and when they'll be able to rent an apartment. If you've been living with friends or family because you can't afford your own place, this is something to think about.

When should a business choose Chapter 7 over Chapter 11?

Chapter 7 bankruptcy is typically associated with individuals who file for personal bankruptcy. In some cases, however, companies choose to file for Chapter 7 rather than the more common Chapter 11. Let's look at when a company might want to consider going the Chapter 7 route.

Chapter 7, whether it's filed by an individual or company, is considered "liquidation" bankruptcy. When owners determine that a company's debt is so large that it can't be reorganized, they may choose Chapter 7. This allows them, under the supervision of a trustee, to pay their creditors (to the extent possible) by selling their nonexempt assets. Corporations as well as small businesses may be able to file for Chapter 7.

How can I keep the things I need during bankruptcy?

Your only form of transportation. Your grandmother's jewelry. The house you and your family grew up in. These are some of the assets that people with extreme debt may fret about losing to foreclosure, repossession or bankruptcy. But there is an option that allows people to keep the things they care about and still pay down debts to satisfy creditors.

How does personal bankruptcy work?

Do you have to pay a debt that's not on your credit report?

You're getting calls or other notices from a creditor or collection agency on a debt they say you owe. However, you don't see it on your credit report. They must be mistaken, right? Not necessarily.

Although most companies report consumers' debts to at least one major credit reporting agency, they're not required to. While that might help your credit score, that doesn't mean you don't owe the money -- along with interest and fees. Further, the debt can always end up on your credit report later.

Proposed legislation could help people with student loan debt

If a significant portion of the debt that has you considering bankruptcy is student loan debt, you're not alone. Almost a third of people who file for bankruptcy have student loan debt. On average, it comprises almost half of their total debt. Those figures are from a study by LendEDU. That site provides tools and information to help people compare and learn about financial products.

At $1.52 trillion, student loan debt is the second largest category of U.S. consumer debt in dollars -- exceeded only by mortgage debt. If you owe some of this $1.52 trillion, you may already know that student loan debt is extremely difficult to discharge in bankruptcy.

Are you worried about losing assets in bankruptcy?

For a long time, you may have tried to ignore your money issues or thought that you would be able to handle them on your own. Each time you missed a payment or incurred another fee, you may have told yourself that you would make up for it next month. Unfortunately, that vicious cycle has only continued, and you are feeling overwhelmed by your debt.

Debt issues can affect anyone of any income level. Your issues may have started out because of something outside your control, like job loss or a medical emergency, or you may have spent a little too much over the holidays one year and never got back on track. Now, you want to know how you can resolve your debt issues.

Expenses that can throw a wrench in your budget

You were living within your means. You were able to pay your bills every month, buy groceries and gas and keep up with the minimum payments due on your credit cards. However, you didn't have much left over at the end of the month, so you never got around to opening a savings account or starting an emergency fund.

That's a problem. Having some extra money set aside isn't important just for unexpected medical bills, a job loss or cut in hours, the transmission in your car finally giving out or your furnace breaking in the middle of winter.

What happens when debt is discharged in Chapter 7?

If you're considering Chapter 7 bankruptcy, one of the terms you'll see a lot as you learn about the process is "discharge." That's a big step in a bankruptcy case. It usually happens approximately four months from the bankruptcy filing.

In Chapter 7, the bankruptcy trustee uses your nonexempt assets to pay off your creditors. A court order is then issued at the end of the process that relieves you of your repayment obligations for any remaining dischargeable debts.

Chapter 7 bankruptcy for businesses

Chapter 7 is traditionally associated with personal bankruptcy filings. However, in some cases, businesses can file for Chapter 7. It depends on how the business is structured.

Sole proprietorships are considered legal extensions of their owners. However, Chapter 7 can also be an option for partnerships and corporations. Sole proprietorships may also file for Chapter 13, which is also most often associated with personal bankruptcy. Let's look at Chapter 7 business bankruptcy.

Debt can harm your mental and physical well-being

Could your debt be endangering your mental and physical health? It might be, according to a report recently published by CarefulCents.com, a personal finance website. The site reported that consumer debt was linked not just to psychological distress but to poor overall health.

According to the report, credit card debt is more stressful than any other kind. One-fifth of respondents to a survey by NerdWallet said that their credit card debt had harmed their health. Two-fifths said it had impacted their general happiness.