New York Bankruptcy Options
Planning, before filing any New York bankruptcy case, is absolutely essential. All
Chapters enjoy the protection afforded by an
automatic stay upon receiving a file number from the Clerk. But qualification for each chapter is
unique, with success determined by each person's financial history. All issues concerning
property exemptions, asset forfeiture, if any, compliance of past conveyances,
and potential relief granted are properly consider before choosing a particular chapter.
Current Chapters allowed for New York residents are:
Chapter 7 Bankruptcy in New York State
is the most popular chapter for
individual debtors because it wipes out debts completely and does not require
any further payment. However, qualification for Chapter 7 requires proof
of income below the state median average. In New York State, the median
income is significantly higher than in most other state, and in turn,
creates a more lenient standard for qualification for wage earners.
Chapter 11 Bankruptcy in New York State is the preferred
option for wealthy corporations and individuals. In exchange for
relatively expensive case administration requirements, more generous options and
debtor benefits are provided by the Code. Ch. 11 filings decreased nationwide since 2001, while
individual consumer cases, in all chapters, continue rising both in
total filings and as a percentage of state population.
Chapter 12 Bankruptcy in New York State applies only to family farmers.
As a term of legal art, Family Farmer is defined narrowly by the Code.
Because of the seasonal nature of agriculture businesses, unique Ch. 12 provisions
permit reorganization of debt and payments to coincide with
harvest seasons.
Chapter 13 Bankruptcy in New York State requires regular monthly
income for qualification and limitations on total debt. Employees, wage
earns, and sole proprietorships (small businesses) who currently earn regular income may reorganize
payments, extend terms, and decrease interest rates, as well as discharge the remaining debt
owed upon completing the plan.
Regulation of New York Bankruptcy Lawyers
Special limitations apply to New York bankruptcy lawyers according to the rules of procedure adopted by New York
bankruptcy courts. Attorney fees and filing fees are also subject to regulation. For more information, see:
A comprehensive reform act changed many requirements for
qualification, effective as of October, 2005. The "abuse prevention act"
included new limitations of qualification for Ch. 7, higher payments in Ch. 13
for some filers, restrictions on judicial discretion, and mandatory new penalties and
sanctions in new circumstances.
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