If you’re considering filing bankruptcy in New York, NY, you’ll need to understand the types, costs, as well as some helpful advice to finding good attorneys.

Am I Qualified for Bankruptcy?

Qualifying for bankruptcy in New York, NY, or anywhere in the United States, involves meeting specific eligibility criteria set forth by federal bankruptcy laws. Bankruptcy is a legal process designed to help individuals and businesses with overwhelming debt find relief and a fresh financial start. In New York, as in the rest of the country, there are two main types of bankruptcy available to individuals: Chapter 7 and Chapter 13. Each has its own set of qualification requirements.

1. Chapter 7 Bankruptcy:

Chapter 7 bankruptcy is often referred to as “liquidation” bankruptcy. It involves the sale of a debtor’s non-exempt assets to pay off creditors, and any remaining eligible debts are discharged, meaning you are no longer legally obligated to repay them.

Qualification for Chapter 7 in New York, NY is determined primarily through a means test, which assesses your income, expenses, and ability to repay your debts. Here’s how the means test works:

a. Income Comparison: Your average monthly income for the past six months is compared to the median income for a household of your size in New York. If your income is below the median, you typically qualify for Chapter 7. If it’s above the median, further calculations are required.

b. Disposable Income: If your income is above the median, you’ll deduct certain allowable expenses from your income to determine your disposable income. If your disposable income is low enough, you may still qualify for Chapter 7.

c. Special Circumstances: In some cases, even if your income exceeds the median, you may qualify for Chapter 7 if you have significant special circumstances, such as high medical expenses or certain disability-related expenses.

d. Pass or Fail: If you pass the means test and meet other requirements (e.g., haven’t filed for Chapter 7 in the past eight years), you’re eligible for Chapter 7. If you fail, Chapter 13 may be an option.

2. Chapter 13 Bankruptcy:

Chapter 13 bankruptcy, also known as “reorganization” bankruptcy, allows individuals to create a repayment plan to pay off their debts over a specified period, usually three to five years.

Qualification for Chapter 13 in New York, NY doesn’t rely on the means test as heavily as Chapter 7. Instead, it focuses on your ability to propose a feasible repayment plan based on your income and expenses. Here are some key considerations:

a. Steady Income: You must have a regular income to fund the repayment plan. This income can come from sources like employment, self-employment, retirement benefits, or rental income.

b. Sufficient Disposable Income: After deducting necessary expenses (e.g., housing, food, transportation), you must have enough disposable income to meet the repayment plan’s requirements.

c. Debt Limits: There are debt limits for Chapter 13 bankruptcy. These limits are adjusted periodically for inflation.

d. Willingness to Cooperate: You must be willing to work with a court-appointed trustee to create and follow your repayment plan.

It’s important to note that bankruptcy is a complex legal process with long-term financial consequences. Before filing, individuals are generally required to complete credit counseling and receive a certificate of completion from an approved agency.

Consulting with a qualified bankruptcy attorney in New York, NY, is highly advisable to understand your specific situation, assess your eligibility, and determine which chapter of bankruptcy, if any, is suitable for your needs. An attorney can help you navigate the legal requirements, protect your assets to the fullest extent possible, and ensure that your bankruptcy filing proceeds smoothly through the court system.

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Do You Need a Lawyer to File For Bankruptcy in New York, NY?

While it is not strictly required to hire a lawyer to file for bankruptcy in New York, NY, or anywhere in the United States, it is highly advisable and often in your best interest to do so. Bankruptcy law is complex, and the process can be challenging to navigate without legal guidance. Here are several reasons why you should consider working with an attorney when filing for bankruptcy:

1. Knowledge of Bankruptcy Laws: Bankruptcy laws are intricate and constantly evolving. An experienced bankruptcy attorney in New York, NY, is well-versed in federal and state bankruptcy laws, as well as the local rules and procedures specific to the Southern and Eastern Districts of New York. They can ensure that your bankruptcy filing complies with all legal requirements.
2. Assessment of Eligibility: An attorney can help you determine if you qualify for bankruptcy and which chapter (Chapter 7 or Chapter 13) is most suitable for your circumstances. They will analyze your income, expenses, assets, and debts to provide you with the best advice for your situation.
3. Protection of Assets: Bankruptcy exemptions in New York, NY, allow you to protect certain property from being sold to repay creditors. An attorney can help you maximize your exemptions and preserve your assets, such as your home, car, and personal belongings.
4. Guidance Through the Process: The bankruptcy process involves numerous steps, including completing paperwork, attending hearings, and meeting deadlines. A lawyer can guide you through each phase, ensuring that you meet all requirements and deadlines to prevent your case from being dismissed.
5. Debt Discharge Maximization: Bankruptcy attorneys can assist you in structuring your bankruptcy to discharge as much debt as possible while avoiding common pitfalls that may lead to non-dischargeable debt.
6. Negotiating with Creditors: Attorneys can negotiate with creditors on your behalf, potentially securing favorable terms for repayment in a Chapter 13 bankruptcy or addressing any objections in a Chapter 7 bankruptcy.
7. Minimizing Mistakes: Bankruptcy forms and procedures are detailed and require accuracy. Even small errors or omissions can result in delays, dismissals, or other complications. Lawyers have experience in completing these forms correctly, reducing the likelihood of mistakes.
8. Representation at Court Hearings: If you’re uncomfortable with public speaking or unsure of what to expect at bankruptcy hearings, having an attorney can provide you with representation and support during court proceedings.
9. Debt Relief Planning: A bankruptcy attorney can help you develop a comprehensive debt relief strategy that goes beyond bankruptcy. They may advise on budgeting, credit rebuilding, and financial management to help you regain control of your finances after bankruptcy.
10. Legal Protections: Having an attorney can protect your rights and interests throughout the bankruptcy process. They can advocate for you and ensure that you are treated fairly under the law.

While you are not required to have a lawyer to file for bankruptcy in New York, NY, the benefits of working with an experienced bankruptcy attorney often far outweigh the costs. An attorney can help you navigate the complex legal process, protect your assets, and ensure the best possible outcome for your financial future. If you’re considering bankruptcy, it’s wise to consult with an attorney who can provide personalized guidance based on your unique circumstances.

Cost to File Chapter 7 Bankruptcy in New York, NY

The cost to file for Chapter 7 bankruptcy in New York, NY, involves several fees and expenses, and the total amount can vary depending on your specific circumstances.

1. Filing Fee: The primary fee for filing a Chapter 7 bankruptcy petition is the filing fee charged by the U.S. Bankruptcy Court. As of my last update, the filing fee for a Chapter 7 case was $370. However, these fees are subject to change, so it’s essential to check the current fee schedule on the U.S. Courts website or consult with the court directly for the most up-to-date information.
2. Credit Counseling and Financial Management Courses: Before you can file for bankruptcy, you are required to complete two mandatory courses: a credit counseling course before filing and a financial management course after filing. These courses are typically offered by approved agencies and may cost between $58 and $125 each. Some agencies offer reduced fees or fee waivers based on your income.
3. Attorney’s Fees: If you choose to hire an attorney to assist you with your Chapter 7 bankruptcy, you’ll need to pay attorney’s fees. The cost of legal representation can vary widely based on factors such as the complexity of your case and the attorney’s experience and location. Attorney fees for Chapter 7 bankruptcy typically range from $1,270 to $2,900 or more, but it’s essential to get a clear fee agreement from your attorney before proceeding.
4. Bankruptcy Trustee’s Fees: In a Chapter 7 bankruptcy, a trustee is appointed to oversee the liquidation of non-exempt assets and distribute the proceeds to creditors. The trustee is compensated through a portion of the assets they administer. However, in many Chapter 7 cases, there are no non-exempt assets to liquidate, so this cost is typically covered through the filing fee.
5. Miscellaneous Costs: There may be additional costs associated with your bankruptcy, such as obtaining credit reports, mailing, photocopying, and notary fees. While these expenses are relatively small, they can add up.

Keep in mind that bankruptcy laws and fee schedules can change over time, so it’s essential to verify the current fees and requirements with the U.S. Bankruptcy Court for the Southern District of New York or consult with a qualified bankruptcy attorney in New York, NY, for the most up-to-date information and guidance tailored to your situation.

Cost to File Chapter 11 Bankruptcy in New York, NY

The cost to file for Chapter 11 bankruptcy in New York, NY, can be substantial due to the complexity of this chapter and the involvement of more substantial debts and assets than other types of bankruptcy. Chapter 11 bankruptcy is primarily designed for businesses and individuals with substantial assets and debts who want to reorganize their finances while continuing operations. Here’s a breakdown of the typical costs associated with filing for Chapter 11 bankruptcy:

1. Filing Fee: The initial filing fee for a Chapter 11 bankruptcy case in New York, NY, is significant and depends on the total amount of debt listed in the bankruptcy petition. It’s crucial to note that the fee is subject to change, so you should verify the current fees on the U.S. Courts website or with the bankruptcy court for the Southern District of New York.
2. Attorney’s Fees: Chapter 11 bankruptcy is highly complex and typically requires the assistance of experienced bankruptcy attorneys. The fees charged by attorneys can vary significantly based on the complexity of your case, the size of your business, and the extent of legal services required. In Chapter 11 cases, attorney fees can range from tens of thousands to hundreds of thousands of dollars. It’s essential to discuss fees with your attorney and obtain a clear fee agreement before proceeding.
3. Court-Appointed Professionals: In some Chapter 11 cases, the court may appoint professionals, such as bankruptcy examiners or trustees, to oversee specific aspects of the case. The fees for these professionals are typically paid from the bankruptcy estate’s assets.
4. U.S. Trustee Fees: The U.S. Trustee’s Office oversees Chapter 11 cases and charges quarterly fees based on the debtor’s disbursements. The fees are calculated on a sliding scale and can be substantial for larger cases.
5. Administrative Expenses: Chapter 11 cases often involve substantial administrative expenses, including legal, accounting, and consulting fees. These expenses can accumulate quickly and are typically paid from the bankruptcy estate.
6. Operating Expenses: If you continue to operate your business during Chapter 11, you’ll need to cover ongoing operational expenses, including payroll, rent, utilities, and other essential costs. These expenses are generally your responsibility unless the court approves otherwise.
7. Plan Confirmation Fees: To successfully emerge from Chapter 11, you’ll need to develop and gain court approval for a reorganization plan. The process of confirming the plan may involve additional legal and administrative costs.

Chapter 11 bankruptcy can be a powerful tool for businesses and individuals with significant financial issues, but it’s essential to be prepared for the substantial costs involved. Careful planning, budgeting, and working closely with experienced professionals, including bankruptcy attorneys and financial advisors, are critical to managing these expenses effectively.

Cost to File Chapter 13 Bankruptcy in New York, NY

The cost to file for Chapter 13 bankruptcy in New York, NY, involves several fees and expenses. Chapter 13 bankruptcy is often referred to as “reorganization” bankruptcy and allows individuals with regular income to create a repayment plan to address their debts over a specified period. Here’s a breakdown of the typical costs associated with filing for Chapter 13 bankruptcy:

1. Filing Fee: The primary fee for filing a Chapter 13 bankruptcy petition is the filing fee charged by the U.S. Bankruptcy Court. These fees are subject to change, so it’s essential to check the current fee schedule on the U.S. Courts website or consult with the court directly for the most up-to-date information.
2. Credit Counseling and Financial Management Courses: Similar to Chapter 7 bankruptcy, individuals filing for Chapter 13 bankruptcy are required to complete two mandatory courses: a credit counseling course before filing and a financial management course after filing. The costs for these courses can range from $60 to $135 each. Some agencies may offer reduced fees or fee waivers based on your income.
3. Attorney’s Fees: Many individuals seeking Chapter 13 bankruptcy hire an attorney to help them navigate the process, create a viable repayment plan, and represent their interests in court. Attorney fees for Chapter 13 bankruptcy can vary widely based on factors such as the complexity of your case, the attorney’s experience, and the specific services required. Typically, attorney fees for Chapter 13 cases range from $2,420 to $4,950 or more. It’s essential to discuss fees with your attorney and establish a clear fee agreement before proceeding.
4. Bankruptcy Trustee’s Fees: In a Chapter 13 bankruptcy, a trustee is appointed to administer the repayment plan and ensure that payments are made to creditors as agreed. The trustee is compensated through a percentage of the funds they distribute to creditors, which is included in your monthly repayment plan.
5. Miscellaneous Costs: There may be additional costs associated with your Chapter 13 bankruptcy, such as obtaining credit reports, mailing, photocopying, and notary fees. While these expenses are relatively small, they can add up over the course of your bankruptcy.

If you cannot afford to pay the filing fee upfront, you may be eligible for a fee waiver or installment plan. To obtain a waiver, you will need to submit a fee waiver application to the court, demonstrating that you meet specific income and expense criteria.

Before proceeding with a Chapter 13 bankruptcy filing in New York, NY, it’s advisable to consult with an experienced bankruptcy attorney who can provide guidance, help you assess your eligibility, and ensure that you understand all the associated costs and requirements based on the most up-to-date information.

Reliable Bankruptcy Attorneys in New York, NY

Below is a list of reputable bankruptcy attorneys in New York, NY. They can help you with both personal and business bankruptcy information.

Law Offices of William Waldner, PC
469 7th Ave #1225, New York, NY 10018, United States

Charles Juntikka & Associates, LLP
247 W 30th St #12, New York, NY 10001, United States

Starr & Starr, PLLC
260 Madison Ave, New York, NY 10016, United States

Shaev & Fleischman P.C.
228 Park Ave S #47620, New York, NY 10003, United States

The Law Offices of Robert M. Fox
630 3rd Ave, New York, NY 10017, United States

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