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Frequently Asked Questions on Bankruptcy in New York

You don’t have to deal with money struggles on your own. At Goldberg & Lindenberg, P.C. in Manhattan, we are knowledgeable New York City bankruptcy attorneys who answer all types of debt relief questions, including:

Does bankruptcy eliminate all my debts?

Several types of debts are discharged at the end of a Chapter 7 bankruptcy, including credit card balances and medical bills. However, certain debt obligations usually remain, such as overdue taxes, back child support and money owed to repay student loans.

Will I lose my retirement funds when I file for bankruptcy?

Most standard retirement accounts are not affected by bankruptcy. If you file under Chapter 7, money you have in a 401(k), IRA or similar type of investment will not be taken to repay your creditors. Likewise, retirement funds are not included in available assets when developing Chapter 13 repayment plans.

Will bankruptcy stop the IRS from collecting tax debts?

Once you’ve filed for bankruptcy, the court enters an automatic stay and all creditors — including the IRS — are prohibited from making any collection efforts until the case is closed. However, most tax debts are not discharged in Chapter 7 bankruptcy, and once the process is completed, you will be required to satisfy your obligation.

Will I be able to rent an apartment or house after bankruptcy?

A bankruptcy remains on your credit report for seven years. While this can affect your ability to get an apartment or a home mortgage, bankruptcy should actually make it easier to make monthly payments because you are not overwhelmed by debt. Landlords are concerned about your ability to pay going forward, not what happened in the past.

Will bankruptcy stop the foreclosure of my home and/or the repossession of my car?

Home mortgages and car loans are secured debts, so while foreclosures and repossessions are delayed as long as the automatic stay is in place during a Chapter 7 bankruptcy, those proceedings will go once the case is closed. If you seek to hold on to your home and/or car, our firm can attempt to help you do so through a suitable Chapter 13 repayment plan.  

Will my employer be notified about my bankruptcy?

A bankruptcy is not automatically reported to the filer’s employer. Depending on the circumstances though, your employer might learn about your situation because your wages are being garnished or diverted as part of a Chapter 13 repayment plan.

How do I rebuild by credit after filing for bankruptcy?

You can go back to your normal life after bankruptcy. Making timely payments and watching your credit score to see if there are any errors can help you re-establish a strong financial foundation.

Should I withdraw all of the money in my bank accounts before filing for bankruptcy?

Each situation is unique. Some people choose to take money from accounts to purchase property that is exempted from liquidation during a bankruptcy proceeding. However, any transaction that appears to be a fraudulent attempt to shield money from creditors could lead to serious trouble. It’s best to discuss your options with an experienced bankruptcy lawyer before filing.

Once I file for bankruptcy, will the creditors stop calling?

Yes. Upon filing, the court issues an automatic stay, which prohibits creditors from contacting you and taking actions related to your nonpayment.