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Note to New Yorkers: “Charged Off” Debt is NOT “Zombie Debt”

“Zombie debt” is a debt you no longer owe that a collector has bought from a creditor nonetheless—for a fraction of the price. The collector then tries to enforce the debt you no longer owe, hoping you’ll repay it. Elsewhere, you may have heard the term, “charged off debt,” and wonder if it’s the same

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How to Deal with “Zombie Debt” Collectors in New York

At some point, if it believes it will never be repaid, the original bank that makes a loan will sell it to a debt collection company. The loan will be bundled with numerous other ones in the sale, and the price will be a fraction of the total value of the loans. Because of the small

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How to Use Bankruptcy to Reduce Auto Loan Payments in New York

Many New Yorkers have difficulty with auto loans. In some cases, the car’s value has depreciated significantly, making resale difficult, and in others the car was over-financed to begin with, which is more common when the dealership plays the role of lender as well. Unlike the underwater mortgage, the bankruptcy code offers solutions that are

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4 Steps to Escape Paying Income Tax on Discharged Debt in New York

Receiving a discharge from the bankruptcy court  in New York is the goal of New York bankruptcy petitioners. It should be a relief so that people can continue their lives. Although, occasionally creditors claim the loans you discharged are forgiven instead; that means you’ll have to pay income tax on the forgiveness. What does this

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Pop Quiz on Discharging Unsecured Debt in New York

This quiz has a single multiple choice question. Suppose you have more credit card debt than you can pay down?  This is not an uncommon situation—but let’s add a twist: one of your creditors is a family member. The debt situation cannot be resolved without bankruptcy, but you don’t want to create discord among your

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When the Social Security Administration Is a Creditor in Your New York Bankruptcy…

It doesn’t happen often, but when it does people don’t complain: sometimes, Social Security overpays recipients. How can this happen?  Here’s a possible scenario: A person files for disability payments from the Social Security Administration (SSA). The payments come in, and the person, now the recipient, deposits them. The recipient’s health improves, allowing him or

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New York Bankruptcy and Immigration Status

One doesn’t need to be a U.S. citizen to file bankruptcy. In fact, people in the country illegally can file too, but that’s uncommon and should be discouraged. Between these two categories, though, are non-citizens who are in the country legally. These people may be concerned that filing bankruptcy may affect their immigration status. Short

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How to Ensure You Don’t Lose Your Car in a New York Chapter 7 Bankruptcy

Like all chapters, Chapter 7 of the Bankruptcy Code requires petitioners to list their assets, liabilities, and creditors. Part of the purpose of doing so is candor, but importantly, it tells the Trustee of your bankruptcy estate what he or she can liquidate to pay off creditors before your discharge. One asset people must list,

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How Gifts and Loans Work in Chapter 7 Bankruptcy in New York

New Yorkers filing bankruptcy often choose Chapter 7, given its speed and effectiveness at discharging unsecured debt, especially credit card debt. Although Chapter 7 can be quite beneficial, not everyone is allowed to use it. People filing bankruptcy must pass a “means test” that requires their income over the previous six months to be below

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