How Chapter 13 Payment Plans Work
Under Chapter 13, you propose a plan to repay your creditors all or part of what you owe, usually using your future income. If the court approves your plan, you will make payments on your debts for either three or five years. The time and amount of your repayment plan will depend on:
- your income
- the kinds of debt you have
- the value of the property you own, and
- your expenses.
If your current monthly income is less than your states median income for your family size, your plan will usually be for three years. If your income is greater than the state median income, you must usually propose a five-year plan.
How Do Lawyers Get Paid If They Lose A Case
Lawyers typically charge for their time regardless of whether they win a case. Sometimes, the losing party is ordered to pay the other partys lawyer fees on top of their own. Some lawyers also work on contingency, meaning they will take a percentage of the awarded amount only if they successfully win the case.
Before hiring a lawyer, make sure you understand their fee structure.
Get On With Your Life
Youll undoubtedly be eager to get your life back on track after your bankruptcy filing we hope you can breathe easier and start to rebuild when your bankruptcy is done. Occasionally, things do pop up after the end of a bankruptcy case that you’ll need to deal with, from discovering new non-exempt property to dealing with a creditor that tries to collect a debt discharged in your bankruptcy. If questions come up after your case is over, know that you can get answers.
If youve been working with a lawyer during your bankruptcy case, you can ask for additional guidance. You can also find information about dealing with post-bankruptcy issues in How to File for Chapter 7 Bankruptcy or Chapter 13: Keep Your Property and Repay Your Debts Over Time.
Counties in New York
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Complete Your Debtor Education
Before receiving a bankruptcy discharge, there are a couple of courses that are typically required. The bankruptcy code calls these requirements a debtor education program. In most cases, you may be required to take a course before you file your paperwork and go to a hearing with the bankruptcy court.
How Long Does A Bankruptcy Take
While bankruptcy is an option that has been able to provide a fresh start for many individuals, families, and businesses it is a serious decision that should be carefully considered with the assistance of a financial advisor or attorney who can help determine if bankruptcy is the proper course of action.
Prior to 2005, those filing bankruptcy could choose the type of bankruptcy they preferred and most elected to file Chapter 7 straight bankruptcy over Chapter 13 . However, rules enacted in 2005 now requires those filing Chapter 7 to pass a “means test” to qualify, they must earn equal to or less than the average monthly income for a family of their size in their state.
In addition, before you can file for Chapter 7 or Chapter 13 bankruptcy, you are now required to complete credit counseling with an agency that has been approved by the United States Trustee’s office.
While bankruptcy plays a vital role to help rescue individuals and businesses, it is important to recognize that it’s not the only debt relief option.
This site is a free educational and motivational resource to help New York residents. The free do-it-yourself educational resources, articles, and videos on this site, as well as links provided to state and federal hardship assistance are for informational purposes only and not to be construed as legal advice.
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When You Might Not Need To File For Bankruptcy
If You’re Judgment Proof
It youre truly broke, you may be what the law calls judgment proof. This simply means that creditors cant grab your property or your salary because theres nothing the law allows them to take.
You can check the exemption laws for New York to learn what property your states law protects. But keep in mind that exemption laws dont shield property from all types of debts or all types of creditors. For instance, exemption laws typically wont protect your property if you owe child support or back taxes. And if you bought property and pledged it as collateralcommon for car loans and mortgagesthe lender can take the property regardless of any exemption law.
If youre judgment proof, instead of filing for bankruptcy, your best option may be to ride out the hard times and do nothing for now.
If Your Creditors Are Willing to Negotiate Payment Plans or Settle Your Debts
Your creditors may be willing to set up reasonable payment plans or even to settle your debts for less than you owe. For obvious reasons, this can be a stressful processbut you may be able to get help from a nonprofit credit counselor or debt management agency. You can find a list of qualified agencies on the website of the United States Department of Justice.
If Bankruptcy Can’t Cancel Your Debts
There are some kinds of debts that bankruptcy simply cant erase. These are called “nondischargeable” debts. This generally includes child support, most student loans, and most tax debts.
Dealing With Residual Financial And Legal Issues
In many cases, creditors may overlook a debt discharge and might continue to try to collect a released debt or report late repayments on your credit rating. Your lawyer will certainly recognize just how to request the court for injunctive alleviation to stop this kind of scenario.In addition, personal bankruptcy will certainly not constantly clear up all of your monetary issues. As an example, bankruptcy will certainly not discharge the equilibrium of your home mortgage, and some individuals still face the opportunity of foreclosure during and after a bankruptcy case. Some bankruptcy lawyers in Rochester, NY, United States likewise take care of foreclosure defense. Your attorney will certainly be able to negotiate for a feasible home mortgage adjustment or seek various other services that permit you to maintain you home.
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A Local Rochester Ny Bankruptcy Attorneys Can Help You Choose The Right Bankruptcy Plan For You
No one who owns a business can foresee every bump in the road. The Coronavirus is having a massive, negative impact on thousands of Rochester, NY businesses because no one saw a pandemic coming. The effect has been staggering, and you certainly arent responsible for how COVID-19 has damaged your business. Rather than dwell on how this happened, stay in front of it.
Fill out the contact form to be put in touch with a bankruptcy attorney in the Rochester, NY area. Your information will be passed along, so they can schedule a time to talk via telephone and work out the best solution for your bankruptcy.
The attorney will explain the process, ask some critical questions to determine whether Chapter 11 or Chapter 13 bankruptcy is your best option, then prepare and file the necessary paperwork to get the process started. They will work with you and the bankruptcy court to ensure you can get your business back on track during these trying times.
Making The Decision: Should You File For Bankruptcy
Bankruptcy Self-Help Resources
For about $30, you can purchase one of Nolo’s books: How to File for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time. Either book will walk you through a self-analysis of your situation and explain your options in plain English. These books offer step-by-step discussions of Chapter 7 and Chapter 13 bankruptcy, including exempt property, keeping your home, and how to prepare and file your bankruptcy forms. They also alert you to situations that are particularly troublesome and should not be handled without an attorney.
This website supplements the information in Nolos bankruptcy books by providing quick access to bankruptcy services and information for your county.
Getting Professional Help
If you just need help with preparing the forms, you can hire a bankruptcy petition preparer. If you want legal advice and analysis of the details of your specific situation, you can hire a New York bankruptcy lawyer to advise you. You’ll find listings in the Lawyers section of this site. These listings are not endorsements. They are simply designed to help you quickly connect with service providers in your area.
Whether you decide to do it yourself or hire professional help, our goal is to help you become a smarter, better-informed legal consumer and help you steer clear of shoddy services.
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What Questions Should I Ask A Bankruptcy Lawyer
Not sure what to ask a bankruptcy lawyer? Here are a few sample questions to get you started:
- How long have you been in practice?
- How many bankruptcy cases have you handled?
- How much does a bankruptcy filing cost? How much of that cost is attorney fees vs. filing fees?
- Where is your office in Rochester located?
- What are the next steps?
Figuring Out If Youre Eligible For Chapter 7
To qualify for Chapter 7 bankruptcy, your bankruptcy forms need to show that you dont have enough income to repay your creditors a certain amount. You can accomplish this by either:
- proving that your income is below the New York median income for your household size, or
- comparing your income to expenses under a complex formula called the bankruptcy means test calculation to show that youre not able to pay.
If your income is above the median income for your state and family size and the means test shows you have enough disposable income to make reasonable payments to your creditors, the bankruptcy court may dismiss your caseor you may be allowed to file bankruptcy under another chapter of the bankruptcy code, like Chapter 13.
Our free means test calculator can do the math for you, so you can figure out whether you’ll qualify for Chapter 7.
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B Debt Settlement In New York
Debt settlement can be less expensive than both Debt Management and Debt Payoff Planning because the debt management company is negotiating a lower amount on your total debt. We covered the pricing estimate differences in our article covering debt management vs debt settlement.
Attend Your 341 Meeting
The 341 Meeting is the first and typically only Court appearance you will have to make in your Rochester bankruptcy case. Itâs an opportunity for the trustee and your creditors alike to ask you questions about your bankruptcy forms. Your trustee may ask you if you forgot to include anything in your bankruptcy forms and allow you the opportunity to do so. The trustee may also ask you about any debts you may have paid after you filed for bankruptcy or any sums of money you have acquired after you filed for bankruptcy. Itâs rare that creditors show up at these meetings but they are allowed to do so. You should dress business casual for these meetings and bring your driver’s license and original social security card for identification. This meeting should take no longer than 10 to 15 minutes depending on the amount of questions your trustee has for you.
A Chapter 13 Bankruptcy In New York
For those who make above the income limit for Chapter 7, debt relief can still come through a filing a Chapter 13 bankruptcy. A Chapter 13 Bankruptcy in New York case allows you to restructure your debts into an affordable monthly plan. By restructuring debts, many people can afford to keep their homes and vehicles under Chapter 13.
Chapter 13 stops foreclosures, repossessions, and wage garnishments. Chapter 13 bankruptcy also allows you to pay back mortgage payments, past-due car payments, and tax debt over three to five years through a bankruptcy plan. In addition, New York may also allow you to reduce unpaid child support and alimony. However, you must resume your normal domestic support payments to remain in Chapter 13.
In a Chapter 13 plan, some debtors can lower their car loan payments and erase second mortgages, if they meet certain requirements.
Complete The Bankruptcy Forms
This is probably the most technical part of any bankruptcy filing. If youâre eligible to file through Upsolve, we will handle the technical parts after collecting all of the necessary information from you. If youâre thinking of completing the forms on your own without anyone’s help, make sure to download and review the 49 page instructions manualfor important information about each one of the bankruptcy forms.
Of course, if you hire a bankruptcy lawyer theyâll do the heavy lifting in drafting all your bankruptcy forms based on the information you provide to their office. Regardless of which process you choose, make sure to take your time and be diligent and thorough in answering all of the questions. You will be signing these documents under penalty of perjury before theyâre filed with the court, and errors or omissions can delay or even prevent the entry of your discharge.
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How Are Trustees Paid
Bankruptcy Code § 326 says that a trustees compensation is based upon a percentage of the property of the estate that is administered by the trustee. As a result, there is a financial incentive for a trustee to maximize the property of the estate. Consequently, discussions or disputes with a Chapter 7 trustee will mostly focus on what is property of the estate.
Can A Bankruptcy Filing Be Dismissed In New York
Filing for bankruptcy does not automatically mean that debtors can liquidate assets or reorganize their debts. In some cases, New York bankruptcy courts may dismiss petitions for several reasons. Some of them include:
- Bad faith on the debtors part. The court may conclude that the debtor only filed for bankruptcy to exploit the automatic stay or another part of the bankruptcy process
- Impractical budgeting
- Failure to submit all required forms
- Failure to pay filing fees
- Absence from Meeting of Creditors
- Failure to submit a complete list of creditors
In addition to the above, New York bankruptcy cases may be dismissed due to an adversary proceeding. Although linked to the initial case, an adversary proceeding is a separate filing used to counter an issue originating from the bankruptcy petition. An adversity proceeding that contends with one or more issues of the case could end in a complete dismissal if the court evaluates the case and finds cause.
The option of an adversary proceeding is also available to debtors and trustees. A trustee can file an objection to an issue in the same way that a creditor would. On the other hand, a debtor could initiate an adversary proceeding to seek specific relief on a particular issue. Persons cannot file any type of bankruptcy if a previous filing was discharged in the last 180 days for any of the following reasons:
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New York Bankruptcy Forms
The most challenging of the New York bankruptcy forms to complete are the Means Test and Schedule C because they will determine if you can even file for bankruptcy in the first place. For example, you will need to know what property you will claim as exempt, thereby protecting it, before filing your bankruptcy. You will also need to know if you can pass the Means Test. As mentioned before, utilizing your pay stubs, income tax returns, bank statements, and monthly bills will be tremendously helpful in filling out your forms. The hardest part of your Rochester bankruptcy forms is including all your financial information, from your jobs to inheritance, to personal property and homes. You can find all the forms you need for free online.
Bankruptcy Exemptions Under Chapter 13
Bankruptcy exemptions work differently in Chapter 13 bankruptcy than they do in Chapter 7. In Chapter 7, the bankruptcy trustee appointed to your case will sell your non-exempt property to pay your creditors. Under Chapter 13, the trustee wont sell your non-exempt propertybut the value of that property will be used to determine how much you must pay your creditors under your repayment plan. Either way, your creditors get the value of your non-exempt property.
Bankruptcy exemptions may include at least some of the equity in your home, your car, and personal property such as your clothes and household goods. Exemptions are determined by state law some states have their own exemptions, while others allow you to use the exemptions provided by the federal bankruptcy code.
For more information on New York law, see the Exemptions section of this website.
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Go To Court To File Your Forms
If you live in Rochester, you will be filing your Rochester bankruptcy forms at the courthouse located at 100 State Street in Rochester. More specifically, you will need to visit the bankruptcy clerk’s office within the courthouse to get your forms officially filed. The bankruptcy clerk will briefly look over your forms to see if they are complete, and if they’re missing any pages or signatures. The courthouse is open 8 AM to 4:30 PM excluding weekends and federal holidays. A few things to keep in mind before you go to court is that parking may be limited, so it may be best to bring some cash if you need to pay for parking. Another thing to keep in mind is that if there is inclement weather, you may consider calling the court in advance to see if theyâre open. Also, the courthouse is a secure government building, and you will need to go through metal detectors before you enter. Electronics like cell phones are not allowed in the courthouse and will be held at the entrance during your visit. Lastly, you should dress business casual when making a visit to the courthouse.