Introduction
Filing for bankruptcy in New York can be a complex and overwhelming process. It is important to understand the steps involved and the requirements to ensure a smooth and successful filing. This article will provide an in-depth guide on how to file bankruptcy in New York, covering the necessary steps, eligibility criteria, and important considerations.
Types of Bankruptcy
Chapter 7 Bankruptcy: Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves the sale of non-exempt assets to repay creditors. It is suitable for individuals with limited income and significant debt.
Chapter 13 Bankruptcy: Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows individuals with a regular income to create a repayment plan to pay off their debts over a period of three to five years.
Eligibility Criteria
To file for bankruptcy in New York, individuals must meet certain eligibility criteria:
Means Test: The means test compares the individual’s income to the median income in New York. If the income is below the median, Chapter 7 bankruptcy may be an option. If the income is above the median, Chapter 13 bankruptcy may be more suitable.
Credit Counseling: Before filing for bankruptcy, individuals must complete a credit counseling course from an approved agency within 180 days.
Residency: To file for bankruptcy in New York, individuals must have lived in the state for at least 91 out of the last 180 days prior to filing.
Filing Process
Gather Required Documents: Before filing for bankruptcy, gather all necessary documents, including income statements, tax returns, and a list of assets and liabilities.
Complete Bankruptcy Forms: Fill out the required bankruptcy forms, including the petition, schedules, and statements. These forms provide detailed information about your financial situation.
File the Forms: Submit the completed forms to the bankruptcy court in your district. You will also need to pay the filing fee unless you qualify for a fee waiver.
Automatic Stay: Once the forms are filed, an automatic stay goes into effect, which stops creditors from taking any further collection actions against you.
Meeting of Creditors: Approximately 30-45 days after filing, a meeting of creditors, also known as a 341 meeting, will be scheduled. This meeting allows the bankruptcy trustee and creditors to ask questions about your financial situation.
Financial Management Course: After the meeting of creditors, individuals must complete a financial management course from an approved agency within 60 days.
Discharge of Debts: If all requirements are met, the bankruptcy court will issue a discharge order, relieving you of the obligation to repay most of your debts.
Important Considerations
Impact on Credit: Filing for bankruptcy will have a significant impact on your credit score and can stay on your credit report for up to 10 years. However, it is possible to rebuild your credit over time.
Exempt Property: New York has specific exemptions that allow individuals to keep certain assets, such as a primary residence, a vehicle, and personal belongings. It is important to understand these exemptions to protect your property during bankruptcy.
Bankruptcy Attorney: While it is possible to file for bankruptcy without an attorney, it is highly recommended to seek professional legal advice. An experienced bankruptcy attorney can guide you through the process, ensure all requirements are met, and protect your rights.
Conclusion
Filing for bankruptcy in New York is a complex process that requires careful consideration and adherence to specific requirements. Understanding the types of bankruptcy, eligibility criteria, filing process, and important considerations is crucial for a successful bankruptcy filing. Consulting with a bankruptcy attorney can provide valuable guidance and support throughout the process.
References
– United States Courts: www.uscourts.gov
– New York Bankruptcy Court: www.nysb.uscourts.gov
– Legal Information Institute: www.law.cornell.edu
