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Common NYC Bankruptcy Questions Answered:
Here on our website, we do our best to explain the ins and outs of bankruptcy in New York City. We also try to provide the most cost-effective bankruptcy representation in New York City. Our answers to the most frequently asked questions are meant to provide basic information on bankruptcy in New York City but are not intended as legal advice.
If you have questions about your financial situation or filing for bankruptcy in New York City, contact bankruptcy lawyer Michelle Labayen now.
Who can file for bankruptcy in New York City?
Answer: Any New York City resident could be eligible to file for bankruptcy. There isn’t an exact amount of debt or financial difficulty that is required to file for bankruptcy. You do not have to show insolvency or meet a certain standard to file with the bankruptcy court. Yet, you should always speak with a New York City lawyer before beginning the bankruptcy process to ensure it is the best option for you.
It is necessary you either have a primary place of residence, own property, or have a place of business in the United States to file for bankruptcy, and you must complete a credit counseling course within 180 days of filing for bankruptcy.
What is the law on bankruptcy in New York City?
Answer: In New York City, as elsewhere in the United States, federal law governs bankruptcy. The basis for all federal laws on bankruptcy is in the Constitution, which grants Congress the authority to enact laws on the subject of bankruptcy. Today, all bankruptcy cases in New York City are still governed by the U.S. Bankruptcy Code, a federal statute.
Is bankruptcy the only option in New York City to fix my finances?
Answer: No, bankruptcy is not the sole option for solving financial difficulty. In certain situations, bankruptcy is the best way to overcome overwhelming and outstanding debt. Under other circumstances, alternatives to a New York City bankruptcy might include negotiation for debt reorganization with your creditors, participation in a credit counseling, or debt consolidation.
When it comes to your options for a better financial future, you should consider every alternative and type of bankruptcy. Finding the best path forward often comes from working with an expert, such as a New York City lawyer.
Does filing for bankruptcy in New York City impact my credit?
Answer: Yes, a bankruptcy filing will appear on your credit report for a certain period of time. If you file for Chapter 7 bankruptcy, it will be reported for 10 years on your credit report. The reporting time for Chapter 13 bankruptcy is shorter at 7 years.
This is a big concern for many New York City residents. Even if you aren’t worried about negative repercussions to your credit, it could become a stumbling block in the future when you want to buy a house or make other large purchases. Impact to your credit is a reason to explore all of your options when it comes to filing for bankruptcy.
Is Chapter 7 or Chapter 13 bankruptcy the best option for me?
Answer: There are advantages to filing for Chapter 7 bankruptcy. These benefits include a shorter timeframe before bankruptcy is discharged and there isn’t an obligation to create or follow a repayment plan.
Yet, Chapter 13 bankruptcy has different advantages. You could save your real property from foreclosure and you don’t have to undergo liquidation of your non-exempt assets. Plus, a Chapter 13 bankruptcy impacts your credit score for a shorter period of time.
Deciding whether Chapter 7 or Chapter 13 bankruptcy is best requires knowledge of your overall financial situation, income, monthly expenses, type of debt, amount of debt, and future financial goals. A New York City bankruptcy lawyer can advise you on which type of bankruptcy is better for you and how to file in New York City.
How do I choose a New York City bankruptcy lawyer?
Answer: Hiring a bankruptcy lawyer shouldn’t be a difficult or stressful process. First and foremost, you need to find a New York City lawyer you can trust. Filing for bankruptcy requires you to share personal information and your financial history. You want to know a lawyer has your goals, wants, and financial future in mind when using the information you share.
You can look to reviews, testimonials, and other information online to find a New York City lawyer to take your case, but in-person meetings are very important. Michelle Labayen offers a free initial consultation to any new client. This is an opportunity to meet a top NYC bankruptcy lawyer and ask questions about the bankruptcy process, without signing an engagement letter or paying a retainer.
Will filing for bankruptcy in New York City stop collection calls?
Answer: Yes, when you file for bankruptcy creditors and collection agencies are required to stop all contact and attempts to collect a debt. You shouldn’t receive phone calls, emails, on in-person communication regarding your debts. If you continue to receive demanding phone calls or other communication, you should notify your bankruptcy lawyer immediately.
The NYC Bankruptcy Process Explained
Best NYC Bankruptcy Lawyer
Hiring a Top Bankruptcy Attorney in New York City
Step 1: Preparing for NYC Bankruptcy
Many people mistakenly believe that the first step in an NYC bankruptcy is filing with the United States Bankruptcy Court. However, bankruptcy begins long before you officially file a petition in NYC. There are several ways you should prepare to start the court Bankruptcy.
- Under federal law you must complete credit counseling within 180 days of the date you file for bankruptcy in NYC. This must be done with an approved provider of credit counseling services. An NYC lawyer can help you find an approved partner.
- A number of documents are mandatory for a bankruptcy filing and throughout the bankruptcy process. You can gather these documents before you start bankruptcy proceedings with the court. You need to calculate your monthly income, expenses, and savings.
- Hiring an NYC bankruptcy lawyer. A huge part of your preparation for bankruptcy requires a better understanding and knowledge of the bankruptcy process in NYC. The best source of information is an NYC lawyer with experience in bankruptcy in the Southern District of New York, such as Michelle Labayen.
- Deciding bankruptcy is the right option for you. There are alternatives to bankruptcy. An NYC Bankruptcy lawyer can help you explore these alternatives and the potential benefits of delaying bankruptcy or choosing an alternative path to a healthy financial future.
Step 2: Discussing Your Bankruptcy Options with a Lawyer
The U.S. Bankruptcy Code contains several different chapters. Some of these chapters apply to bankruptcy, generally, but several chapters focus on the different types of bankruptcy. Each of these bankruptcy procedures has a different set of eligibility requirements, rules, processes, and outcomes.
Chapter 7 bankruptcy is the most common category of bankruptcy for individuals and sole proprietorships in NYC. Through this process a debtor is required to liquidate all non-exempt assets to pay off creditors, student loans (when applicable), loans, and other debts. Meanwhile, Chapter 13 bankruptcy has substantial benefits for an individual that is employed or has less substantial debt.
An NYC bankruptcy lawyer can further explain the different chapters of the federal Bankruptcy Code and explain what chapter is applicable to your financial situation and financial goals. This step in the NYC bankruptcy process is incredibly important to your future and ensures you are certain you are moving forward in filing for bankruptcy.
Step 3: Passing the Means Test for Chapter 7 Bankruptcy
One of the most important eligibility requirements for Chapter 7 bankruptcy in NYC is the means test. As a liquidation of non-exempt assets and discharge of your remaining debt, Chapter 7 bankruptcy is meant to solve overwhelming and exceptional debt situations for individuals. The means test ensures that this process facilitates that purpose.
There are two separate ways to qualify for Chapter 7 bankruptcy in NYC:
- Your income is less than the median income for the State of New York; or
- Your disposable income, calculated by subtracting your monthly expenses from your income, makes it impossible to pay your debts and still maintain a standard of living.
An NYC Chapter 7 lawyer can help you determine how the means test applies to your financial situation and calculate your disposable income. Working with a bankruptcy lawyer during this step makes it far more efficient and certain than completing this calculation on your own.
Step 4: Filing for Bankruptcy in NYC
Bankruptcy is a federal case, which means you can’t file for bankruptcy in a town court or state court in NYC. In fact, bankruptcy courts are separate from all other courts in the United States. There is one bankruptcy court for each federal district.
In NYC, the appropriate bankruptcy court to take your case is the United States Bankruptcy Court for the Southern District of New York. This is where an NYC resident would file for Chapter 7 or Chapter 13 bankruptcy. An NYC bankruptcy lawyer can help you find the bankruptcy court, prepare a proper filing, and collect evidence and documents for the bankruptcy proceedings.
Step 5: Bankruptcy Proceedings in NYC
A federal bankruptcy court must adjudicate your bankruptcy case. Depending on whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, your case could take between five months and five years. Through every filing, requirement, and part of the bankruptcy proceedings, an NYC bankruptcy lawyer is there to help.
Assistance during the bankruptcy proceedings includes:
- Explanation and enforcement of the automatic stay under Chapter 7 bankruptcy;
- Assistance with identifying exempt and non-exempt assets for liquidation in Chapter 7 bankruptcy and ensuring your rights to exempt property are respected and followed during the NYC bankruptcy proceedings;
- Advice and preparation for the meeting of creditors in Chapter 7 bankruptcy, in preparation for liquidation of assets and accounting of debts by the trustee;
- Providing the definition of exempt property and cataloging a client’s assets before a trustee begins liquidation;
- Negotiation of a repayment plan and payment schedule for Chapter 13 bankruptcy;
Reorganization and renegotiation of certain debts for repayment in Chapter 13 bankruptcy;
- Communication with the trustee in Chapter 7 bankruptcy and the court in all NYC bankruptcy proceedings.
- And more.
Step 6: Discharge Your Debts
The final step in bankruptcy is receiving a court order from the bankruptcy court in NYC and a discharge of any outstanding or unpaid debts. This step can be very different depending on whether you filed under Chapter 7 or Chapter 13 of the United States Bankruptcy Code, but the final result is similar: you have a second chance at a successful financial future.
Do you have other questions about the bankruptcy proceedings in NYC? You can discuss any step in the process or explanation of your case with NYC bankruptcy lawyer, Michelle Labayen.
To access the experienced advice and client-oriented approach to bankruptcy provided by our NYC law office, contact us today.
