Fees and bankruptcy in New York

Entering bankruptcy is a difficult decision, and it can be even more trying when you realize how expensive it can be. Bankruptcies cost money to file, and you may also have to pay legal fees and other debts during the process. Because of the expense, you may be questioning what is being done to reduce the load of expenses and to make bankruptcy more accessible to the common business. Chapter 11 bankruptcy is expensive, with some arguing that it’s simply too expensive for the protection it offers. Some amount of relief for those expenses has been sought from the American Bankruptcy Institute, which controls the costs of such bankruptcies. In a 332-page report on recommended reforms in bankruptcy law, the institute failed to offer solutions despite the fact that professional fees in cases can extend as high as hundreds of millions of dollars. It’s been recommended by over 20 professors, practitioners and judges that these fees be monitored and limited. In current practices, it’s been shown that fees can range from $1,000 an hour or more, which seems extensive. Some claim this is a modest percentage, because the companies themselves are worth enough to cover these high fees. The commission… Continue reading

You have rights as a debtor in New York

Are you being harassed by creditors who are calling at all hours or sending you letters in the mail every day? Being in debt is bad enough without the harassment that can come from those to whom you owe money. You have the right to stop this harassment, though, and with the right legal help and plan, you can get out of debt, too. Bankruptcy is not something to enter into without looking at all your options. If you’re considering it simply due to the harassment from creditors, wait before you do something drastic. You may be able to work with your creditors to get a settlement agreement. With some help, you can draft a legal document that binds you and the creditor to a payment agreement, helping you stop the phone calls. Payment plans are another option you may want to try. Whether you’re facing the IRS’s request for money or need to pay off an overdue credit card that has gone to collections, a payment plan can allow you to have the time you need to catch up. That way, your payments will be manageable, so you won’t have to worry about the cost of paying off your… Continue reading

What are some alternatives to Chapter 7 bankruptcy?

Chapter 7 bankruptcy, which is available in New York and the rest of the U.S., is used to liquidate property to pay back debts. There are several alternatives to this kind of bankruptcy, which is something to consider if you’re thinking of filing for Chapter 7. For example, if you run a business — partnership or sole proprietorship — then you may be able to avoid liquidation and to stay in business if you choose instead to file for Chapter 11 bankruptcy relief. With Chapter 11 relief, you can seek to adjust your debts by either reducing them or extending the amount of time you have to pay the money back. Interestingly, as a sole proprietor, you may also seek relief under a Chapter 13 bankruptcy. Chapter 13 bankruptcy is best used by those who have an ongoing income. For instance, if you have a job or are still in business with a profit, then this may be a choice you could go with. Realistically, Chapter 13 bankruptcy allows you to create a payment plan and to work off the debts instead of having to worry about foreclosure or liquidation techniques. If you’re still interested in filing a Chapter 7… Continue reading

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