NY Attorney Elliot Schlissel on Filing Bankruptcy in New York

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Filing for bankruptcy has become commonplace in today's economy. However, it still remains a mystery to many debtors who might be able to benefit from it by eliminating or reducing their bills andrebuilding their credit. We asked one New York lawyer to explain 1) what bankruptcy is meant to accomplish, 2) in what situations someone should file for bankruptcy such as being unable to pay your bills, mortgage or having other financial difficulties, 3) who can file and 4) how long a bankruptcy stays on your credit report.

NY Attorney Elliot Schlissel

Elliot Schlissel, a New York bankruptcy attorney, recently sat down with us to explain what bankruptcy is all about. Here's what he told us:

Question: What is bankruptcy and what is it meant to accomplish?

Answer: Let’s talk about how bankruptcy came into being in the United States. At the time of the Constitutional Convention, there was discussion among the delegates forming our country as to setting up rules and regulations concerning bankruptcy. The United States Constitution specifically reserved all rights to make laws regarding bankruptcy to the federal government. The bankruptcy statutes are passed by Congress and signed into law by the President of the United States. This means we have a uniform federal statute that applies in all 50 states.

The significance of having a federal court handle bankruptcies is that there are 51 legal systems in the United States. Under federalism, there’s the 50 state legal systems and above it is the federal legal system. So when you file for bankruptcy in a federal court, it eliminates the jurisdiction of the state courts. You obtain a stay, or freeze, of all state court proceedings. Everyone who had any issues concerning your finances has to go into the federal system, which is a higher court, and deal with it there.

The purpose of bankruptcy is to give people a fresh start. In a capitalist system, you need an escape valve for people who have financial difficulties. Bankruptcy is that escape valve. So, the purpose of bankruptcy is to allow individuals, corporations or other entities to reorganize themselves financially so they can become productive members of a capitalist society and continue to prosper.

Question: What types of situations have you seen where someone files for bankruptcy on New York?

Answer: There are many reasons why people file for bankruptcy. People fall behind on their mortgage payments and they wish to save their house from foreclosure. Another instance involves individuals who have large amounts of credit card bills and just can’t make the payments. People who have huge medical bills and don’t have medical insurance or have inadequate medical insurance also file for bankruptcy. Simply speaking, a person generally utilizes bankruptcy when they have severe financial difficulties. The definition of bankruptcy is basically being unable to pay your bills as they become due.

Question: Who can file for New York bankruptcy?

Answer: Any individual, corporation, partnership, city, state or other institution can file for bankruptcy. It is available for all types of business entities and all individuals.

Question: How long does a bankruptcy stay on someone’s credit report?

Answer: Bankruptcy can stay on one’s credit report for as long as ten years.

If you would like to obtain additional information about filing for bankruptcy, contact an experienced bankruptcy law attorney to discuss your situation free of charge.

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