Eligibility for Bankruptcy in New York
When someone makes the decision to research their bankruptcy options, they will probably wonder if they are even eligible to file for bankruptcy. There are basic general filing requirements under the federal Bankruptcy Code, but there are also specific laws for each state.
The usual factors used to calculate if a person is eligible to file for bankruptcy are income, dischargeable and non-dischargeable debts, exempt property and any tax debts. Although most people can generally file for bankruptcy, it is important to contact an experienced New York attorney who will help you determine if you meet the specific requirements in New York.
Long Island Bankruptcy Attorney Explains Filing Eligibility
Contact Andrew M. Doktofsky, P.C. at 631-812-7020 for a consultation about whether you are eligible to file for bankruptcy. Attorney Andrew M. Doktofsky is knowledgeable and experienced with New York’s bankruptcy laws, and will make every effort to help you find the best possible outcome for your situation.
Call Andrew M. Doktofsky, P.C. today if you have questions about your eligibility to file for bankruptcy throughout the areas in Suffolk County and Nassau County, New York. This includes Deer Park, Babylon, West Islip, Bay Shore, Brentwood, Hauppauge, Huntington, Lindenhurst, Hempstead, and nearby areas.
The above download is included for your convenience and can help you paint a clearer picture of your total household monthly expenses. This information is essential in determining your eligibility for filing bankruptcy in New York.
- General Federal Filing Requirements
- Who Can File for Chapter 7 Bankruptcy in New York
- Eligibility to file for Chapter 13 Bankruptcy in New York
- Bankruptcy Filing Resources in New York
According to the federal Bankruptcy Code (Title 11 of the United States Code), a person that resides in, is domiciled in, has a place of business in, or has property in the United States can be a debtor for bankruptcy purposes.
Additionally, an individual must take a federally approved nonprofit budget and credit counseling briefing during the 180 day period before filing for bankruptcy in both Chapter 7 and Chapter 13.
An individual cannot be a debtor under Chapter 7 or Chapter 13 if he or she had been a debtor in a pending bankruptcy case at any time in the preceding 180 days and; the case was dismissed by the court for willful failure of the debtor to abide by orders of the court, or to appear before the court in proper prosecution of the case; or the debtor voluntarily dismissed the bankruptcy proceeding following a request by a creditor for relief from the automatic stay.
A person who is eligible to file for bankruptcy under Chapter 7 can be an individual, partnership, corporation or other business entity.
A person’s eligibility to file for Chapter 7 bankruptcy is determined by the “Means Test.” The means test requires a two step analysis. First, the debtor’s “current monthly income” must be calculated. Current monthly income is based on the debtor’s average monthly gross income, from all sources, received over the six month period preceding the bankruptcy filing. However, current monthly income does not include payments from social security. Income includes a spouse’s income, whether or not the spouse is also filing for bankruptcy (unless the debtor and spouse are living in separate households).
Additionally, any contributions to household expenses made by other persons (usually other adult family members) are included in calculating the debtor’s current monthly income. .If the debtor’s “annualized” current monthly income is less than the median income for New York State, then the debtor is eligible to file for Chapter 7 bankruptcy.
The following is the median income in New York State, based on family size, according to the U.S. Census Bureau:
- One Person in Household, $49,028
- Two People in Household, $62,377
- Three People in Household, $71,989
- Four People in Household, $88,642
- For households exceeding four people, add $8,100 for each individual in excess of four
If the debtor’s current monthly income is over the median income for New York State, then the second step of the analysis must be performed. In this second step, various deductions are taken off of the current monthly income to arrive at the debtor’s “monthly disposable income.” Some of the deductions are based on Internal Revenue standards.
Other deductions are specific to the debtor’s actual expenses. If the debtor’s monthly disposable income is less than the limits set by the bankruptcy code, then the debtor qualifies for Chapter 7. If the debtor’s monthly disposable income exceeds the limits set by the bankruptcy code, then a “presumption of abuse” applies. In that event, the Chapter 7 case would be subject to dismissal and the only alternative would most likely be for the debtor to file a Chapter 13 bankruptcy.
To be eligible to file for Chapter 13, an individual must have regular income, either through employment, operating a business, or other source of income. Married persons can file a joint Chapter 13 petition if at least one of the spouses has regular income. Chapter 13 is available for individuals only – a corporation or a partnership is not eligible to file for Chapter 13 bankruptcy.
A person filing for Chapter 13 bankruptcy must have noncontingent, liquidated, unsecured debts of less than $383,175 and noncontingent, liquidated, secured debts of less than $1,149,525. The debt limits also apply to a joint Chapter 13 filing, i.e. the combined debts of husband and wife cannot exceed the amounts stated above. If necessary, two separate Chapter 13 proceedings could be filed to avoid exceeding the debt limitations.
U.S. Trustee Program – This part of the Department of Justice is responsible for overseeing the administration of bankruptcy cases and private trustees. This site has information about the program and the federal bankruptcy system in general.
Federally Approved Credit Counseling Agencies – Prior to filing for bankruptcy, a debtor must take credit counseling from an approved agency. The following link lists all of the federally approved credit counseling agencies for the Eastern District of New York.
Chapter 7 of the United States Bankruptcy Code – Title 11 of the United States Code, which is entitled “Bankruptcy,” contains the federal rules for individuals, corporations or entities that file for bankruptcy. The Code governs all bankruptcy cases in the United States. This link is directly to the rules pertaining to Chapter 7 bankruptcy.
Chapter 13 of the United States Bankruptcy Code – Title 11 of the United States Code, which is entitled, “Bankruptcy,” contains the federals rules for individuals who want to file for bankruptcy. The Code governs all bankruptcy cases in the United States. This link is to the laws pertaining to Chapter 13 bankruptcy.
Andrew M. Doktofsky, P.C. | Bankruptcy Eligibility in Long Island, NY
Contact Andrew M. Doktofsky, P.C. today for a consultation about your eligibility to file for bankruptcy in Suffolk County and Nassau County, New York. His clients come from across Long Island, including North Bay Shore, North Babylon, Lindenhurst, Commack, Central Islip, Hempstead, Freeport, Long Beach and nearby areas. Andrew M. Doktofsky will determine if you are eligible to file for bankruptcy, and which type of bankruptcy you are eligible to file for. Contact Andrew M. Doktofsky, P.C. at 631-812-7020 for a consultation about whether you are eligible to file for bankruptcy in New York.