Personal bankruptcy in New York is a big deal. In the New York bankruptcy statistics released in 2002, just less than 70,000 people filed for personal bankruptcy in one year. Since personal bankruptcy so common, it’s important to have a good understanding of how it all works. Here’s a brief guide to the New York bankruptcy laws for individuals.
Just like in other states, New York bankruptcy law allows for several different types of personal bankruptcy. The most common filing by far is Chapter 7 bankruptcy – more than 55,423 individuals filed for personal bankruptcy through a chapter 7 in 2002 alone. A Chapter 7 is often called a straight bankruptcy, and it happens when an individual cannot pay their creditors. The individual’s assets liquidated, and the proceeds are used to cover some debts. A Chapter 7 personal bankruptcy stays on an individual’s credit report for 10 years, so this is no small matter.
One advantage to filing a Chapter 7 personal bankruptcy under New York bankruptcy law is that an individual is allowed to make some assets exempt from the bankruptcy proceedings. For example, New York bankruptcy law allows some real estate to be exempted, typically $10,000 per individual or $20,000 per couple. A $2,400 automobile is exempt under New York bankruptcy law, as are Social Security benefits, veterans’ benefits, workers’ compensation, and unemployment compensation. Filing for personal bankruptcy costs a lot – but it doesn’t cost everything.
There are a few strange exemptions to personal bankruptcy filings under New York bankruptcy law that some people may want to take advantage of. For instance, cooking utensils and tableware are exempt up to $5,000, as is a church pew, sewing machine, and pet food (up to 60 days worth). When filing for personal bankruptcy, be sure to do some research to find out things like these that you may be able to hold on to.
Before filing for personal bankruptcy, decide if you need an attorney. Attorneys are well-trained in navigating the myriad complexities of New York bankruptcy law and may be able to save you money in the long-run. Also, be sure you gather up as much financial information as you have in preparation for your personal bankruptcy filing. This information is needed by the court to help them administer the bankruptcy.
In a few weeks, the court will call a meeting of the creditors involved in your personal bankruptcy filing. You need to attend this meeting, but the creditors may not. If there are no challenges to the personal bankruptcy within the next few months, you will receive notice in the mail that the bankruptcy was successful.
Keep in mind – filing for personal bankruptcy isn’t something to be taken lightly. New York bankruptcy law is designed to have some repercussions for debtors who need to take this course of action. Don’t expect to get off easy, but sometimes a personal bankruptcy filing is still the best course of action to take.
Sources:
http://www.bankruptcyinformation.com/NY_exemp.htm
www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter7.html
