Bankruptcy in New York is a legal process through which some of the debts of an individual or a business are absolved (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult procedure. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good New York bankruptcy lawyer can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your distinct case.
Types of Bankruptcy in New York
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in New York will be the same as everywhere else in the United States. There are 2 basic forms of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy normally used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
In New York, Chapter 7 bankruptcy is referred to as "liquidation." The court will conduct an accounting of all of the debtor's assets, and determine which ones should be sold to help pay off the debts. Many classes of property, such as homes and cars, are exempt from this requirement, and therefore don't have to be sold. Once all of the eligible property is sold off, and the proceeds given to the creditors, the rest of the debt is excused. Under Chapter 13 bankruptcy, debt is normally not excused; instead, it is reorganized. The court will craft a long-term payment plan that allows the debtor to pay off his or her debts in single payments, over time. This usually gives the debtor some breathing room that would not exist if all of his or her debts became due and payable at once.
Normally, Chapter 11 bankruptcy is used by businesses as opposed to individuals. Much like Chapter 13, Chapter 11 involves the reorganization, as opposed to discharge, of a debtor's obligations. However, it is up the to the debtor to come up with a repayment plan, and once this happens, the plan is submitted to the participating creditors, who must approve it by majority vote.
How Can a New York Bankruptcy Lawyer Help?
Filing for bankruptcy is a major decision. While it can be beneficial, it's virtually guaranteed that there will be some negative consequences, such as damage to one's credit. Of course, with the advice of a New York bankruptcy lawyer, it's possible that you will find the benefits to outweigh the costs, but only a bankruptcy lawyer can help you make that decision.
Interesting Facts About New York
New York is situated in the Northeastern region of the U.S. Nicknamed "The Empire State", New York was historically considered the "gateway" into the United States. New York life captures much of the classic American dream, as the state is often equated with opportunity and success. New York has the third highest population of all U.S. states.
New York's court system is officially named The New York State Unified Court Systems. For some people, navigating New York's court system can be challenging- New York uses different terminology in naming their courts as compared to other states. For example, New York's trial courts are called "Supreme Courts" instead of Superior Courts. Also, the highest court is the Court of Appeals, whereas in other states the highest court is usually named the Supreme Court of the State.
In addition, New York maintains a number of "problem-solving" courts. These offer additional measures for cases involving drugs, mental health issues, and repeat offenses. Such programs reflect New York's role as an innovator in the fields of jurisprudence and lawmaking. New York has produced a number of U.S. Supreme Court Justices, including Benjamin N. Cardozo, Sonia Sotomayor, Ruth Bader Ginsburg, Antonin Scalia, and Chief Justice John Roberts.
New York's body of laws is one of the most complex in the U.S. Thus, lawyers in New York state are required to pass one of the most difficult bar exams in the country. New York lawyers offer legal expertise in all kinds of legal topics.