Filing for bankruptcy in New York can feel very overwhelming, and many New York residents have misconceptions about what this means. But by understanding how bankruptcy works in New York and the different steps it requires, you can move forward with filing for bankruptcy with greater peace of mind.
At Grady BK, PLLC, we are committed to providing our clients with the clarity that they need if they are considering bankruptcy. We understand how stressful this can feel, which is why we are committed to working with you one-on-one to come up with the best possible solution for your financial situation. In this article, we will discuss how to file for bankruptcy in New York, what steps you need to take, and what life post-bankruptcy will look like.
What Is Bankruptcy?
Bankruptcy is a legal process that allows individuals to find relief from financial obligations, specifically if they have a substantial amount of debt that they cannot pay off. The purpose of bankruptcy is to have certain debts discharged (wiped away) so that you can have a fresh financial start.
There are also different types of bankruptcy designed for different individuals and financial needs, which can have an impact on what the bankruptcy process looks like. Here are two examples of the most common forms of bankruptcy in New York:
- Chapter 7: Chapter 7 bankruptcy is a relatively quick and simple bankruptcy option designed for those with lower incomes or a less stable income. You can get the vast majority of your dischargeable debt discharged, allowing you to move toward a better financial future.
- Chapter 13: Chapter 13 bankruptcy is a type of bankruptcy designed for higher earners or those who have a more stable income. It uses a repayment plan method that lasts 3 to 5 years, allowing you to make progress on paying off all of your debts in a more realistic way. Once your payment plan has ended, any remaining dischargeable debts are usually discharged.
What Happens Before You File?
Before you begin the New York bankruptcy process, you will need to accomplish a few things. Firstly, it is required that all New York residents filing for bankruptcy undergo credit counseling six months before they file for bankruptcy.
You also need to use the means test to determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy. This test analyzes your income in comparison to the median income for New York.
Additionally, you need to gather financial paperwork that establishes your income, monthly living expenses, assets, and debts.
Although not legally required, it is strongly recommended that you also get the help of a bankruptcy attorney in New York. An attorney can help you with every step of this process, ensuring it goes smoothly.
Filing For Bankruptcy in New York
Once you have completed the steps outlined above, the next thing you need to do is actually file for bankruptcy in New York. Here is an overview of what this process looks like:
- Complete the necessary bankruptcy forms.
- Pay the court filing fee.
- File the bankruptcy petition.
- Mail the required documents to your bankruptcy trustee.
- Attend the 341 meeting with your trustee.
Also, if you’re filing for Chapter 13, you will need to file a proposed repayment plan with the rest of your financial documents.
What Happens After You File For Bankruptcy?
Many people feel as though bankruptcy will forever impact their financial future, but that isn’t the truth. Life after bankruptcy provides you with a chance of a better financial future where you aren’t being weighed down by debt.
So, here are some tips for when you are navigating life post-bankruptcy:
- Start rebuilding credit as soon as possible by maintaining your monthly payment obligations. As time goes on, you can also apply for certain credit cards or small loans as a way of building credit.
- Maintain a strict budget to ensure you can meet your monthly obligations. This is especially important if you are currently on a Chapter 13 repayment plan.
- Work with a financial professional who can help you plan for your financial future.
FAQ Section
How long does bankruptcy usually take in New York?
The standard bankruptcy timeline for Chapter 7 is 3 to 4 months from filing to discharge. Whereas Chapter 13 can take 3 to 5 years before your repayment plan has been completed.
Will bankruptcy stop collection calls immediately?
Yes. When you file for bankruptcy, an automatic stay takes effect, which protects you from all collection efforts (calls, lawsuits, etc.) from creditors for the duration of your bankruptcy case.
Can I choose between Chapter 7 and Chapter 13?
Sometimes. However, some people will be required to file a Chapter 13 bankruptcy as they make too much money to file a Chapter 7 bankruptcy.
Will bankruptcy eliminate all of my debts?
No. Although bankruptcy can discharge many types of debts, there are some non-dischargeable debts. This includes things like most taxes, child support payments, alimony, and most legal fines.
New York’s Top Compassionate Bankruptcy Attorney
Filing for personal bankruptcy in New York can often act as a lifeline for those in significant debt who cannot pay it off on their own. At Grady BK, PLLC, we are here to help you with the entire bankruptcy process, whether you have already gotten started or still haven’t decided on the right type of bankruptcy. Having the representation of a bankruptcy lawyer in New York ensures you understand what the process entails and how you can move forward in the most effective way.
At Grady BK, PLLC, we will be here throughout the process so that you can file for bankruptcy correctly and address any issues that may come up along the way. We are also here to answer any questions you may have so that you can make confident and informed decisions regarding your financial situation.
Contact us today at 315-299-9005 to discuss your financial situation with a bankruptcy attorney in New York. Our team at Grady BK, PLLC, is here to help you begin the bankruptcy process so that you can start moving toward a brighter financial future.
