General Bankruptcy Information

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 If your case has been assigned to Randy J. Schaal, click here for list of documents to send. 

There are many different chapters of the Bankruptcy Code. 

Randy J. Schaal makes the commitment to stay abreast of changes in the Bankruptcy Code and court decisions which affect his practice. 

He spends on average, 13 to 15 hours attending Continuing Legal Education courses, continuing his education in this one practice of law a year. When a major change in the code is in process, such as the 2005 amendments, he had over 100 hours of continuing education courses dealing with those amendments. For instance, he followed the New York State opting-out change in exemptions bill that Governor Patterson signed on December 22, 2010. There was a 30-day waiting period for the bill to take effect; thus, the right to take federal exemptions and the changes in the amounts of the New York State exemptions were effective on January 22, 2011. 

Randy also makes the commitment to know his clients and give them personalized service. You will meet with him, not a paralegal or secretary. All initial informational meetings are handled by Randy. Free initial consultations are available, but not on the phone or over the internet. Randy sets aside a half hour of time for a face-to-face consultation, with no obligation to return. 

 A Chapter 7 bankruptcy is a liquidation, however, it is only a liquidation of your non-exempt property. Exempt property are items that you keep. There are state and federal exemptions. By recent amendment, New York State allows you to choose if you want to take state or federal exemptions. In some cases, New York State exemptions are desirable because of the homestead exemption. If you take the state exemption, it is $102,400 of equity. Equity is the difference between the value of the real property and whatever is owed on the mortgage. Under New York State exemptions, you can only take the cash exemption if you do not have a homestead. The New York State cash exemption, if you do not have a home, is $5,000 plus a wild card exemption of $1,000. To file a Chapter 7 bankruptcy, you must meet the means test requirements. You do not make any monthly payments in a Chapter 7 bankruptcy except on secured obligations that you want to keep. 

Retirement funds are also exempt. 

Up to $3,000 in tools of the trade are also exempt. 

Personal injury actions are exempt up to the amount of $7,500. 

The federal exemptions only have a homestead exemption of $27,900, but there is a Wild Card federal exemption to allow up to $15,425 per person ($1,475 per person plus any unused portion of homestead up to $13,950), which is an advantage. Thus, whichever you take has to be looked at on a case-to-case basis. 

Both a Chapter 7 and Chapter 13 bankruptcy ends in a discharge of bankruptcy unless a creditor objects to discharge based on fraud. There are some debts that are not dischargeable, such as: most taxes, child support, alimony, most student loans, court fines, court restitution, and personal injury caused by drunk driving or under the influence of drugs. A discharge is why you file a bankruptcy because it makes you not liable for those debts. For instance, if your home has no equity and it is being foreclosed on, if the judgment creditor gets a judgment for an amount greater than the value of the house and you file a Chapter 7 bankruptcy, the discharge prevents collection of any deficiency judgment above the value of the house. A Chapter 7 bankruptcy does not prevent a foreclosure, but it does slow it up slightly because the lender has to make a motion in U.S. Bankruptcy Court to lift the automatic stay. 

For instance, a home with a mortgage is a secured loan. If you do not make the payments in a Chapter 7 bankruptcy, you cannot keep the real property. However, the Bankruptcy Code gives you certain options. 

1. The first option, when property is secured, is to reaffirm, wherein you promise to continue to make the monthly payments and you do so. 

2. The second option is to surrender the property, give up the property, and not make the payments. For instance, if you have an old car with a lien exceeding its value and want to surrender it, you can stop making payments, and the lender can only request to lift the automatic stay to repossess the vehicle. They couldn't seek a deficiency judgment against you. 

3. The last option for property that is secured is redemption, wherein you can buy it out for its true cash value. 

You can only file a Chapter 7 bankruptcy once every eight years. The filing of a Chapter 7 is on your credit history for up to 10 years. Having said that, we live in a strange world. Six months after you receive your discharge, which comes out no later than four months after you file, you can get new credit cards and secured car loans. In as little as three years, you will re-qualify for a mortgage. 

If you are interested in further information on a Chapter 7 bankruptcy, please call 315-363-6888 to make an appointment for a free consultation with Randy J. Schaal.