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Deciding to file bankruptcy can be a daunting and stressful process, especially if you’re attempting to do it alone. Understanding your rights and obligations throughout the filing process is just one of many important things that you’ll need to learn before you begin filing. In order fully understand your restrictions when it comes to representing yourself in a bankruptcy case, take a look at the sections below.

What is Bankruptcy?

Before getting to the requirements for filing for bankruptcy in New York, it’s important to get a firm grasp of what the process entails. Bankruptcy is a legal proceeding that allows individuals and businesses to eliminate or repay their debts under the protection of the bankruptcy court. It provides relief to debtors who are unable to meet their financial obligations by either liquidating assets to repay creditors (Chapter 7 bankruptcy) or creating a repayment plan (Chapter 13 bankruptcy). Bankruptcy also offers certain protections, such as an automatic stay that halts collection actions by creditors.

Types of Bankruptcy

In New York, bankruptcy law primarily consists of two main chapters: Chapter 7 and Chapter 13. Each chapter serves different purposes and is suited to different financial situations:

Chapter 7 Bankruptcy:

Also known as “liquidation” bankruptcy, Chapter 7 involves the sale of non-exempt assets to repay creditors. However, many assets are protected under New York’s exemption laws, allowing debtors to retain essential property. Chapter 7 is typically suitable for individuals with little to no disposable income and significant unsecured debts, such as credit card debt or medical bills.

Chapter 13 Bankruptcy:

Chapter 13 bankruptcy, often referred to as “reorganization” bankruptcy, involves creating a repayment plan that allows debtors to repay their debts over a period of three to five years. This chapter is ideal for individuals with a regular income who can afford to make monthly payments but need assistance in restructuring their debts to make them more manageable.

Who is Eligible for Bankruptcy in New York?

 

To file for bankruptcy in New York, individuals must meet certain eligibility criteria established under federal bankruptcy law. While the specific requirements may vary depending on the chapter of bankruptcy, some general eligibility criteria include:

  • Residency: The debtor must have lived in New York for a specified period before filing for bankruptcy.
  • Credit Counseling: Debtors are required to undergo credit counseling from an approved agency within 180 days before filing for bankruptcy.
  • Means Test: In Chapter 7 bankruptcy, debtors must pass a means test to determine if their income falls below the state median and qualifies them for Chapter 7 relief.

Questions about your specific eligibility for filing for bankruptcy in New York can easily be answered through a free consultation. Take a look at the section below for more details.

Do I Have to Hire A Lawyer to File for Bankruptcy in New York?

In the United States, including in the State of New York, individuals have the right to file for bankruptcy without hiring a lawyer, but it’s generally not recommended. Bankruptcy law is complex, and the process can be challenging to navigate without legal expertise. Here are some points to consider:

  • Legal Knowledge: Bankruptcy law is intricate and varies depending on the jurisdiction. A bankruptcy lawyer has the knowledge and experience to guide you through the process, ensuring that you understand your rights, obligations, and options.
  • Paperwork and Procedures: Filing for bankruptcy involves completing and filing numerous forms and documents with the bankruptcy court. A lawyer can assist you in preparing these documents correctly, reducing the risk of errors or omissions that could delay your case or lead to complications.
  • Legal Representation: Having a lawyer represent you can be invaluable, especially if issues or disputes arise during the bankruptcy process. Your lawyer can advocate for your interests, negotiate with creditors, and represent you in court proceedings.
  • Maximizing Benefits: A bankruptcy lawyer can help you understand which type of bankruptcy (Chapter 7, Chapter 13, etc.) is most suitable for your situation and how to maximize the benefits available under the law.
  • Avoiding Mistakes: Mistakes in a bankruptcy filing can have serious consequences, including dismissal of your case or loss of assets. A lawyer can help you avoid common pitfalls and ensure that your bankruptcy proceeding goes as smoothly as possible.

While it’s technically possible to file for bankruptcy without a lawyer (known as filing “pro se”), it’s generally not advisable unless your situation is straightforward, you have a solid understanding of bankruptcy law, and you’re willing to invest significant time and effort into researching and preparing your case.

Why deal with the hassle? If you’re considering filing bankruptcy, it’s likely you’re already spending hours every day looking for higher-paying employment, negotiating with your creditors, and organizing your financial situation. Building a bankruptcy case, filing paperwork, making court appearances, and meeting deadlines can be an incredibly taxing process, let alone time-consuming. A New York bankruptcy lawyer can help shoulder the burden of a bankruptcy filing. If you’re ready to get started, call Fakhoury Law at (845)-896-5200 or use our online contact form to schedule a free consultation.

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