New York Bankruptcy FAQs

Nyack bankruptcy lawyer frequently asked questions

Lawyer Answers Frequently Asked Questions About Bankruptcy in New York

What Bankruptcy Options Are Available for Individuals and Families?

Chapter 13 bankruptcy allows a debtor to keep assets such as their home while creating a payment plan to repay debts over three to five years. Chapter 7 bankruptcy liquidates non-exempt assets such as cars with a value over $4,000, and unsecured debts, such as credit cards, will be discharged.

What Bankruptcy Options Are Available for Businesses?

In some cases, a business may need to liquidate its assets through a Chapter 7 bankruptcy in order to repay creditors. A business may also be able to complete a reorganization plan through a Chapter 11 bankruptcy that will allow it to continue operating while repaying debts. In addition, the Small Business Reorganization Act of 2019 created the option for Chapter 5 bankruptcy, which allows qualifying small businesses to create a reorganization and repayment plan through a more streamlined and simplified process than Chapter 11 bankruptcy.

Can Bankruptcy Stop the Foreclosure of My Home?

Filing a bankruptcy petition will trigger an automatic stay of any legal proceedings related to your assets and debts. This includes stopping a foreclosure sale of your home. You can then determine your options for discharging your debts through Chapter 7 bankruptcy, setting up a payment plan through a Chapter 13 bankruptcy, or exploring other options, such as a short sale, refinancing your mortgage, or other types of loan modifications. Our law firm can help you understand your options for avoiding foreclosure, and we will work with you to determine the best strategy for dealing with debts that you are unable to repay.

What Types of Debts Cannot Be Discharged Through Bankruptcy?

While bankruptcy can eliminate unsecured debts such as credit card balances, secured debts, such as a home mortgage or auto loan, typically cannot be discharged, and collateral can be seized if these debts are not repaid. Other types of obligations that cannot be discharged include child support, spousal maintenance, criminal fines, and most student loans and tax debts.

What Types of Property Are Exempt From Liquidation?

In a Chapter 7 bankruptcy, debts will be discharged after a debtor’s assets are liquidated in order to repay creditors. However, certain types of assets are exempt in New York, including:

  • A homestead exemption applies to equity in real estate property. In Rockland County, this exemption applies to property with a value of up to $150,000.
  • Personal property exemptions apply for items such as clothing, furniture, some appliances, health aids, jewelry and artwork worth up to $1,000, and tools required for a person’s trade worth up to $3,000. If no homestead exemption is claimed, a person can also claim an exemption for $1,000 of cash or personal property.
  • A motor vehicle exemption for one vehicle worth up to $4,000.
  • Income exemptions including 90% of income earned within 60 days before filing for bankruptcy, 90% of payments made from trusts, and child support or spousal support payments a person receives.

Exemption amounts are doubled for married couples who file bankruptcy jointly.

How Will Bankruptcy Affect My Life Going Forward?

While bankruptcy may allow you to discharge debts that you are struggling to repay and ensure that your family can maintain financial stability, it can also affect your life for years to come. Your credit score will take a hit, and this may affect your ability to apply for loans or receive credit cards. However, by managing your finances and making timely payments on any new debts, you can improve your credit rating. Your bankruptcy will also show up in background checks, and this may affect your ability to obtain employment or housing. However, the benefits of bankruptcy often outweigh these negative effects, and our law office can help you understand your best options for addressing overwhelming debts while meeting your family’s needs.

Contact Our Rockland County Bankruptcy Lawyer

If you have any other questions about bankruptcy, contact us at 845-358-7100 and schedule your free consultation today. We will work with you to determine your best options for preventing the foreclosure of your home, addressing your outstanding debts, and helping your family or business maintain financial security. Se Habla Español.