NY State Bankruptcy Laws Compared To Other States
If you are a New York resident considering filing for bankruptcy, there are some important things you need to know. While US bankruptcy laws are governed by federal law and share certain similarities across the nation, the state of New York has a different process. Here’s what you should know when filing for bankruptcy in New York and how the process differs in other states.
Credit counseling is a requirement in New York
Before filing for either Chapter 7 or Chapter 13 bankruptcy, there is a credit counseling course that you have to attend and participate. This course is conducted by an agency that is approved by the US Trustee in NY. Attendance is mandatory and you will need its certificate of completion to comply with the requirements for application of bankruptcy within 180 days after the course has been completed.
If you cannot use it before 180 days, then it will expire and you need to repeat the course should you plan to file again in the future. You can attend the course over the phone, in person, or online.
NY exemptions to bankruptcy laws
New York provides a list of its own bankruptcy exemptions so that you can identify which among your properties can be kept when filing for Chapter 7 bankruptcy and the amount of money you need to repay your unsecured creditors if you choose to file for Chapter 13 bankruptcy.
A NY resident filing for bankruptcy is given the options to choose between its state exemptions or the federal exemptions. Once you’ve made your choice of either NY or federal, there is no way you can opt out or pick from each group of exemptions.
The NY bankruptcy forms and the means test
There are notable differences in the bankruptcy filing process for residents of New York in relation to other US citizens and how they complete bankruptcy application forms.
In order to know which type of bankruptcy law you can apply, you’ll need to compare your income with the median income of households the same size as yours in New York.
If you see that your income is lower than the median, you’re easiest option is Chapter 7 bankruptcy. If you want to pursue filing for Chapter 13, you may do so provided that your repayment plan is three years instead of five years. This is the means test.
An income above New York’s median may qualify the filer for Chapter 7 but he or she must provide detailed information about their expenses and payments on secured debts. This is not only true for Chapter 7 but also for Chapter 13 as well.
Lastly, file your bankruptcy form in the appropriate New York bankruptcy court. There are various sources online on how to identify the district where you can file for bankruptcy. Also, check where you can find NY's bankruptcy courts. Better still, talk to a bankruptcy lawyer determine your chances of being able to file for bankruptcy and learn more about New York bankruptcy laws.