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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Five Scenarios Where Chapter 7 Bankruptcy Is Not the Best Solution to Debt Problems

Posted on Thursday (August 13, 2009) at 7:30 am to Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Debt Negotiation

Five Scenarios Where Chapter 7 Bankruptcy Is Not the Best Solution to Debt ProblemsWritten by Craig D. Robins, Esq.
Although a bankruptcy filing is often the best solution to an unmanageable debt problem, some consumers should not to avail themselves of Chapter 7 bankruptcy relief. 
Here are five types of situations where Chapter 7 bankruptcy may not be a realistic option:
Too Many Unprotected Assets.  When filing for bankruptcy, you can keep and protect certain assets.  Some consumers have a significant amount of non-exempt assets that could be forfeited to a bankruptcy trustee.   See:  Bankruptcy Exemptions in New York .
Too Much Income.  In order to be eligible to file for Chapter 7 bankruptcy, a consumer must pass the means test.  Having a family income that is very high can preclude Chapter 7 eligibility.  See:  The Means Test is Often the Key to a Successful Chapter 7 Bankruptcy Case .
Transferring Assets to Family Members.  If you give away a valuable asset to a family member, then under certain circumstances the bankruptcy trustee can pursue the relative to try to get the value of the asset back.  See:  Why Consumer Debtors Can’t Transfer Assets Like a House or Car Before Filing Bankruptcy on Long Island .
Most Debt is Non-dischargeable.  Some debts cannot be eliminated in bankruptcy.  They include most income taxes, student loans, and matrimonial obligations.  A chapter 7 filing will not solve these types of debt problems.  See Student Loans and Bankruptcy   and  Matrimonial Fundamentals Under the New Bankruptcy Laws .
Recent Payments Were Made to Family Members.  If you borrowed money from family members and paid them back just prior to filing, you should not file for bankruptcy for a period of time.  Such payments are known as preferential payments, and if made in the one-year period prior to filing, can be set aside.
Even if Chapter 7 is not a possible solution under one of these scenarios, there are still other ways to manage debt.  Some alternatives include Chapter 13 bankruptcy and negotiating settlements with creditors.  Meeting with an experienced Long Island bankruptcy attorney will help you ascertain whether a bankruptcy filing is for you.
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Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »


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Craig D. Robins, Esq.
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