Many people in Rockland County view bankruptcy as, among other things, as a sure-fire way to lose their home to the bank that holds the mortgage. The reality is exactly the opposite. If a person is seriously delinquent on mortgage payments, a bankruptcy proceeding maybe the only way to prevent the mortgage holder from foreclosing on the mortgage and reclaiming the house.
The Time Hotel opened in Nyack in May 2016. The owners saw the property as a boutique hotel that would attract urban tourists and business travelers, but the plan has not succeeded. Several of the Hotel's investors filed an involuntary bankruptcy petition against the Hotel in July 2018 (This blog took note of the filing on July 26, 2018). The business bankruptcy has not been resolved, and the trustee set Friday, February 15, 2019 as the deadline for interested parties to file proposals for resolving the bankruptcy.
A previous post here reviewed Chapter 7 bankruptcy, which usually results in the discharge of most of a debtor's financial obligations, but does not necessarily protect a person's home from foreclosure. Also, many residents of Rockland County earn too much money to qualify for Chapter 7 relief. Chapter 13 of the Bankruptcy Code is the procedure that is most frequently used by persons who cannot pass the means test for Chapter 7 bankruptcy.
Most residents of Rockland County who have never filed a bankruptcy petition view the process as a long, dark journey during which they will be forced to sell most of their assets in exchange for having many of their debts declared uncollectible by the bankruptcy court. Individuals who are contemplating bankruptcy usually file a petition under either Chapter 7 or Chapter 13. A Chapter 7 petition is a request for the bankruptcy court to discharge and declare uncollectible most of their debts. A Chapter 13 petition asks the court for more limited relief by presenting a plan for reorganization of the debtor's finances that proposes paying those debts over five years. The two proceedings have many differences, and this post will explore Chapter 7.