When a business chooses to file for bankruptcy, it has some control over the format it may use. While some New York entities may prefer to use bankruptcy as a way to shut their doors through the Chapter 7 process, others may prefer to use Chapter 11 to reorganize and remain active businesses. However, despite a business's initial choice for the format of bankruptcy it wants to use to get itself out of financial stress, it may have to change paths if its creditors are able to petition for a conversion.
Before a person establishes his own credit history, it can be difficult for him to secure loans and other financial opportunities that require him to make full and timely payments. For example, a person may not be able to get a mortgage to buy a house if he cannot demonstrate that he will responsibly fulfill the terms of his lending agreement. When a lack of credit history or other barrier prevents a New Yorker from securing a needed loan, he may have to recruit a trusted associate or family member to cosign on the loan paperwork.
There are bankruptcy laws in both the federal United States Code as well as in the New York State Code. Each set of laws provides individuals who file for bankruptcy with exemptions that they may use to protect certain items of property from liquidation during the Chapter 7 bankruptcy process. In New York, a person has the right to choose which set of exemptions he prefers to use when engaging with personal bankruptcy in this form.
The CARD Act, also known as the Credit Card Accountability Responsibility and Disclosure Act, was enacted in 2009 in an effort to provide consumers with protections from predatory credit lenders. This post will touch generally on some of the goals and policies of the CARD Act, but individuals with specific questions about the law may choose to discuss their issues with their New York-based bankruptcy and debt relief attorneys.
When a New York business enters the Chapter 11 bankruptcy process, it is afforded a number of protections. One of those protections prevents the business's creditors from initiating litigation against it for the collection of the balances owed to the creditors. In essence, bankruptcy puts a hold on any actions against a business while it works out a way to restructure and become financially viable for its continued operation.