Laws for bankruptcy are no different in New York than they are in any
other state. However, every state has been affected by the 2005
Bankruptcy Act that was presented to Congress by the President. Since
this act's creation all the previous laws and regulations have been
Additions include increased monthly payments for Chapter Thirteen
bankruptcy and additional regulations for granting Chapter Seven
bankruptcy. Bankruptcy abuse prevention acts have also been passed to
disallow the abuse of the United States' bankruptcy system. These acts
have been included in recent years because the system has seen much
abuse from repeated offenders.
Filing for Bankruptcy
All bankruptcy petitions are to be filed towards the bankruptcy court
of New York. An individual is eligible to petition by his or herself or
a husband and a wife may petition together in a joint petitioning.
Before petitioning every United States citizen is required to submit to
a means test that will compare his or her income, household
arrangements, and debt to that of all other citizens in the state of
New York. A median will then be calculated.
Whether or not an individual falls above or below the median can
designate which kind of bankruptcy he or she can file. The new
stipulations from the 2005 Bankruptcy Act were partially place to limit
the number of individuals who are eligible for Chapter Seven
bankruptcy. This kind of bankruptcy eliminates debts in less than six
months and halt foreclosure. Because of the speed of Chapter Seven
bankruptcy, it is often abused.
Chapter Seven Bankruptcy
Chapter Seven bankruptcy is for the most severe of bankruptcy cases
where individuals cannot pay one hundred dollars against their debts
each month. A trustee is assigned to each Chapter Seven case and will
liquidate the non-exempt property. He or she will also divide the
exempt property from the non-exempt property.
The compensation received will be used to pay off creditors. Exempt
property is broken into different categories in the state of New York.
These categories include homestead, personal property, insurance,
miscellaneous, pensions, pensions, public benefits, tools of the trade,
These categories are divided by items and item values. These can
include real property up to ten thousand dollars, books up to fifty
dollars, cookery, cash under twenty-five hundred dollars, motor
vehicles under twenty-four thousand dollars, disability insurance, life
insurance, annuity contract benefits, alimony, child support, IRAs,
unemployment compensation, veteran's benefits, farming equipment,
uniforms, and ninety percent of earnings through milk dealers or unpaid
wages from the previous sixty days.
Chapter Thirteen Bankruptcy
Chapter Thirteen bankruptcy does not require individuals to sell any
property. Instead individuals are required to use their own income and
funds to pay off their debts. The New York bankruptcy court will
assigned a specific repayment plan according to the individual's
income, expenses, and how many people live in his or her household.
The payment plan will assign specific amounts to be paid each month for
five years. No plan can exceed this five-year limit nor be under three