When people think of New York, visions of the Statue of Liberty, Times Square, or the Empire State building often pop up. It’s easy to objectify New York as a place where tourists go to visit, or where great companies conduct business. New York may be all of these things, but it is also a state where hard working individuals and families strive to make ends meet by putting food on the table or paying the bills.
Credit card, medical, or just your average, every day debt can sneak up on New York residents. It’s easy to get caught up in the daily grind, and forget about mounting bills. But when creditors start knocking on your door or a judgment is placed against your bank account or your paychecks, life quickly becomes stressful and unenjoyable.
A Chapter 7 bankruptcy can change your financial situation. Filing for Chapter 7 bankruptcy puts a stop to creditor harassment, it can halt foreclosures, and lift garnishments or frozen bank accounts. While a bankruptcy can stay on your credit report for 10 years, it can also wipe away nearly all of your credit card debt.
New Yorkers File for Bankruptcy, Chapter 7 Get a Fresh Start
Say goodbye to medical bills, credit card debt, old tax debt, loans and a host of other debt weighing you down. Chapter 7 has allowed many New Yorkers get a fresh start on life. Once you file your bankruptcy petition (a petition is a set of your financial documents) with the court, the positive effects begin. By law, creditors are not allowed to contact you while you are in a bankruptcy. All negotiations and communication is handled by your bankruptcy attorney.
There is some debt that cannot get discharged in a Chapter 7 bankruptcy. Your bankruptcy attorney will counsel you on your specific financial situation, but typically, the following debts cannot be discharged:
- School Loans
- Recent taxes and tax liens
- Alimony or child support payments
- Any money received by committing fraud, embezzlement or other false pretenses
If you are unsure about what debts will be discharged in your bankruptcy, contact a local New York bankruptcy attorney for specific legal counsel.
Do Not Pass Go Until You Meet the Requirements
Remember when you used to play the game Monopoly and you were not allowed to pass “Go” when you landed on jail? In bankruptcy, much like Monopoly, there are certain requirements every debtor must meet before filing for bankruptcy. Without passing the requirements, a debtor’s bankruptcy case could be dismissed without any debts discharged.
Median Income Level
The first way a bankruptcy attorney determines if you can file for bankruptcy is through your income level. The median income level varies by state and can change annually. For residents who wish to file in New York the average income level is broken down by family size:
- One individual: $46,295
- Two individuals: $57,777
- Three individuals: $68,396
- Four individuals: $83,942
- More than four individuals: Debtors need to add $7,500 per person to the base income.
New Yorkers must fall at or below the income level listed above based on their family size. If you exceed the income level there is one other way you may qualify for Chapter 7. The means test, which is a mathematical procedure that examines your debt to asset ratio, can help individuals determine whether a Chapter 7 bankruptcy will benefit their current financial situation. Your bankruptcy attorney will help you with the means test as the results will need to be submitted with you bankruptcy petition if you pass.
Yes, You Can Keep the Shirt on Your Back After Filing for Chapter 7
A common myth of any type of bankruptcy is that debtors lose everything thing they own. This might have been true years ago, but since the Bankruptcy Reform Act in 2005 was passed, laws have changed. In every state there are a specific set of codes, called exemption laws that allow debtors who file a chance to keep certain assets and specific property. The exemption laws for New York include:
- Home exemption: Up to $150,000 is exempt for a primary residence. (Note this amount is dependent upon the county you live in.)
- Personal property amount: Debtors are allowed to keep a group limit of $10,000 worth of personal goods. These assets include:
- Wearing apparel
- Household furniture
- $1,000 maximum limit for pets and their food
- $1,000 maximum limit for wedding rings
- $3,000 maximum limit for professional machinery or tools
- $4,000 maximum limit for one vehicle
- $1,000 maximum limit for personal cash (only can be used without the homestead exemption.)
- Pensions:
- 100% Military pay and pensions for enlisted individuals
- 100% New York State employees
- 100% Medal of Honor employees
- 100% Veterans Administration benefits
- 100% CIA employees
- Benefits – Includes 100% of the following
- Accelerated death benefits of life insurance policies
- Social Security
- Volunteer firefighter’s insurance benefits
- Disability insurance benefits
- Worker’s compensation
- Worker’s disability
- FEMA benefits
- Federal civil service retirement benefits
- ERISA benefits
- Other available exemptions:
- Up to $600 in shares for savings and loan associations
- 90% of milk sales proceeds for farmers
- 100% of rent, utility and other security deposits
- Up to $10,000 in value for specific tuition savings programs
- 100% of burial grounds
- Up to $7,500 in compensation due in pecuniary losses due to bodily injury
Additionally, New York allows debtors to choose between state or federal exemption laws. This provides debtors with a chance to customize their bankruptcy filing to keep assets that mean the most to them.
Don’t allow your debt to pile up and cause you stress. Contact a local New York bankruptcy attorney today to get rid of your debts.
New York Bankruptcy Courts
James T. Foley, United States Courthouse
445 Broadway Room 330
Albany, New York 12207
Phone: (518) 257-1661
Conrad B. Duberstein United States Courthouse
271 Cadman Plaza East, Suite 1595
Brooklyn, New York 11201-1800
Phone: (347) 394-1700
Olympic Towers
300 Pearl Street, Suite 250
Buffalo, New York 14202
Phone: (716) 362-3200
Alfonds M. D'Amato United States Courthouse
Federal Plaza, Room 100
Central Islip, New York 11722
Phone: (631) 712-6200
Alexander Hamilton Custom House
One Bowling Green, Room 615-3
New York, New York 10004
Phone: (212) 668-2870
355 Main Street, 1st Floor
Poughkeepsie, New York 12601
Phone: (845) 452-4200
Kenneth B. Keating Federal Building
100 State Street, Room 1220
Rochester, New York 14614
James M. Hanley Federal Building
100 South Clinton Street, Suite 315
Syracuse, New York 13261-6100
Phone: (315) 285-1600
Alexander Pimie Federal Building
10 Broad Street, Room 230
Utica, New York 13501
Phone: (315) 793-8101
Charles L. Brieant Jr. United States Courthouse
300 Quarropas Street, 2nd Floor
White Plains, New York 10601-4150
Phone: (914) 390-4060