New York Bankruptcy
New York Bankruptcy Law
Bankruptcy Code and Exemptions...
Although Federal Bankruptcy Code and U.S. Bankruptcy Laws apply to everyone, each state has its own Bankruptcy Code and Rules of Bankruptcy Property Exemption that apply specifically in that state.
New York Bankruptcy Law
New York Bankruptcy Median Income Restrictions...
The new federal bankruptcy reform laws affect all New Yorkers differently. For example, a test measure based upon the New York median income level (state wide). In short, any person who earns above the median income for New York State may not file Chapter 7, and must propose a Chapter 13 debt repayment plan of 5 years, unless all debts can be repaid sooner.
This test law will be particularly onerous upon Manhattan residents, and other people who reside in historically expensive areas of New York, because the means testing requirement does not include cost of living adjustments. For example, a potential debtor who earns $75,000 while living in Manhattan posseses less disposable income than residents of small rural communities upstate. Nevertheless, under the new laws, each must qualify for Chapter 7 bankruptcy law discharge upon the same terms of discharge.
Oddly enough, Chapter 13 payments do include a cost of living adjustment based upon a new national Standards schedule of permissible living expenses.
Qualifying for discharge is somewhat more difficult today, yet with the assistance of competent New York counsel, most people will receive an eventual discharge. Because of the leeway inadvertently left in hastily crafted statutes, these opportunities are expected to remain for at least another year or so.
New York Bankruptcy Exemptions
New York Exemption Considerations...
New York bankruptcy exemptions put many state residents in a rather compromising situation. Total equity which may be claimed as exempt for homestead property, is only $10,000. For most residents, home equity loans are a prime source of cash flow to avoid filing. The purpose of the state exemption is intended to provide basic necessities when beginning the fresh start promised originally by the US Congress. In the exercise of congressional powers, each state is allowed to establish their own exempt property schedules and amounts. For New Yorkers from Manhattan to Albany, real estate appreciation and market values out striped the homestead exemption many years ago.
Alternatives Under State Law...
Rather than choose the homestead exemption, each state resident is permitted an option to retain $5,000, in cash as a wild card option, vehicle equity in the amount of $2,400, and an extensive list of personal household items. Additionally, modest provisions are made for limited retention of pensions, qualified retirement benefits, and receipts from public assistance programs.
Pre-Bankruptcy Planning and Preparation
Pre-bankruptcy planning is a delicate topic with many transactions prohibited, but with the assistance of a progressive bankruptcy attorney, other allowable exemptions may be identified.
In practice, most people who file for bankruptcy will actually improve their credit rating within 18 months or less. In fact, in a chapter 13 filing, credit will begin to improve once late payment reports stop, and secured loans and credit lines begin reflecting timely payments.
Overall, filing for bankruptcy can, for many Americans in many different circumstances, be an important and integral step toward financial recovery and new found fiscal stability. Ultimately, bankruptcy creates opportunities and improves net worth, so long as the decision to file was made wisely.
To learn more about New York State Bankruptcy Exemptions, simply go to our U.S. Bankruptcy Exemptions page.
In most states you can legally protect your personal residence in a bankruptcy. The interesting thing is homeowners are treated differently from state to state.
Learn more about the Homestead Act and how it affects you.
New York Bankruptcy Code
All New York Bankruptcy cases are governed by Title 11 of the United States Bankruptcy Code, by U.S. Bankruptcy Rules, and by local New York State Bankruptcy Rules promulgated by New York court.
The US bankruptcy court websites generally have links to both, the Federal US Bankruptcy Rules and specific New York Bankruptcy Code. Clerks in the bankruptcy courts will not give debtors, or even attorneys for debtors, legal advice, including advice about which bankruptcy rules apply to a given case.
Locate a US Bankruptcy Court in your federal judicial district.
Since US Bankruptcy Code and New York Bankruptcy Rules are very technical, and since the case load in the US Bankruptcy Courts makes judges very unforgiving of mistakes or missed deadlines, it's highly recommended to seek the advice of an experienced New York Bankruptcy Attorney and Certified Credit Counsellor.
The most recent Changes to the Bankruptcy Code and Bankruptcy Rules came about on April 20, 2005 as President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act. This new Bankruptcy Law came into effect October 17, 2005.
Learn more about the 25 Most Recent Changes to Personal Bankruptcy Law and how they affect you.
