Should You File For Bankruptcy Before Your Divorce In New York
In New York and throughout the U.S., divorce and bankruptcy often go hand in hand. For many people, going through a divorce is one of the most financially and emotionally devastating experiences. Sometimes, a couples financial difficulties are the main cause of their divorce, and in other cases, the divorce itself becomes so costly that bankruptcy becomes necessary. Many people wonder when, and if, they should file for bankruptcy. Like many other legal matters, the answer is it depends.
How To File A Motion To Extend The Automatic Stay
If you want to extend the automatic stay, you must file a motion with the court. In your motion, you’ll explain why your previous bankruptcy was dismissed and why the court should extend the stay in your current case. You’ll have to prove that you filed the subsequent bankruptcy in good faith .
The specific procedures for filing a motion to extend the automatic stay depend on the rules in your jurisdiction. But the following are typically the most common steps you must take:
Find and complete the appropriate forms. Each bankruptcy district has forms for specific motions and notices. Check with your local bankruptcy court to find all paperwork related to motions to extend the automatic stay. But be aware that your jurisdiction may not have a standard form to fill out. In that case, you will have to create the motion and declarations. You can find your court’s website using the Federal Court Finder tool.
Obtain a hearing date and file the motion. In most cases, you will need to obtain a hearing date from the court before filing the motion . Keep in mind that the filer must complete the hearing before the stay expires, so typically you must file your motion immediately after filing your case. You’ll tell the court why your first bankruptcy was dismissed and explain why this case is filed in good faith. Then you’ll serve the paperwork on the bankruptcy trustee and your creditors .
How Do I Apply For Bankruptcy
The unfortunate reality of bankruptcy is that it will cost some moneymore if you hire legal help, which you probably should . All filings have to go through U.S. bankruptcy courts, where the cost to file is $335 for Chapter 7 and $310 for Chapter 13. However, you can ask the court to either waive your fee or let you pay with monthly installments. You’ll also have to take debtor education courses if you file on your own.
And that’s just the beginning. There’s a list of documents you’ll need to take care of, as well as the specific repayment proposal you need to submit for Chapter 13. That proposal gets reviewed by a court-appointed trustee, who contacts your creditors before approving your submission. Overall, neither filing is an easy process to handle on your own, and even minor mistakes on your end could be a setback for your case.
So, whether you file for Chapter 7 or Chapter 13 bankruptcy, it’s typically a good idea to hire a lawyer to help you petition. A bankruptcy attorney’s price depends on the nature and complexity of your filing, with Chapter 13 filings on the pricier end, but the price tag doesn’t necessarily mean a lawyer is out of the question for you. Discuss payment plans with potential attorneys, check out local pro-bono lawyers and legal aid offices, or use an online tool like Upsolve to cover your bases when it comes to bankruptcy.
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Should I File For Chapter 7 Or Chapter 11
Think of Chapter 7 as a funeral and Chapter 11 as a do-over.
Chapter 7 is used for both individual and business bankruptcies when the goal is to wipe out debt. The debt can go away, but you may also lose your assets.
If you wanted to restructure your business debt, you would consider a Chapter 11 bankruptcy and, more specifically, Subchapter 5 for small businesses. But you can always try to negotiate with creditors outside of a formal bankruptcy.
The only reason you need to use Chapter 11 at all is to deal with recalcitrant creditors, Mr. Keach said. If creditors wont negotiate with you, bankruptcy allows you to cram down a plan of restructuring.
There are other forms of bankruptcy filing: One, Chapter 13, is used for personal reorganizations, when you want to try to keep your assets and renegotiate the terms of your debt. Another, Chapter 12, oversees businesses in farming and fishing.
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Mergers And Acquisitions Law
One major corporate practice area is mergers and acquisitions . Through acquiring or merging with another company, a business might add property, production facilities or a brand name. A merger or acquisition might also work to neutralize a competitor in the same field. M& A attorneys provide legal counsel about proposed transactions. Typically, to evaluate a proposed venture, a team of corporate lawyers reviews all of the companys key assets and liabilities, such as financial statements, employment agreements, real estate holdings, intellectual property holdings and any current, pending or likely litigation. This is called due diligence. The lawyer can then assess the situation and raise specific issues with the client. Mergers and acquisitions lawyers consult with their clients on these questions, and together attorney and client determine which parties should accept current or potential liabilities. The lawyers then draft the merger or acquisition agreement and negotiate in detail the terms of each partys rights, responsibilities and liabilities.
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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Debtcom Howard Dvorkin Responds
Your story is complicated, Jo, but its not unusual. For two decades, Ive seen Americans sink slowly into debt as if it were quicksand. They grab at anything they think will save them. That does slow down the inevitable but it doesnt stop it.
I can give you some information that will make it easier to understand all the factors at play here. However, I recommend that you get in touch with someone that can help you understand how all of this applies in your specific financial situation.
#1: The credit report notation for your first bankruptcy should have fallen off years ago.
If you filed for bankruptcy in 2006, then the latest that penalty should have remained on your report is 2016. Even if you filed for Chapter 7, the public record notation should only remain for 10 years.
So, at a minimum, you should contact the credit bureaus to dispute why the item is still showing up on your reports. I recommend going to annualcreditreport.com to check your reports with all three bureaus .
If you dont know how to make a dispute, Debt.com offers a free guide to help you along.
#2: Enough time has passed that you can legally file bankruptcy again
The maximum amount of time that needs to pass between filings is 8 years. That means youre well past the point of time required between your first and second discharge. You should be able to file for Chapter 7 or Chapter 13 without the time limit between your filings being an issue.
The bottom line
Ny State Exemption Protects A Home If You Have Cash Federal May Be Better
Just about the only reason to use the state exemptions in New York is to protect a home. If you do not have a home, or you have a home with no equity, you would use the federal exemptions and would be entitled to keep about $10,000 in cash, since the New York list of exemptions has very little provision for cash.
If you have a home with equity and use the state exemptions, under New York law you cannot keep any cash at all. Cash includes money in the bank and any tax refunds you may be entitled to but have not received and spent yet. Thus a couple who has no house, or one with no equity, could keep, for example, $12,000 in cash and a tax refund of $7,500 . A couple that had a house would keep the house, but have to turn over the full $19,500 to the case trustee to be distributed to the creditors.
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Reasons To Hire A Lawyer For Church
Not every legal matter requires the use of an attorney. Fighting a speeding ticket and going to small claims courts are two examples. However, in many other situations involving a legal dispute, challenge, or deal, you may not wish to chance the risks of going it alone without the advice of an experienced lawyer who can help you out. In fact, while good legal representation may not be cheap, it can help get you out of a number of sticky situations. While each persons legal situation is different, there are times when you really should hire a lawyer. In fact, failing to work with an attorney in certain instances can lead to broken agreements, lost claims, or even prison time. Below are the reasons to hire an attorney.The Law is Complicated: If youre not a lawyer you probably have no business acting like one in certain instances. Even experienced lawyers typically do not represent themselves in court. Also, attorneys tend to specialize in one or more legal practice areas, such as criminal defense or tax law. A solid case can quickly unravel without the help of a trained and emotionally detached attorney. Similarly, failing to hire a lawyer when starting a business, reviewing a contract, or embarking on other endeavors with potential legal ramifications can result in otherwise avoidable pitfalls.
Two Cases Pending Within 12 Months
If you had two cases pending within the previous 12 months, you might be allowed to file a third case, but the automatic stay will not go into effect at all unless you ask the court to impose it.
To determine if you deserve the automatic stay, the court will look at several factors including:
- The number of cases you filed
- Whether your cases were dismissed because of non-payment, error , failure to file the required paperwork, or failure to cooperate with the trustee
- Whether you dismissed your case after a creditor filed a motion for relief from the automatic stay
- Whether your circumstances have changed since your previous case was dismissed
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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.
Getting A Lawyer To Help You With Your Bankruptcy
Bankruptcy is a specialized area of law that is very complex. And the issues are not always apparent or simple. The bankruptcy laws changed in October 2005 to discourage many people from filing for bankruptcy. So the law became more complicated. And there are more situations where a mistake can result in your case getting dismissed. If your case is dismissed, the bankruptcy court often imposes a penalty of 180 days before you can refile, and in this time period a lot can happen. This is why it is so important to have a lawyer advise you and help you with your bankruptcy.
Find a lawyer who can help you work through the issues, alternatives you may have, and consequences of your choices.
- Pick a lawyer with whom you are comfortable, one who will allow you to ask questions and give you responses that you can understand.
- Pick a lawyer who either specializes in bankruptcy or does a large part of his or her practice in the field.
- Ask questions until you understand what your choices are.
- Don’t be afraid to interview a lawyer and leave without hiring him or her.
If you decide to represent yourself in bankruptcy court, read a guide for Filing for Bankruptcy Without an Attorney.
To find a good bankruptcy lawyer:
- Check state bar groups and specialization/certification programs for bankruptcy lawyers in your community.
- Ask other lawyers or tax preparers you know for recommendations.
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In A Chapter 7 What Happens To Property I Cant Protect From My Creditors
In a Chapter 7, property you cant protect from your creditors is sold and the money is used to pay your creditors. If property you own free and clear is worth more than you can protect from your creditors, you should probably not file a Chapter 7. If you have property you cant protect from your creditors, you may want to think about filing a Chapter 13. If you think you have more than $25,000 in property for an individual or $50,000 for a married couple, you should consult counsel prior to filing bankruptcy to see if there are additional exemptions which may protect the rest of your property.
Does Filing For Bankruptcy Ruin Your Reputation And Life
No and even less if it also frees you from debts. Although you can run away from creditors for a while, it turns out to be very stressful in the end. Bankruptcy will allow you to start over and stop running away.
The goal of bankruptcy is to give a second chance to people who made a financial mistake and with that goal in mind, you should approach it.
Note: Do you have an Estate Plan? Are your assets secure? Is your family protected? Call our New York estate planning attorney today.
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What Happens After Bankruptcy And How Does It Affect Your Credit Report
On our website you can read an entire blog post about the consequences of bankruptcy. The following are just a few indicators you may experience once your bankruptcy process is completed.
- Many people will see their credit score improve if they were below the 600 range.
- Individuals, in general, are relieved to see that their dischargeable debts no longer exist.
- Bankruptcy makes you reflect on your financial situation and you will feel a fresh start.
- Bankruptcy stays on your credit report for 10 years. However, by improving your score, you can get approved for a mortgage in a few years.
Note: You may be interested in reading How to find out all my debts, How to raise your credit score fast and Can you go to jail for debt.
How Bankruptcy Works In New York
In most respects, filing for bankruptcy in New York isn’t any different than filing in another state. The bankruptcy process falls under federal law, not New York state law, and it works by unwinding the contracts between you and your creditorsthat’s what gives you a fresh start.
But New York’s laws come into play, too, in a significant way. They determine the property you can keep in your bankruptcy case. You’ll also need to know other filing information, which we explain after going over some basics.
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