Frequently Asked Questions
Standing Up for You and Your Rights
Chapter 7 bankruptcy—for both individuals and business owners who want to discharge most or all your debt
Chapter 13 bankruptcy—for individuals who do not qualify for a Chapter 7 and can pay some or most of their debt in a 3-5-year repayment plan
Chapter 11 bankruptcy—for businesses to restructure and reduce debt while they remain in operation (including small businesses through Subchapter V)
I can also defend you against some of the worst consequences of debt: foreclosure and creditor harassment. You may have more rights than you realize, and my job is to help you protect what matters most and hold creditors or lenders accountable for their unlawful actions.
Chapter 11 involves a reorganization of debt. As a business owner, you can use this type of bankruptcy to:
Continue operating your business
Stop pending lawsuits and collection actions
Reduce and restructure debt, potentially over the objections of your creditors
Catch up on rent and other bills
Avoid liquidating certain assets
Some benefits of Chapter 11 bankruptcy include:
The business can continue to operate while paying off debts
Chapter 11 bankruptcy lets debtors partially pay back unsecured debts
Debtors may be able to temporarily defer making certain rent or installment debts
Adjustment of interest rates
Debtors in chapter 11 reorganization may be able to borrow money while in reorganization to finance their reorganization
The automatic stay judgment gives you freedom from harassing creditors contacting you at home or at your business
Freedom to restructure secured debts where payments can be lower and spread over a longer period
Chapter 13 bankruptcy was designed for those who have the income needed to make payments through a 3-5-year payment plan. Your payments will be made through the Bankruptcy Court, where your trustee will pay your creditors according to your plan. Eligibility for a Chapter 13 filing is based on how much secured and unsecured debt you have; these levels cannot exceed a certain amount.
How much you will be required to repay will be dictated by how much income you earn, what your expenses are, and what types of debts you have accumulated. You may wind up paying only a portion of your unsecured debt after the full repayment period has ended because whatever is still owed at that point can be forgiven. However, certain priority debts must be fully repaid, such as tax bills, child support, and others.
Chapter 13 bankruptcy filings are designed for individuals. They are generally not available to businesses unless you are a sole proprietor. If you are a sole proprietor, you can file a Chapter 13 to reorganize both your personal and business debts. Unlike business organizations that have formed as separate entities, sole proprietors are responsible for both personal and business debt.
To better understand how a Chapter 13 filing can apply to you as a sole proprietor, I urge you to contact me at (914) 600-7161 or at jrufo@jamesrufolaw.com
Bankruptcy can be an effective option for homeowners who are facing closure. If you are behind on your mortgage payments and are facing the possibility of losing your home, bankruptcy may be a way to help you avoid foreclosure, or at least delay it.