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Can Consumers Still File for Bankruptcy in New York?

Can Consumers Still File for Bankruptcy in New York?Written by Craig D. Robins, Esq.

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Yes!  Bankruptcy Is Still Available in New York

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In 2005, Congress made drastic revisions to the bankruptcy laws.  Even though that was three years ago, clients regularly ask me if they can still file for bankruptcy.

Most people still qualify.  We find that 7 out of 8 people who would have qualified for Chapter 7 bankruptcy under the old laws still qualify under the new laws.

These laws make the bankruptcy process more involved, and impose many new obligations on both debtors and their attorneys.  However, most consumers, especially those on Long Island, are still eligible for Chapter 7 bankruptcy.

The essence of the new laws is demonstrating eligibility for filing by using a series of formulas and calculations called the “means test.”

The new bankruptcy laws also require a 30-minute bankruptcy credit counseling session by phone with a court-approved not-for-profit credit counseling agency prior to filing, and a similar session, called debtor education, after filing.

Debtors must also produce copies of pay stubs and recent tax returns.

Here’s the bottom line:  Although the laws have made bankruptcy much more complex than it ever was before, the truth is that most people who would have qualified for Chapter 7 bankruptcy [1] under the old laws still qualify under the new laws. Those who don’t qualify for Chapter 7 can usually file a payment plan bankruptcy — Chapter 13 bankruptcy [2].

An experienced New York bankruptcy lawyer should be able to quickly ascertain which bankruptcy chapter is best.

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