Last week's blog post discussed a topic that concerns many people when they find themselves facing financial chaos - the potential loss of a treasured personal item during the bankruptcy process. As discussed, in many cases a New York resident can protect certain items of personal property from liquidation or sale due in part to bankruptcy exemptions. However, other legal processes can threaten a person's ownership of other significant property items, such as his car or home.
Certain items of personal property hold special value to their owners. Under Chapter 7 bankruptcy, a person may be required to sell off or liquidate items of property in order to secure sufficient funds to settle debts with creditors. The process of liquidation can force a person to part with items of property that carry special memories or sentiments with them.
Chapter 13 bankruptcy allows a New York consumer to reorganize his debts into payments that he can responsibly manage. The payments that a person makes toward his outstanding sums in Chapter 13 bankruptcy are only made out of his disposable income, which means that unlike under Chapter 7 bankruptcy he does not have to turn his property over to a bankruptcy trustee for liquidation in order to have money for the repayment of his creditors. Chapter 13 bankruptcy can, however, last for a period of years before it is resolved.
At present, many young adults in New York and the rest of the country are struggling to get ahead of one particular form of debt: student loans and other education-related financial obligations. Many students graduate from college with tens of thousands of dollars in debt and find themselves unable to break out on their own and live their lives as adults. As a result, those young grads end up living at home or in arrangements that do not support independence.