How Can I Get Rid of Debt? Your Options Explained
Debt can accumulate for many reasons—medical emergencies, job loss, overspending, or unexpected financial obligations. In a fast-paced city like New York, New York, mounting debt can feel like a daily burden.
Whether it’s credit card balances, personal loans, or unpaid medical bills, falling behind financially can impact every aspect of your life, from your credit score to your mental well-being. If you’re wondering how to move forward, several legal and financial strategies may help you regain control and chart a sustainable path ahead.
Our attorneys at Todd E. Duffy PLLC help clients throughout New York, New York, consider their full range of legal options when dealing with overwhelming debt. As experienced debt attorneys, we guide individuals and families through court-approved and out-of-court solutions designed to reduce or eliminate debt responsibly.
Bankruptcy Filings in New York, New York
For many individuals facing unmanageable debt, filing for bankruptcy may be one option. Bankruptcy is a legal process that can either eliminate debt or create a structured plan for repayment under court supervision. In New York, both Chapter 7 and Chapter 13 bankruptcies are common options.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows for the discharge of most unsecured debts, including:
Credit card balances
Personal loans
Medical bills
To qualify for Chapter 7, filers must pass a means test, which compares their income to the median household income in New York. If they qualify, non-exempt assets may be liquidated to pay creditors, and the remaining debt is typically discharged.
Chapter 13 Bankruptcy
Chapter 13 allows debtors to propose a repayment plan. This type of bankruptcy is often pursued by those who have a regular income and want to keep secured assets like a home or car.
Instead of liquidating property to pay creditors, Chapter 13 consolidates debts into an organized schedule, allowing the filer to make manageable monthly payments. It can also stop foreclosure proceedings and give homeowners time to catch up on missed mortgage payments while retaining ownership of their property.
Chapter 13 is beneficial when:
The debtor is behind on mortgage payments
The individual has valuable non-exempt property
There’s a need to consolidate and structure payments
Filing for either type of bankruptcy creates an automatic stay, which temporarily halts wage garnishments, foreclosures, and collection efforts.
Non-Bankruptcy Debt Relief Options
Not everyone wants or qualifies for bankruptcy. Several alternatives exist that may reduce or eliminate your debt without a court filing. These options can be less disruptive to your credit and finances, and they often allow more flexibility and privacy. Common non-bankruptcy solutions include debt settlement, debt management plans, and consolidation loans.
Working with debt attorneys to explore these strategies can help you understand the risks and potential benefits of each approach while tailoring a plan that suits your financial goals and current obligations. These methods may offer a more practical solution for those with steady income or manageable debt loads.
Debt Settlement
Debt settlement involves negotiating with creditors to pay a lump sum that is less than the total amount owed. This can be done independently or through a third-party company, although working with qualified debt attorneys like those at Todd E. Duffy PLLC often leads to better outcomes and fewer risks.
Settlements typically require:
A lump-sum payment
Demonstrated financial hardship
Willingness of the creditor to negotiate
Debt Management Plans
These plans are offered by credit counseling agencies and involve:
A structured repayment plan
Lower interest rates
Fee waivers from creditors
While not legally binding, these plans can help borrowers pay off debt in a manageable way over time.
Debt Consolidation
Debt consolidation involves combining multiple debts into a single loan, often at a lower interest rate. This can make monthly payments more manageable and reduce the total interest paid over time.
Methods of consolidation include:
Personal loans
Balance transfer credit cards
Home equity loans
Debt consolidation is often suitable for borrowers with stable income and fair-to-good credit scores.
Student Loan Debt Relief
Student loan debt often requires a different strategy due to specific federal protections and limitations. In some cases, federal loans can be discharged under extreme hardship through bankruptcy, although it’s difficult to obtain. More commonly used options include:
Income-Driven Repayment Plans
These plans adjust monthly payments based on income and family size. After 20 to 25 years of qualifying payments, any remaining balance may be forgiven.
Public Service Loan Forgiveness
Those working in qualifying public service jobs may be eligible for loan forgiveness after making 120 qualifying monthly payments under a qualifying repayment plan.
Debt attorneys at Todd E. Duffy PLLC can help determine eligibility and guide applicants through the necessary documentation.
Foreclosure Defense and Mortgage Relief
When mortgage debt becomes unsustainable, homeowners may face foreclosure. New York law requires lenders to follow specific procedures, including offering a mandatory settlement conference for certain residential properties.
Options that may help homeowners keep their property include:
Loan modification
Forbearance agreements
Short sales
Deed in lieu of foreclosure
Wage Garnishment and Creditor Harassment
When debts are unpaid, creditors may seek a court judgment to garnish wages or place liens on property. In New York, wage garnishment is capped at 10% of gross weekly income or 25% of disposable earnings—whichever is less (New York State Unified Court System).
Debt attorneys can help by:
Contesting improper garnishment
Seeking exemption claims
Filing motions to vacate default judgments
Negotiating lump-sum settlements to stop garnishments
They may also act when creditors violate consumer protection laws such as the Fair Debt Collection Practices Act (FDCPA).
Medical Debt Relief
Medical expenses are one of the leading causes of debt in the United States. In New York, hospitals are required to offer financial assistance policies for low-income patients.
Options for Medical Debt Resolution
Requesting an itemized bill to verify charges
Applying for hospital financial aid
Negotiating a payment plan
Challenging incorrect insurance denials
Credit Report Repair and Debt Disputes
Errors in credit reporting can lower your credit score and make it harder to recover financially. Under the Fair Credit Reporting Act, you have the right to:
Dispute inaccurate information
Request corrections
Obtain a free credit report annually at AnnualCreditReport.com
Debt attorneys can help remove inaccurate accounts, negotiate removals following settlement, and provide written responses to collection notices.
Frequently Asked Questions
Can All Types of Debt Be Discharged in Bankruptcy?
No. Certain debts, such as student loans (except in rare hardship cases), child support, alimony, and most tax debts are generally non-dischargeable.
How Will Bankruptcy Affect My Credit?
Bankruptcy will initially lower your credit score, but many people experience improvement within one to two years after their debts are discharged and they begin rebuilding their credit responsibly.
Can I Be Sued for Old Debt?
Yes, but only if the debt is still legally enforceable. Even if the statute of limitations has passed, some collectors may attempt to collect. It's important to consult a debt attorney to understand your rights.
Do I Need to Go to Court for Debt Settlement?
No. Most debt settlement agreements are reached out of court. However, if a creditor sues, court appearances may be necessary. Debt attorneys often represent clients in settlement negotiations or defend them in litigation if needed.
Is Debt Relief Taxable?
Sometimes. Forgiven debt may be reported as taxable income, although exceptions exist for debts discharged in bankruptcy or due to insolvency.
Contact Us Today
If you're overwhelmed by debt in New York, New York, our attorneys at Todd E. Duffy PLLC can help you assess your options and take the next step toward financial recovery. We serve clients in New York, New York. Contact us today for a confidential consultation to discuss your debt relief options and begin the process of regaining financial stability.
