Posted: March 19, 2020


     In these uncertain times, many people are justifiably concerned about the long term financial harm that Coronavirus will have on their lives.  Bankruptcy can provide relief from what appears to be insurmountable debt and give an economic fresh start in life.  Under Federal Law, people have the right to seek bankruptcy protection from their creditors.

Under Chapter 7, people can seek a discharge (forgiveness) of most types of debt.  Typically, people seek a discharge to eliminate unsecured creditors such as medical debt and/or credit card debt.  Under certain strict guidelines, aged tax debt can also be discharged.  Additionally, the underlying personal debt a person has related to mortgages or car loans will be discharged.  This does not mean, however, that the lender loses its rights with respect to the collateral.  For example, an individual can discharge a loan obligation, but the house is still encumbered (secured) by the mortgage.  Under Chapter 7, your assets may be at risk to be sold in the bankruptcy to generate payment to your creditors, so you must be very careful in analyzing your potentially exposed assets as compared to your debt.

     Under Chapter 13, people can seek to reorganize their debt by use of a 3 to 5 year payment plan.  This type of bankruptcy is typically used by individuals who suffered a short term economic harm that caused them to fall behind on their mortgage payments.  By filing Chapter 13, a person can stop the pending foreclosure action and submit a plan of reorganization to pay the mortgage arrears over a term of years, as well as paying unsecured creditors a small portion of the debt owed in full satisfaction.  Chapter 13 requires a person to remain current on all post-filing mortgage payments, as well as the plan payments, or the case may be dismissed.

     It is critical that you consult with an experienced bankruptcy lawyer to go over all of your options and to understand your rights.



For assistance with all Bankruptcy matters, please contact us:

Ken Kirschenbaum, Esq.    (516)-747-6700 Ext. 301 or

Stacy Spector, Esq.    (516)-747-6700 Ext. 304 or