What Assets Are Exempt From Chapter 7
The exemptions vary from state to state although there are also federal exemptions. These exemptions allow you to keep certain assets to avoid being in a poor personal situation after the discharge.
Federal law prohibits liquidation of the following possessions:
- Jewelry totaling up to $ 1,600.
- Clothing, personal and household items: Up to $ 600 per item and up to $ 12,625 in total.
- Pets and crops if you have them.
- Motor vehicle up to $ 3,775 in total value.
- Up to $ 1,283,025 in Roth IRA and IRA retirement accounts.
- All retirement accounts that are tax-exempt including 401 and 403 plans. Also defined benefit pension plans.
- Work equipment and work tools up to a value of $ 2,375.
- Medical equipment and health aid.
- Unused home or real estate exemption up to $ 23,675 in equity.
- Compensation money such as recovery for personal injury, payment for lost profits, or wrongful death.
- Any type of federal benefit you receive such as Social Security, Veterans, or Unemployment benefits.
Note: In case of being married, all the listed values are duplicated. You may be interested in reading our article Does filing for bankruptcy affect your spouse to find out the effect of bankruptcy on your spouse.
Are your assets secure? Our expert New York asset protection attorney can guide you. Call us today for a private consultation.
Chapter 7 Bankruptcy In New York
Also known as debt liquidation, Chapter 7 bankruptcy will allow you to get rid of all of your dischargeable debt within a matter of months. This includes credit card debt and medical bills. As one of the top bankruptcy attorneys in New York, we will help you determine whether you qualify for Chapter 7 bankruptcy in New York. New York has a number of state specific issues that arise in Chapter 7 bankruptcy. You need a New York bankruptcy lawyer who knows how to navigate these issues.
Where Bankruptcy Doesnt Help
Bankruptcy does not necessarily erase all financial responsibilities.
It does not discharge the following types of debts and obligations:
- Loans obtained fraudulently
- Debts from personal injury while driving intoxicated
It also does not protect those who co-signed your debts. Your co-signer agreed to pay your loan if you didnt, or couldnt pay. When you declare bankruptcy, your co-signer still may be legally obligated to pay all or part of your loan.
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Contact A New York Bankruptcy Lawyer Today
Take back control of your financial future. Providing both immediate relief and long-term solutions, bankruptcy could be the answer you have been looking for. Our attorneys strive to make this process as easy as possible. Contact our law office today to schedule a free bankruptcy consultation! Call or reach out to your closest office:
Western District Of New York Requirements
The Western District of New York is one of the few districts in the nation that requires people filing Chapter 7 bankruptcy in New York without an attorney to provide the court three full copies of all bankruptcy forms in addition to the original signed forms upon filing their case. It has offices in Buffalo and Rochester but holds 341 meetings in a variety of locations within the district. If you have to update any information in your forms by filing an amendment, make sure to file this coversheet along with the amended documents, and follow the instructions regarding service on the bottom of the form.
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How Do I File Bankruptcy And What Happens When I Do
First of all, you need a good lawyer! But you have come to the right place. Melvin & Melvin has been representing clients in Bankruptcy cases since 1920. We are among the most experienced and skilled Bankruptcy lawyers in Upstate New York. We will get you through it.
Chapter 7 or Chapter 13?There are two major roads through personal Bankruptcy, which are called Chapter 7 and Chapter 13 you will have to choose one of them. For both of these alternatives there is a substantial amount of paperwork that is required to be done.
- You will need to know the names and addresses of anyone and everyone to whom you might owe any money, and you will have to be able to identify everything you own.
- You will have to answer in writing, and under oath, numerous questions about your financial position and your financial history.
- Before you file your case, and again after you file your case, you will have to take on-line classes teaching you about financial stability and responsibility.
- You will have to appear at the courthouse and answer questions about your assets and liabilities from a court-appointed trustee, and from any of your creditors who choose to attend.
We will guide you through each step in this process we will help you choose between Chapter 7 and Chapter 13, we will help you complete all the paperwork, and we will sit next to you at your meeting with the trustee. We will not let you down.
After your meeting with the trustee, Chapter 7 and Chapter 13 diverge.
Filing For Chapter 7 Bankruptcy Step By Step
The reality is that most Chapter 7 bankruptcy applicants never face any asset liquidation. They will be able to enjoy a clean and fresh start while keeping their possessions. This would be a general process:
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How Do I Get Started
Call us today and set up an appointment. Melvin & Melvin has the Syracuse bankruptcy attorney who can help you by answering questions and addressing your concerns. If your work schedule prevents you from meeting with us during regular business hours, we will be happy to schedule time for you after 5p.m. or on a weekend. If you have any questions or concerns, feel free to email us at or call at 422-1311.
Chapter 7 Bankruptcy: Forliquidation
Chapter 7 is the one of the most common types of bankruptcy for individuals .
Depending on the state that you are living in, there are various things you will not be forced to sell to complete this bankruptcy, but largely the liquidation of all of your assets and anything you own, of value, will be used by a court-appointed trustee to oversee the sale to be used to pay off your creditors.
Remaining debt that is unsecured, like credit cards and medical bills are typically erased, though unpaid taxes and student loans do not count towards this and are not erased.Important Chapter 7 Bankruptcy aspects to note:
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How Chapter 7 Bankruptcy Works In New York
Many people we speak with care about two things:
When comparing debt-relief options, Chapter 7 bankruptcy often wins in both categories over alternatives such a Chapter 13 bankruptcy, debt negotiation, debt management, and debt payoff planning. Lets explore those variables in greater detail.
Filing For A Subsequent Ny Bankruptcy
A debtor can file for NY bankruptcy as many times as needed or necessary. There are no restrictions in the federal bankruptcy laws or NY state law that prevent filing for a subsequent bankruptcy. In theory, someone could file for NY bankruptcy seven, eight, or even nine times. However, it is very unlikely that the same person will file for individual bankruptcy more than two times.
While there isnt any direct or explicit restriction on filing for subsequent bankruptcies, the Bankruptcy Act does place some restrictions on the timing and procedure for filing for a subsequent bankruptcy.
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What Alternatives Are There To Bankruptcy Chapter 7
There are alternatives to bankruptcy that can help you start over. Choosing the right method for you requires an analysis of your financial situation and the types of debt you face.
We can also help you in these cases. Feel free to contact our experienced New York finance attorneys today.
Repayment plan: Entering a debt management plan with an agency is an option. Unlike the debt settlement that we will see next, this plan involves paying off your debt over time. That is, in a more feasible way. As a general rule, only unsecured debt can be included in this plan.
Debt settlement: In this case you can negotiate directly with your creditors by contacting them to discuss the problem. Perhaps you can negotiate an affordable payment plan or renegotiate the full amount. As a general rule, it is usually paid in a lump sum.
Sell a valuable property: So that you can pay creditors: Be careful with this option as the money received may not be enough to settle all your debts. There is even a chance that you may need to file for bankruptcy.
Debt Consolidation: With this option you can get a debt consolidation loan to deal with your debts. This way you will only have to make a monthly payment to the new creditor. These loans usually have lower interest rates than what you are currently paying.
Note: You might be interested in checking out our article Debt consolidation vs bankruptcy.
Choosing The Right Bankruptcy Chapter For You In New York
Most people file either Chapter 7 or Chapter 13. If you don’t know the differences between the two, you’re not alone. The short explanation below and our handy Chapter 7 versus 13 chart will help clear things up.
Chapter 7 bankruptcy.Chapter 7 is often a bankruptcy filer’s first choice for several reasons. It’s quickit only takes a few months to complete. And it’s cheapyou don’t pay anything to creditors. It works well for those of us whose property consists of the essential items needed to live and work.
People with more assets could lose them, however, especially if they own unnecessary luxury items. For instance, you might have to give up your RV, baseball card collection, or timeshare in the Bahamaseven your house or vehicle if you have too much equity in it or you’re behind on the payments. Unlike Chapter 13, Chapter 7 doesn’t have a payment plan option for catching up on late mortgage or car payments. So you could lose your home or car if you’re behind when you file.
Caution for businesspeople. Be sure to learn about the ins and outs of small business bankruptcies. The principles discussed apply to consumers only.
What Debts Can Be Erased With Chapter 7 And Which Ones Cannot
Lets take a general look at what common debts a Chapter 7 bankruptcy can erase. These are known as dischargeable debts:
- Debts for failures in credit cards and debt collection agencies.
Chapter 7 bankruptcy cannot erase the following most common debts, known as nondischargeable:
- Most student loans.
- Tax debts and other penalties or debts that you owe to the government.
Will I Receive A Discharge In Bankruptcy
Certain types of debt automatically do not get discharged in bankruptcy, like certain taxes, student loans, most government fines and penalties, court restitution orders, domestic support obligations , and debts in connection with divorce decrees, among others.
For other types of debts, creditors have the right to file a lawsuit in the Bankruptcy Court, called adversary proceedings, against the debtor to determine if these debts are dischargeable. Creditors can sue debtors for a judgment in the court determining that their debts will not be eliminated in bankruptcy.
Here are some examples of debts that could be excepted from discharge with a bankruptcy court order:
- Actual fraud or false representations
- Consumer debts owed to a single creditor above the dollar limits specified in the Bankruptcy Code for luxury goods or services
- Debts for malicious injury of the debtor to another person or entity or property of another person entity
- Money or cash advances above the dollar limit specified in the Bankruptcy Code incurred within the time period specified in the Bankruptcy Code
- Renewals or refinancing of credit obtained under false pretenses
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Mail Documents To Your Trustee
You will receive the name and contact information for your bankruptcy trustee a few days after your bankruptcy case is filed. The trustee’s job is to administer your case, make sure that youâre not hiding anything, and review the circumstances surrounding your case to determine whether your creditors are entitled to a disbursement. Even though your tax returns are not actually filed with the court, you must provide a copy of your most recent federal income tax return to the bankruptcy trustee
Additionally, some trustees mail out a letter requesting certain other documents, such as paycheck stubs and bank account statements. Keep an eye out for any such request from your trustee and make sure you follow the instructions provided with respect to how and when to submit everything to the trustee’s office.
Print Your Bankruptcy Forms
If you have a bankruptcy lawyer assisting you, theyâll review the information with you and show you where to sign, then submit everything with the bankruptcy court via the court’s electronic filing system. If youâre without a lawyer, you unfortunately canât use the electronic filing system and have to submit a paper version of your bankruptcy forms to the court. To make sure you don’t miss anything, it’s a great idea to print a checklist like this one to keep you organized as you go through everything.
If you are in the Western District of New York, you have to bring three copies in addition to your original bankruptcy forms to the court. You can either print everything four times, or, better yet, print everything once, sign where necessary then make four copies three to file with the court and one to keep for your own records.
Folks in the Eastern District are required to bring one original and one copy to the court . If you are filing in either the Northern or Southern Districts, only your original is needed, but it’s a good idea to call the clerk’s office before heading down there to confirm that this is accurate. Either way, you should have a hardcopy of everything you give to the bankruptcy court for your own records, so you can refer to it later if needed.
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Filing For Bankruptcy In New York
Bankruptcy is a federal process so it works the same way in every state. However, you’ll use New York state law to protect your property. Although most states don’t allow filers to choose bankruptcy exemptions, New York filers are fortunate because they have two choicesthe state or the federal exemption system. You’ll want to review each list carefully and compare it to the property you own because you can’t use exemptions from both lists. If you decide to use New York’s state exemptions, you can also use the federal nonbankruptcy exemptions.
Our Exemption Analysis. If you have significant equity in your home, you’ll likely want to use New York’s exemptions. The homestead exemption amounts are far more generous than the federal exemptions. If you don’t own a home, you’ll need to look closely at the motor vehicle exemption, household goods exemptions, and other exemptions to decide the best list for you.
Will Bankruptcy Hurt My Credit Score Or Rating
Some creditors will actually consider you a better risk after Bankruptcy than someone who did not file Bankruptcy, because
- Your discharge frees you from old debts, improving your ability to pay new debts
- You cant get another discharge for several years.
Your Bankruptcy could appear on your credit report for up to ten years. It may be more difficult for you to obtain new credit as long as your credit report shows your Bankruptcy filing.
However, being credit worthy is like beauty, it is in the eye of the beholder. Some lenders and merchants will be less reluctant than others to extend new credit to you. In fact, from the point of view of many creditors, after you file Bankruptcy, you are a better risk for a new loan than someone who did not file Bankruptcy. This is because your discharge relieves you from the responsibility of paying old debts, which will improve your ability to pay new debts, and after receiving a discharge you will have to wait several years before obtaining another one. Department stores and gasoline companies are often the first lenders and merchants who extend new credit to people who have filed Bankruptcy. As you incur and repay new debt, you will build a new, and more favorable, credit history.
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