What you need to know about New York bankruptcy laws
The US federal bankruptcy laws apply and govern bankruptcy proceedings in the state of New York. This means that New York bankruptcy laws and proceedings follow the rules of the US Federal Bankruptcy Code under Title 11 of the US Code. This also means that if you are a single or married individual living in New York, or if you have a business anywhere in the state of New York, when you file for bankruptcy, you will have to follow federal procedure. This also means that you must file for bankruptcy in a federal court and not in a state court of New York.
Bankruptcy, a legal remedy
New York bankruptcy laws are a legal remedy for persons and companies who cannot pay their debts. When they file for bankruptcy, their creditors cannot sue them for collection of payment on the debts they owe. Instead, the debts will be discharged; or the debts will be paid from the properties of the debtor; or, the debts will be paid in accordance with a payment plan approved or confirmed by the bankruptcy court. A debtor whose debts have been discharged can then start anew without being weighed down and distressed by creditors dragging them to court.
Chapter 7 Bankruptcy applies to honest debtors who can no longer pay their debts because they have no cash or properties which may be used to pay their debts. This is called a no-asset case. In a no-asset case, the debts will be discharged and the debtor will not turn anything over. In an asset chapter 7 case, a debtor will have non-exempt property that can be liquidated or turned into cash by the trustee in order to pay of creditors. An exemption is created by state law and determines the amount of value a debtor can keep free and clear of creditors claims.
Chapter 13 Bankruptcy to honest debtors who have a regular salary or pay from his job but whose pay is not enough to cover living expenses as well as pay off all his debts when they are due. When this person files for bankruptcy, he will have to submit a payment plan for approval of the court. The payment plan will set forth in detail the amount he can pay on a monthly basis. These small regular payments will continue for three to five years, at which point the debts are discharged.
Businesses and business owners may also file petitions in bankruptcy but unlike individual persons, who have no assets with which to pay off their debts, businesses have assets such as accounts receivable, machinery, equipment and other properties which can be pooled, converted into cash and distributed as payment to the creditors of the company.
Petition in bankruptcy
Filing for bankruptcy under New York bankruptcy laws entails the filing of a petition. A petition is a written form that has to be filled up by the debtor and submitted to the bankruptcy court. The petition details all the facts about the financial condition of the debtor as well as all his properties. The law requires the debtor to make a full disclosure of all his properties as well as his debts so that the court may discharge the debts.
We at the Maxwell Law Firm, PLLC assists clients with debt settlement, foreclosure defense, tax collection defense, filing for chapter 7 and chapter 13 bankruptcy and mortgage home loan modifications . Contact us and speak to our competent and experienced New York Bankruptcy Attorney so that you can get the debt relief you are seeking. Please give us a call at 718-701-0095 to discuss your options.