Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including New York. However, state law plays an important role, particularly in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Before you file for Chapter 7 or Chapter 13 bankruptcy in New York, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here’s a list of agencies in New York that have been approved to provide this counseling.
Where to File
In New York, the bankruptcy courts are divided into four districts. In the Eastern District, there are bankruptcy courts in Brooklyn and Central Islip. In the Western District, the bankruptcy courts are in Buffalo and Rochester. In the Southern District, you'll find the courthouses in New York, Poughkeepsie, and White Plains. And in the Northern District, the bankruptcy courts are in Albany, Utica, and Syracuse.
Visit each of these districts' websites for information on forms, local rules, and more.
Like every other state, New York has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
In New York, you may use either the New York state exemptions, or the federal bankruptcy exemptions.
New York allows debtors to exempt a certain amount of real property (including a co-op, condo, or mobile home) to $75,000, $125,000, or $150,000 depending on the county. New York also exempts life insurance proceeds, alimony, child support, certain public pensions, various public benefits, 90% of earned but unpaid wages received within 60 days of filing, and tools of the trade to $3,000. New York's long list of personal property exemptions include, among other things: cash up to $10,000; college tuition savings; health aids, motor vehicles to $4,000 or $10,000 if equipped for a person with a disability; and items such as books, clothing, furnishings, appliances, jewelry, art, etc. to a total of $10,000. Here’s a list of New York exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median income for a household of your size in New York. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median New York income for a one-person household is just under $46,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here a list of agencies approved to provide this course in New York.
Getting Help From a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced New York bankruptcy lawyer.