Facing consumer bankruptcy in New York can be overwhelming. Many New Yorkers consider bankruptcy to be a last resort. Nonetheless, bankruptcy can be the best option for many New Yorkers who are struggling with debt. Consumer bankruptcy is a legal process that helps a person who cannot pay his or her debts get a fresh financial start. Federal law governs the consumer bankruptcy process. Thus, all consumer bankruptcy proceedings take place in federal court.
One of the key benefits of filing for consumer bankruptcy in New York is that the bankruptcy process stops creditors from trying to collect debts until the bankruptcy becomes finalized. If you are concerned about how to pay your debts and bills, the Law Offices of Barton P. Levine can help. Founding attorney Barton P. Levin has over 35 years of experience helping consumers file for bankruptcy. Contact our law firm today to schedule your initial consultation and get the process started.
What Can Filing for Consumer Bankruptcy do for Me?
Filing for bankruptcy cannot solve all problems for those in financial difficulties. However, for many New Yorkers, filing for consumer bankruptcy a way to discharge their debts and gain a fresh financial start. By filing for consumer bankruptcy, a New Yorker may be able to stop a mortgage foreclosure temporarily, stop a car from repossession, and stop a wage garnishment. In other words, filing for bankruptcy can give New Yorkers a temporary break so they can focus on coming up with a plan to repay creditors. Bankruptcy can also help New Yorkers keep some of their possessions for the long term. The consumer bankruptcy process offers individuals a fresh start.
What Assets are Not Protected by Consumer Bankruptcy?
Bankruptcy does not protect all assets from forfeiture. When a debtor owes money on a car loan or mortgage, the debtor will still have to make payments in order to keep the property. However, the bankruptcy process allows the debtor to force these creditors to accept payments over time. When the debtor secured debts after filing for bankruptcy, the bankruptcy court may not discharge those debts. Also, individuals who file for bankruptcy cannot discharge or get rid of the following types of debts:
- Child support
- Many types of student loan debts
- Court orders for restitution
- Fines resulting from criminal convictions
- Some tax liabilities
What Type of Bankruptcy Should the Debtor File?
Most New York consumers file either Chapter 13 bankruptcy or Chapter 7 bankruptcy. When debtors own a family farm or a small business, other types of bankruptcy may work best. Attorney Barton P. Levine helps consumers determine which type of bankruptcy is the most advantageous for them.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is one of the most common types of bankruptcy. In Chapter 7 bankruptcy, the debtor petitions the bankruptcy court to discharge his or her debts. At the end of the Chapter 7 Bankruptcy process, the court discharges or wipes out the debtor’s debt in exchange for giving up certain types of property.
If I File for Chapter 7 Bankruptcy, can I Keep Any Assets?
Bankruptcy judges will allow debtors to keep certain property and assets that are exempt. Any property that is not considered exempt is not protected. During the Chapter 7 bankruptcy process, the court will require debtors to sell assets that are not exempt. The money from the sale of the property will go to pay creditors. Once all of the creditors have received payment from the sale of non-exempt assets, the remaining debts will be discharged.
A bankruptcy court will not discharge a home mortgage loan or a car loan. Even while filing for Chapter 7 bankruptcy, mortgage and loan creditors can still take the debtor’s property in order to cover the amount of the debt. New York exceptions include the following:
- $82,775 in home equity
- $4,425 in equity in a car
- Most household goods, clothing, furniture, a TV, and a computer
- $3,300 worth of tools and books needed for employment
- $1,100 in cash or property for those who don’t have a home exemption
- Social Security benefits
- Child support payments
- Unemployment insurance benefits
- Veteran’s benefits
- Retirement pensions and funds
- Public assistance payments
What is the “Means Test” for Chapter 7 Bankruptcies?
To qualify for a Chapter 7 bankruptcy, the debtor’s means must fall below a certain level. Debtors who make too much money will not pass the Chapter 7 means test. The debtor must submit documents proving their current monthly income and expenses. The means test for Chapter 7 bankruptcy only applies to debtors who mainly have consumer debts like medical death and credit card death. If the debts are mainly business debts, the debtor typically does not need to pass the federal means test to qualify for bankruptcy.
What is a Chapter 13 Bankruptcy?
Chapter 13 bankruptcies are debt adjustment bankruptcies. When debtors do not pass the means test required for Chapter 7 bankruptcy, they may qualify for a Chapter 13 bankruptcy. A Chapter 13 bankruptcy is also known as a wage earner plan. Many debtors who do not qualify for a Chapter 7 bankruptcy, but who want to retain their assets file for Chapter 13 bankruptcies.
In Chapter 13 bankruptcy, debtors may be allowed to keep their valuable property as long as they can make payments to their creditors. In order to successfully file for a Chapter 13 bankruptcy, the debtor must prove that he or she has enough income to pay for their necessities and keep up with the required minimum payments.
Our Consumer Bankruptcy Law Firm can Help
At the Law Offices of Barton P. Levine, we are dedicated to providing our clients with qualified bankruptcy representation. Our Manhattan bankruptcy law firm services clients throughout the New York City Area. Contact our law firm online or call us toll-free at (516) 512-8903 to schedule your free initial consultation.