New York Bankruptcy Laws should be known by every resident of the state of New York. With the rising applications for bankruptcy across the country even the empire state has not escaped the worst effects of the most recent recession. The several businesses that closed and the sudden drop in real-estate value have taken its toll on the average citizens of New York. Much more depressing is the fact that in 2005, a new law was implemented that intensified the requirements and criteria for applying for bankruptcy protection and was also incorporated in New York bankruptcy laws.
To help you decide if bankruptcy is the most appropriate option for your current financial predicament, consult a lawyer. For most lawyers the initial consultation is free so you won’t have to worry about anything. A lawyer whom you can trust will be best so that the advice he gives you will not be biased. For debtors who do not want to hire a lawyer’s services, you can file the bankruptcy petition yourself. However, the bankruptcy process is quite complicated and expensive and a minor mistake while applying may cost you dearly.
If you have decided to employ a lawyer’s help, you should discuss which bankruptcy program is appropriate for you. There are two choices applicable for individuals, married couples, and families. You can choose Chapter 7 or the liquidation bankruptcy. For this program, debts that can be legally wiped out will be totally eliminated. A court randomly appoints a trustee to take charge of every debtor’s bankruptcy case. It is his responsibility to liquidate any of the non-exempt assets of the debtor. The proceeds will be amply distributed to the creditors and whatever debts remaining after the sale will be wiped out as deemed appropriate.
However before you can do all this, you will go through a rigorous process of application. One of the criteria is the means test where your monthly income is compared against the median income level of the state of New York. An income lower than the current income level, as determined by the US Census Bureau will guarantee a Chapter 7 eligibility.
For those debtors who unfortunately earned more than the median income, but are still up to their necks in debt, a Chapter 13 application is recommended. This bankruptcy protection program is also applicable for debtors who have a lot of property to lose. There is a repayment plan to follow in this program where you are given the chance to pay all your debts for 3 to 5 years. This repayment plan will also be supervised by the court trustee. It is his task to collect the monthly funds from the debtor and pay it accordingly to the creditors. There is a priority structure drafted by the bankruptcy court to distribute the debtor’s fund to each creditor.
If you are successfully admitted for bankruptcy protection, you will be given the chance to choose your exemptions. The federal laws specify a list of exemptions. New York bankruptcy laws also have a list of exemptions. The following is a partial list of the former’s exemptions:
• Your home or mobile home for up to $50,000;
• A vehicle for up to $2,400;
• 90% of earnings;
• Wedding rings; $35 for a watch; tools of trade for $600; books for $50; and
• Public benefits, proceeds from life insurance, and health aids.
Bankruptcy protection serves as a second chance to start anew, this should also serve as a lesson not to take the offer of credit card companies lightly.