Filing for Bankruptcy in New York

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Filing for bankruptcy in New York may be a good option for you if you are unable to afford to make monthly payments on your debt, and you continue to fall further and further behind. If you file for bankruptcy in New York, you may have the option of filing for either Chapter 7 or Chapter 13 bankruptcy. Depending on your situation and whether you are eligible for Chapter 7 or Chapter 13 bankruptcy, one may be more accommodating to your financial goals.

Chapter 7 vs. Chapter 13
Chapter 7 bankruptcy may be the right bankruptcy for you if you do not have many assets that you would like to keep following the bankruptcy. In addition, you must meet the Bankruptcy Code’s eligibility requirements before you can file for Chapter 7 bankruptcy. To be eligible for Chapter 7 bankruptcy, you must earn less than the median income for the state, or you must have little disposable income remaining after paying your necessary expenses each month. As of 2011, the median income in New York is $45,931 for a single individual. If you earn more than the median income for the state of New York, the bankruptcy trustee will evaluate your disposable income and whether you have an adequate amount of disposable income each month to repay your debt without filing for bankruptcy. The smaller the amount of disposable income you have remaining each month, the more likely you are to be eligible to file for Chapter 7 bankruptcy.

In contrast, filing for Chapter 13 in New York allows you to catch up on your debts by making monthly payments to the Chapter 13 bankruptcy trustee. In a Chapter 13 bankruptcy, you will create a Chapter 13 repayment plan that describes how you will repay a portion of your debt to your creditors. To be eligible to file for Chapter 13 bankruptcy in New York, the court will want to see evidence of your income for at least the previous 6 months to verify that you will be able to afford your Chapter 13 monthly payments. However, the income can come from any source including spousal support, a pension, or Social Security benefits.  At the completion of the Chapter 13 repayment plan you will receive a bankruptcy discharge.

Bankruptcy Discharge
A bankruptcy discharge erases all debts that were included as part of your bankruptcy case. In a Chapter 7 bankruptcy in New York, you should receive notice of your bankruptcy discharge 3 to 4 months after you file the bankruptcy petition. However, if you file for Chapter 13 bankruptcy in New York, the court will not grant a discharge until the Chapter 13 repayment plan is completed. In addition, if you fail to make all monthly payments on time and in full each month to your Chapter 13 bankruptcy trustee, the court may dismiss your bankruptcy case, and you will not receive a bankruptcy discharge.

Filing for bankruptcy in New York is an important decision that will have a lasting impact on your financial situation. Therefore, it may be best to contact an experienced New York bankruptcy attorney, or the New York Bankruptcy court at http://www.nysb.uscourts.gov/ prior to submitting your bankruptcy petition. If you are considering filing for bankruptcy without the assistance of an attorney, visit http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources/FilingBankruptcyWithoutAttorney.aspx for additional information regarding how to file for bankruptcy on your own.