A recent study conducted by economists from the Federal Reserve Bank of New York and Columbia University suggests that the costs associated with filing for personal bankruptcy could cause some people to become insolvent. The researchers looked at the impact that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act has had on bankruptcy filings.
New York homeowners with second mortgages may want to know about a case being discussed by the Supreme Court regarding how bankruptcy should affect the status of "underwater" second mortgages. The case involves allegations that the current system, which is governed by the precedent established by a 1992 Supreme Court decision, allows the lien holders of second mortgages to prevent some borrowers who have declared bankruptcy from avoiding foreclosure.
People who file for bankruptcy in New York often worry about what assets might be seized after they file. Although some people may be tempted to transfer valuable assets to family members and friends in an effort to protect them, this activity could be viewed as fraud. A person filing for bankruptcy may actually have a better chance of protecting assets that are in their own name.
According to a study done by an attorney, 40 percent of holders of student loans were able to have those obligations discharged in bankruptcy court if they attempted to do so. Furthermore, although there are thousands of good candidates for full or partial discharges, the vast majority do not avail themselves of this opportunity. This is partially because of the widely-held perception that student loan obligations cannot be discharged in bankruptcy.
While filing for bankruptcy may result in a discharge of many different types of debt, tax obligations are only released under certain circumstances. For example, being freed from tax debts is typically more likely when the individual is filing for Chapter 7 bankruptcy. Other factors that might affect the discharge might be the age and type of the tax.
Individuals in the state of New York may have their homes foreclosed upon if they miss a mortgage payment. A payment is considered late if it is still outstanding even a day after the due date. After 16 day, a late charge may be assessed on the payment that is still outstanding. When 30 days have passed, it may be possible for a lender to send out a pre-foreclosure notice.
Constant contact from debt collectors can be frustrating or even frightening to people in New York. Because of abusive practices collectors have utilized, their actions are regulated by the Fair Debt Collections Practices Act, a federal law that prohibits certain abusive practices and outlines what collectors may and may not do.
When an individual files for bankruptcy, he or she may have to liquidate assets to pay off debt. While the liquidation process is an important part of bankruptcy, there are some assets that individuals need to have to survive. Fortunately, the New York bankruptcy code makes certain exemptions that allow individuals to retain ownership of specific assets.
Due to some common misconceptions about bankruptcy, many New York residents who could benefit from filing do not. Many believe that bankruptcy is an expensive process that will drag on for years and leave them without anything to their names. However, if completed correctly, filing for bankruptcy can be the thing that puts a families back on track financially.
Many New York residents know that credit card debt can become overwhelming. Using a credit card wisely, authorities say, is a way to purchase what is needed even when cash is low. The importance of knowing and restricting purchases to an amount that is repayable makes the difference between good buying habits and crushing debt.