Chapter 7 Bankruptcy In New York

Chapter 7 bankruptcy in New York has few variations as the implementation of bankruptcy varies from state to state in the US. According to the US Bankruptcy code, there are various chapters like Chapter 7, Chapter 13, Chapter 11 and more to handle different types of bankruptcy cases. Chapter 7 is the most common of all and is referred to as a straight bankruptcy. It is applicable to businesses, including corporations and individuals.

Solutions from Chapter 7 Bankruptcy

You may clear all of your debts except the child support, alimony, student loans, civil or criminal fines. You also get an additional concession of retaining certain properties under exemption. According to New York laws, some of the exempted properties include

• $2,500 in cash, $2,500 in wearing apparel and household appliances and furniture or $50,000 in equity of home located in New York.
• Car up to $2,400 in equity
• IRA plans

Median Income Test

In order to see whether you qualify for Chapter 7 bankruptcy, a median test is conducted. In this test, your income is compared with a standard as per your family size. Median income for various family sizes is determined every year by the Census Bureau in each state. The median income in New York for the year 2009 is as follows:

• $83,036 for a family of 4
• $67,991 for a family of 3
• $57,006 for a family of 2
• $46,523 for a family of 1

If you fail the median test, then another test known as the mean test is conducted, the failure of which will lead you to file bankruptcy in New York under Chapter 13.

Process of Filing

Complete the credit counseling at least 6 months prior to the filing of Chapter 7 bankruptcy. After you file your case, complete a class in Personal Financial Management course conducted by a court approved organization. You need to submit a “statement of financial affairs,” which should have the detailed list of all creditors, debts, sources and frequency if your income,  monthly living expenses, non exempted movable and immovable assets. Generally, it takes 3 months from the filing of bankruptcy petition to discharge the debtor from all the liabilities of debts.

From the above information, you would have got an overview of bankruptcy filing in New York; however, it is wise to consult an experienced bankruptcy lawyer who if familiar with New York’s bankruptcy laws so that you can avoid errors while filing and claiming your bankruptcy.