You don’t simply wake up one morning and file for Chapter 7 bankruptcy – at least, you shouldn’t. First, there are explicit requirements in place by the federal bankruptcy laws that must be met before you are permitted to file under Chapter 7 of the Bankruptcy Act. Second, bankruptcy isn’t the best course of action for everyone, even when faced with substantial debts and outstanding obligations. You could be much better served through a different chapter of the Bankruptcy Act or utilizing an alternative to bankruptcy.
So, how should you prepare for Chapter 7 bankruptcy in New York? Our years representing people of all backgrounds and circumstances in the Chapter 7 bankruptcy process have garnered substantial information on when, how and what to prepare for filing. Here’s a list of our top tips.
#1: Understand Your Debts, Outstanding Payments, and Assets
The scope of your financial situation is crucial to Chapter 7 bankruptcy and it is the necessary first step in filing for bankruptcy in New York. You will need to provide an assessment of your financial circumstances to a New York bankruptcy attorney. After that, you will need documentation and information to take to credit counseling, and finally, it is this information that informs your bankruptcy petition.
#2: Go to Credit Counseling
There are several strict eligibility and prerequisite requirements to Chapter 7 bankruptcy. One requirement under the Bankruptcy Act that is often unknown or overlooked by non-lawyers is attending credit counseling. You must complete credit counseling within six months of filing for Chapter 7 bankruptcy.
You want to complete credit counseling as far in advance of your Chapter 7 bankruptcy filing as possible, while still meeting the six-month requirement. Why seek out credit counseling early in the process? It will require you to be more organized with your documentation, information, and payments. You will better understand some of the ramifications of bankruptcy, and you will know if there is a good alternative to Chapter 7 bankruptcy.
Keep in mind credit counseling is free for anyone that is preparing for bankruptcy and any advice provided by the credit counselors is optional. You can implement or ignore the suggestions made by your counselor. As it is also confidential, there are few downsides to exploring this process.
#3: Hire a Lawyer with Bankruptcy Experience
Bankruptcy is subject to a specific set of laws. These laws aren’t fully understood by just any lawyer, and you deserve top-notch legal representation during this process. Given the specificity of Chapter 7 bankruptcy, you want to hire a lawyer who has prior experience with bankruptcy representation and advice. More specifically you want to look for a lawyer that has extensive prior experience with Chapter 7 bankruptcy cases.
#4: Gather Your Documentation and Understand the Means Test
Another requirement of Chapter 7 bankruptcy is the means test. To be eligible for Chapter 7 bankruptcy, an individual must make less than the median income for the state where he or she intends to file. In order to assess whether you qualify for Chapter 7 bankruptcy under the means test, your New York bankruptcy lawyer will need information about your wages, child support, alimony, and any other income. As all of this information needs to be collected, it is a fantastic time to collect other documentation necessary for filing for bankruptcy.
#5: Prepare Your Chapter 7 Bankruptcy Forms
The core of a Chapter 7 bankruptcy is the paperwork required for filing. There is an entire packet of paperwork that must be entirely and correctly completed before you file for Chapter 7 bankruptcy. Luckily, the majority of provided information you will need to complete these forms is collected and reviewed during the earlier stages of the preparation process. Despite the thorough planning and prep, your New York bankruptcy lawyer should review these forms before you submit the paperwork to the federal bankruptcy court.
Once you’ve finalized your Chapter 7 bankruptcy paperwork, you are ready to file a bankruptcy petition with the court.
Considering Chapter 7 Bankruptcy in New York?
No matter where you are in the preparation or process of Chapter 7 bankruptcy in New York, you can hire a bankruptcy lawyer for your case. At the Law Offices of Michelle Labayen, we represent clients through the entirety of the Chapter 7 process, including all preparation, review, and filing of your bankruptcy petition.
Our legal team can handle your bankruptcy case through to discharge of your debts and conclusion of your Chapter 7 bankruptcy. If you are ready to learn more about our legal services or the laws governing bankruptcy, contact the Law Offices of Michelle Labayen at (212) 381-6083.