New York Bankruptcy Process
If you owe more debt than you can feasibly pay, you may wish to consider bankruptcy as a stepping stone to financial success in the future. Bankruptcy can be a confusing process so it is important that you seek strong legal representation from a qualified New York bankruptcy lawyer. At the Law Offices of Michael D. Pinsky, P.C., our firm can help you explore your bankruptcy options and determine if this is the best course of action for your situation. To learn more about filing for bankruptcy in New York State, contact the Law Offices of Michael D. Pinsky, P.C. today to schedule a consultation.
How Do You File Bankruptcy In New York State
The real way to declare bankruptcy in New York is to file a petition with the Bankruptcy Court. You might be surprised, however, to learn that most lawyers dont actually go to the Bankruptcy Court to file a bankruptcy petition for their client. Thats because you can do it all electronically now.
Bank And Savings Accounts
It is not uncommon for spouses to share a joint chequing account. Most people who file bankruptcy do not have significant funds saved in these accounts. In general, the trustee will not pursue seizure of a reasonable amount in a joint bank account if that amount is immediately needed to cover rent, groceries and living costs for a short period of time.
However, legally, joint savings accounts, GICs or other unregistered plans are not protected in a bankruptcy and your Trustee will look to realize on the bankrupts 50/50 share in these assets.
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What You Need To Know About New York Covid
With all of the business closures in New York due to the impact of the coronavirus, its not surprising that many people would consider filing for bankruptcy to deal with financial hardships. Taking this step can be a way to have a clean slate and erase debts, but making this decision requires knowing all of your options. Here are some important things that you should know about filing a bankruptcy in New York in the Covid-19 era.
New Procedures in Bankruptcy Courts
The court rooms in New York that hear bankruptcy cases are still functioning, but the processes and procedures have been modified to comply with public health concerns. Obviously, these modifications are on-going and vary, depending on the specific area, but here are some examples of the general changes that the New York Bankruptcy Court has made:
- Restricts access to all of the New York bankruptcy courtrooms by allowing only employees and other specified individuals to enter.
- Suspends all in-person bankruptcy appearances.
- Mandates that all scheduled hearings will be held over the phone.
- Encourages parties to file bankruptcy petitions electronically. But accepts paper filings that are mailed or dropped off in a sealed envelope.
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Get Help with Your Bankruptcy Filing in New York
Why Your Attorney And The Trustee Need Your Account Statements
In the course of preparing your bankruptcy petition and schedules, your attorney will ask you for several months worth of statements from any and all checking and savings accounts you have. These bank statements will be used to support the income and expenses you set forth in your filing. They will also be used to prepare your list of exemptions, either state or federal according to your specific financial situation. Money in those accounts and cash on hand can be exempted from the bankruptcy estate in limited amounts which vary by state.
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Restrictions On A Second Ny Bankruptcy
The main restriction on a second or subsequent NY bankruptcy is a mandatory time limit between the discharge of your initial bankruptcy and any subsequent filing. If your first bankruptcy was discharged by the court, which is the elimination of all your qualified debts at the end of Chapter 7 or Chapter 13 bankruptcy. Discharge of qualified debts occurs through an official order from the federal bankruptcy court.
You must wait eight years from the date you filed for of a Chapter 7 bankruptcy to file for another NY bankruptcy, whether the subsequent bankruptcy is under Chapter 7 or Chapter 13. For example, if you filed for Chapter 7 bankruptcy in October 2011 and your NY bankruptcy was discharged in March 2012, then you cant file for a subsequent bankruptcy until October 2019.
On the other hand, you can file for a subsequent NY bankruptcy four years from the date you file for Chapter 13 bankruptcy. In this instance, if you filed for a first Chapter 13 bankruptcy on October 2011 and your debts werent discharged until November 2014, you were still eligible to file for a subsequent bankruptcy as of October 2015.
While these timing restrictions are extremely important to your subsequent NY bankruptcy, they arent finite. You can actually file for a second or third bankruptcy before these time limitations have expired or you receive a discharge of your first bankruptcy, but the outcome of your subsequent bankruptcy will be different.
What Happens When You File For Bankruptcy
On those rare occasions, bankruptcy is spoken of, its usually done slyly, which oftentimes furthers consumer fears for both the process of declaring and any consequences that may occur as a result.
But the bottom line is this: For those struggling with oppressive debt, bankruptcy sometimes feels like the only option. Especially if youre forced to choose between paying your bills and survival.
Facing bankruptcy can be frightening, but it doesnt have to be.
Keep reading to learn a bit about the kinds of bankruptcies available to individual American consumers, the consequences of bankruptcy on credit scores, and how to rebuild credit after bankruptcy.
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Can One Spouse File For Bankruptcy Separately
What happens when one spouse needs to file for bankruptcy before the divorce is finalized? This is a question clients frequently ask us at the Law Offices of Jayson Lutzky. The answer is, yes, one of the divorcing spouses can file for bankruptcy apart from the other spouse. The couple does not necessarily need to file for bankruptcy before the divorce is finalized.
Keep in mind that filing for bankruptcy before your divorce is complete is not always the best option. The best legal option for you depends on your situation, and you should discuss the matter with an experienced New York City bankruptcy or divorce lawyer as soon as possible.
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.
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Take Bankruptcy Course 2
You took a credit counseling course before your Chapter 7 bankruptcy in New York was filed in order to be eligible to be a debtor in bankruptcy. Now that your case has been filed, you have to take bankruptcy course 2 in order to be eligible to receive your bankruptcy discharge. This course focuses on financial management tools and aims to help folks filing bankruptcy in New York take full advantage of their fresh start, while managing their finances responsibly.
The course itself only takes about 1 – 2 hours and, as before, can be taken online, over the phone, or in person. If you were happy with the company you used to complete the first bankruptcy course, you should find out if they are approved to offer the financial management course to folks filing bankruptcy in New York as well. If so, you can go through them again for this second course and may even be able to get a discount for taking both classes with them. If not, check out the list of providers approved to offer this course for New York bankruptcy cases published by the Office of the United States Trustee.
Contact A Bankruptcy Attorney
If your debts are overwhelming and you find yourself wondering how youll ever be able to get out of them, you need the services of an experienced Florida bankruptcy attorney. or contact us online for a free consultation to discuss your options and see whether you qualify for bankruptcy. We will discuss means testing, answer any questions you have, and represent you throughout your entire bankruptcy proceeding.
- 110+ Years Combined Legal Experience
- 24/7 Support
- Top Rated Criminal and Injury Attorneys
- Board Certified Florida Bar Expert Trial Lawyers
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Keep Track Of Your Credit During The Process
Because declaring bankruptcy can affect your credit history and ability to do certain things in the future, it’s important to monitor your credit scores during the process and as you work on recovering from the ordeal.
As you do so, watch how certain actions affect your credit scores and look out for potential errors and negative information that might influence your score negatively. If you do find something that doesn’t belong on your credit report, dispute it with the credit reporting agencies.
As you keep track of your credit score during and after bankruptcy, you’ll learn better how to improve it over time and keep it in a good place going forward.
Want to instantly increase your credit score? Experian Boost helps by giving you credit for the utility and mobile phone bills you’re already paying. Until now, those payments did not positively impact your score.
This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.
Leave Everything As It Is
One big mistake that many people make when filing for bankruptcy is salvaging assets not to be included in their financial audit report. This is usually common with company bankruptcy cases where people tend to move or hide assets like machinery so that their companys value goes down and improves their chances of winning the case. If you are caughtdoing such tactics you might end up facing more problems with the strict UAE courts.
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New York Bankruptcy Means Test
Not everyone who wants to file a Chapter 7 in New York is actually eligible to do so under the New York bankruptcy means test. The means test calculation is necessary is to ensure that only folks that truly canât pay even a portion of their debts are able to file bankruptcy under Chapter 7 of the Bankruptcy Code. If youâre below the applicable income limits for New York, you pass the means test, meaning you are eligible to file a Chapter 7 bankruptcy in New York. If your income is higher than what is allowed, you may nevertheless qualify for Chapter 7 after completing part two of the New York means test for bankruptcy.
Data on Median income levels for New York
New York Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
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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S In A New York Bankruptcy
We all know that seeing the forest helps us recognize the trees, so it’s probably a good time to consider the significant steps you’ll take during your bankruptcy journey. Think of this checklist as a roadmap of sorts, but you can also use it to track your progress. The good news? You’ve already made headway on the first two items!
File Bankruptcy Petition And Other Forms
To file bankruptcy, your attorney or you must file a variety of bankruptcy forms. For example, you may be required to provide the financial affairs and schedules below:
- List of all the creditors and the amounts of those claims
- Your source of income including frequency and amount
- All of the property you own
- A comprehensive list of your living expenses
There are also local rules and forms that may be specific to New York. If you are filing bankruptcy with an attorney, they should help guide you through the local requirements. For example, see the local rules in New York based on the district:
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Are There Any Exceptions
While the bankruptcy of one spouse does not generally affect the other, there are some notable exceptions. For example, the bankruptcy of ones spouse may show up on the others credit report if joint debt is involved a contentious area of the law. Also, if applying for a joint loan in the future, the bankruptcy of one spouse will affect the creditworthiness of the applying couple.
Another exception has to do with jointly held property. In a normal bankruptcy, much of the debtors property is hauled away by creditors. If that property is jointly held, it can also be taken away.
This is of vital importance in community property states, states where both spouses in a marriage own and are responsible for all the debt and property acquired during the marriage. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
Any joint debts discharged by the bankruptcy of a single spouse also apply to the non-filing spouse. In other words, the non-filing spouse in community property states gets a partial advantage from her spouses bankruptcy. From that point on, creditors can only go after the non-filing spouses separate property such as that acquired before marriage, by gift during the marriage, or by inheritance.
Q1 How Does The Trustee Decide To Sell My House
The trustee may or may not sell your home depending on its equity value. If its less than the exemption amount, then the trustee must not sell your house. If you have significant equity left, the trustee will sell it.
The goal of selling your property is to get funds that can be used to pay off your unsecured debts. If your home gets sold, the trustee must give you first the exemption amount before paying your debts to the creditors.
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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.
Debts Never Discharged In Bankruptcy
While the goal of both Chapter 7 and Chapter 13 bankruptcy is to put your debts behind you so that you can move on with your life, not all debts are eligible for discharge.
The U.S. Bankruptcy Code lists 19 different categories of debts that cannot be discharged in Chapter 7, Chapter 13, or Chapter 12 . While the specifics vary somewhat among the different chapters, the most common examples of non-dischargeable debts are:
- Alimony and child support.
- Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years.
- Debts for willful and malicious injury to another person or property. âWillful and maliciousâ here means deliberate and without just cause. In Chapter 13 bankruptcy, this applies only to injury to people debts for property damage may be discharged.
- Debts for death or personal injury caused by the debtorâs operation of a motor vehicle while intoxicated from alcohol or impaired by other substances.
- Debts that you failed to list in your bankruptcy filing.
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