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Bankruptcy Process in New York

Federal courts have exclusive jurisdiction over bankruptcy cases, and all bankruptcy cases must be filed in the federal Bankruptcy Court. For most individual debtors, it is their residence that determines the proper federal judicial district for filing. Other possible criteria to determine venue may include where the debtor’s principal place of business or principal assets are located. The debtor must have resided in the federal district for the greater portion of 180 days, generally meaning at least 91 days.

For individuals residing in Nassau County or Suffolk County, New York, all bankruptcy cases are filed in the Central Islip Division of the Eastern District of New York. Individuals residing in Brooklyn or Queens file in the Brooklyn Division of the Eastern District of New York.

If you are considering filing for bankruptcy in New York, you should contact an experienced bankruptcy attorney. Going through the bankruptcy process alone is usually a bad idea. There are many traps and pitfalls for the unwary debtor that can lead to the loss of valuable assets or result in the denial of a discharge.

Only an experienced bankruptcy attorney can:

  • Properly advise you as to whether you should file for bankruptcy
  • Advise you as to the proper timing of a bankruptcy filing
  • Properly advise you regarding property exemptions
  • Represent you at the Meeting of Creditors
  • Represent you in proceedings in the Bankruptcy Court

Long Island Attorney Explains New York’s Bankruptcy Process

Contact The Law Office of Andrew M. Doktofsky, P.C. at 631-812-7020 for a free consultation about the bankruptcy process in New York. Attorney Andrew M. Doktofsky is knowledgeable and experienced with New York bankruptcy procedures, and will guide you through every step of the bankruptcy process. Call The Law Office of Andrew M. Doktofsky, P.C. today to discuss filing for bankruptcy throughout the areas of Suffolk County and Nassau County, New York.

Information Center for the Bankruptcy Process in New York

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Bankruptcy Pre-Filing Steps

Step One
Call my office. I will speak with you on the telephone to ascertain some basic information to determine if bankruptcy may be appropriate for you. If so, we will schedule an initial consultation at my office. I will tell you what documents to bring with you to the first office meeting.

Step Two
During the initial office visit, we will discuss your situation in detail. If necessary, an initial determination will be made to see if you pass the means test. We will review all of the information necessary to prepare your bankruptcy filing, including a list of your assets and debts. You will be given a household budget to take home and fill out. I will also provide you with instructions on how to take the required credit counseling course.
Step Three
Once you provide my office with the necessary information, the bankruptcy petition, schedules, Statement of Financial Affairs, Means Test and other documents will be prepared. Usually, either I or my assistant will need to speak with you on the telephone to clarify certain information. Once the petition is prepared, you will need to come into my office to review and sign the documents.

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Bankruptcy Filing

A Chapter 7 or Chapter 13 bankruptcy case begins when a debtor files a petition with the bankruptcy court. Your attorney will file this petition for you, in addition to all other required schedules and statements, after you have provided all necessary information.

In order to complete the required bankruptcy forms under Chapter 7 and Chapter 13, an individual needs to provide their attorney with the following:

  • A list of all creditors and the amount and nature of their claims;
  • The source, amount and frequency of the debtor’s income;
  • A list of all of the debtor’s property; and
  • A detailed list of the monthly living expenses for the debtor’s household.

The debtor must file the following with the court, in addition to the petition:

  • A schedule of assets, including all real property and personal property
  • A schedule of liabilities, including all secured, unsecured and priority debts
  • A schedule of contracts that have not yet been completed and unexpired leases.
  • A schedule of current income and expenditures, including a statement of any anticipated increases or decreases in income or expenses after filing
  • Statement of Financial Affairs
  • Statement of Intention for Secured Debts
  • Statement of Current Monthly Income and Means Test Calculation

Individual debtors under Chapter 7 and Chapter 13 must also file:

  • A certificate of credit counseling
  • Evidence of payment from employers that was received in the 60 days prior to the bankruptcy filing

The debtor must also provide the bankruptcy trustee with a copy of their most recently filed federal tax return or tax return transcript.

Spouses may file individual or joint petitions. If married, you must still provide income information for your spouse, regardless of whether you are filing an individual or joint petition, unless you live in separate households.

In a Chapter 7 bankruptcy case, all legal fees and filing fees must be paid before the bankruptcy petition is filed. In a Chapter 13 proceeding, some legal fees can be paid through the Chapter 13 repayment plan.

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Notice to Creditors

Shortly after the bankruptcy case is filed, notice is sent by the clerk of the bankruptcy court to all creditors that were listed by the debtor. This notice includes:

  • The deadline for creditors to object to discharge;
  • The date set for the Meeting of Creditors;
  • A notice that an automatic stay is in effect and that creditors may not take collection action against the debtor

If a creditor wishes to object to the debtor’s discharge, or the dischargeability of a particular debt, the creditor must file a complaint with the bankruptcy court by the deadline stated in the notice.

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Meeting of Creditors

Approximately three to five weeks after the bankruptcy petition is filed, the trustee who is assigned to your case will hold a Meeting of Creditors, which is also called a Section 341 Meeting.

During this meeting, the trustee will put the debtor under oath, and the debtor will be asked questions by the trustee. Debtors are required to answer questions regarding their financial situation and property. If spouses have filed a joint petition, they are both required to attend the meeting. Despite the name of the meeting, creditors rarely attend, and the meeting is usually concluded very quickly. Creditors that do attend may also ask questions of the debtor.

Typical questions the trustee will ask the debtor at the Section 341 meeting in a Chapter 7 case include the following:

  • Did you read the petition before you signed it?
  • Is everything in the petition true and correct?
  • Do you wish to make any changes?
  • Have you listed all of your debts?
  • Have you listed all of your assets?
  • What do you do for a living?
  • Have you ever refinanced your home or taken a home equity loan?
  • If so, and you received any proceeds, what did you do with those funds?
  • Have you ever owned any real property other than current ownership?
  • If so, what happened to the property?
  • Are you in business for yourself?
  • If not, have you ever been in business for yourself?
  • If so, what happened to the assets of the business?
  • Does anyone owe you any money?
  • Do you have any potential claims for personal injury?
  • Can you sue anyone for any reason?
  • Has anyone died and left you any property?
  • Do you expect to inherit any property in the next six months?
  • Did you receive a tax refund this year?
  • Do you expect to receive a tax refund?
  • Have you repaid any friends or family members in the past year?
  • Have you transferred any property to anyone in the last six years?
  • What is the most money you have had in the bank in the past two years?
  • What caused you to go into debt?

Although the meeting is held at the bankruptcy court, it will not be conducted in front of a bankruptcy judge. The meeting is held in a room in the bankruptcy court. The debtor and debtor’s attorney sit at a table with the bankruptcy trustee. There will be many other people in the room who are also there for their meeting. As long as you are not the first debtor called, you will be able to listen to the questions that the trustee is asking. He or she will be asking you the same questions.

Usually, in a Chapter 7 case, nothing more is required after the Meeting of Creditors. If there are no objections, either by the bankruptcy trustee, the United States Trustee, or a creditor, the debtor will usually receive a discharge approximately 60 days after the first date set for the meeting.

Chapter 13 bankruptcy proceedings are somewhat different than Chapter 7. At the meeting with the Chapter 13 bankruptcy trustee, the focus is often on the debtor’s income and the debtor’s ability to make the payments under the proposed Chapter 13 plan. Approximately one month after the Section 341 meeting, there will be a hearing to confirm the debtor’s Chapter 13 plan.

If the debtor has made the required payments to the trustee, and there are no objections, the trustee will usually recommend confirmation of the plan. Once the plan is confirmed by the bankruptcy court, the debtor and creditors are bound by the terms of the repayment plan. The confirmation hearing may or may not be in front of a bankruptcy judge, depending on the particular judge’s rules.

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Effect of the Bankruptcy Discharge

A bankruptcy discharge releases the debtor from personal liability for specified types of debt incurred prior to the filing of the bankruptcy case, meaning that the debtor is no longer legally obligated to repay these debts. However, certain debts may not be discharged. The discharge prohibits creditors from harassing the debtor or taking any collection action against the debtor after the discharge. This includes legal actions and communication such as phone calls, letters, and other types of contact.

Under Chapter 13, the discharge is entered only after successful completion of the repayment plan, which usually takes between three and five years.

Although a debtor’s personal liability to repay his or her debts is discharged, any liens on the debtor’s property will remain after the bankruptcy proceeding, unless those liens were voided or otherwise extinguished in the bankruptcy proceeding. Read more about liens and bankruptcy.

In order to receive a discharge, the debtor must complete a course on financial management. Additionally, a debtor may not be able to file a subsequent bankruptcy proceeding for a certain time period after receiving a discharge. Read more about the required time between bankruptcy filings.

The court may revoke a discharge for some reasons, including:

  • The debtor fraudulently obtained the discharge;
  • The debtor failed to disclose the fact that he or she acquired or became entitled to acquire property that would have been considered property of the estate;
  • The debtor committed an “act of impropriety” under the Bankruptcy Code;
  • The debtor failed to explain any misstatements discovered during the bankruptcy proceeding; or
  • The debtor failed to provide requested documents or information during the bankruptcy proceeding.

Finally, a debtor may voluntarily pay off debts after the discharge has been granted. A debtor may wish to do so for the sake of the debtor’s reputation or if a debt is owed to a friend or family member. Or a debtor may wish to maintain a good relationship with a creditor, such as a family doctor.

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Bankruptcy Process Resources in New York

The Bankruptcy Court for the Eastern District of New York – This court serves the Eastern District of New York, including the counties of Nassau and Suffolk, and is a unit of the U.S District Court. All bankruptcy proceedings in the Eastern District of New York will be filed here.

USBC-EDNY Local Rules – This link is for the local rules for the United States Bankruptcy Court for the Eastern District of New York. These rules vary from the federal rules and are applicable only to the USBC-EDNY.

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.

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The Law Office of Andrew M. Doktofsky, P.C. | Long Island, New York Bankruptcy Process Attorney

Contact The Law Office of Andrew M. Doktofsky, P.C. today for a consultation about the bankruptcy process in Suffolk County and Nassau County, New York. Attorney Andrew M. Doktofsky will answer your questions about how bankruptcy works, and help guide you through the bankruptcy process. Call 631-812-7020 to discuss the bankruptcy process in New York and explore your options.



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