Wednesday, March 2, 2011

Good News Regarding Bankruptcy Exemptions

Bankruptcy and good news often do not go hand in hand but I am glad to say they belong in same sentence this time. As of January 21, 2011, the bankruptcy exemptions in New York State have increased as follows:

Homestead Exemption: from $50,000 to $150,000 (in the following counties: Bronx, Queens, Kings, Richmond, New York, Nassau, Putnam, Rockland, Suffolk, and Westchester). In the counties of of Albany, Columbia, Dutchess, Orange, Saratoga and Ulster, the exemption went up to $125,000. For all other N.Y. State Counties the exemption is now $75,000.

Vehicle Exemption: from $2,400 to $4,000 (for one motor vehicle (in the case of a vehicle equipped for a disbled person the exemption if $10,000).

There are other beneficial changes to the New York State Bankruptcy Exemptions, however, this blog cannot list them all. I just wanted to give you the information on two of the most sought after exemptions and put a smile on your face.

Do I need a Lawyer?

As a lawyer, I would say yes, you need a lawyer and you would probably say that I am in the business of providing legal services therefore I wouldn't say anything else. Yes and no. Yes, I want you to do business with me, and no, you probably cannot handle your own filing. Prior to October 17, 2005, you probably would have been able to handle your own bankruptcy filing. After that date, things got a little more complicated.

Most bankruptcy attorneys will give you a free consultation. There are bar associations that will prepare your petition for free if you qualify financially; they restrict free services to those who need it most. You have to sign up for it and wait several months for your case to be filed.

There are some free online consultation services but I would caution you to be certain who you are dealing with before you give them any personal information.

Of course the possibility exists that you could handle your own bankruptcy filing with a "how to" book and your natural intelligence but you may need to try and try again.

The self-represented often run into difficulties when they fail to prepare all of the reqired documents, when they forget to answer all of the questions, and when they fail (or don't know that they have) to send documents to the Trustee. In such cases, their cases will experience delays or could be dismissed.

The Bankruptcy Court has a pro-se attorney to answer questions that you may have about filing your own bankruptcy. So, if you enjoy doing research, and have time on your hands, go ahead and try it.

Monday, July 19, 2010

The "Means Test," or Do You Earn Too Much for Chapter 7?

Do you earn too much for Chapter 7?

If your household income is below the median State income,
the Means Test does not apply to our case. You can file your
petition for bankruptcy under Chapter 7, which means most of your
debt will be discharged (except for student loans, child support, etc.,
which are non dischargeable).

You may think that your financial situation leaves you
no choice but to declare bankruptcy, however, if your income
during the six months prior to filing your petition is above the median
household income for the state where you live you may not qualify to
file under Chapter 7. Instead, you may have to consider filing a
bankruptcy petition under Chapter 13. To simplify the issues, if you
qualify for Chapter 7, you can discharge most of your debts; and if you
file a Chapter 13 petition, you are basically “reorganizing” your debt
(like large corporations do when they file under Chapter 11), and you
will have to enter into a Plan to repay part of your debt.

So, qualifying for Chapter 7 of the Bankruptcy Code is very
important to you. At this time, for a household of one the Median
household Income in New York State is $46,320/year. For a
household of two, it is $57,902; for households of 3 or 4 persons it
is respectively $67,174 and $82,164. For households in excess of
4 persons another $7,500 per person are added. The income of all the
persons living in the household who contribute to the household
expenses is considered (even though they are not filing for bankruptcy).

However, if your household income exceeds the median do not
despair yet. Consult a bankruptcy attorney who can analyze your income
and expenses and hopefully help you pass the test. The Means Test
was implemented to curb abuse of the system. If you earn more than the
Median State income and you do not pass the test, you can still file under
Chapter 13 and repay part of your debt.

Monday, June 21, 2010

Educational Courses Requirement

If you are thinking of filing a petition for bankruptcy under Chapter 7 of the Bankruptcy Law, you will be required to take two educational courses. One course is taken PRIOR to the filing of the bankruptcy petition, and the second AFTER the petition is filed.

The first course is about budgeting and learning how much income you have coming in, what monthly expenses you have, and how much you owe. The second course is more about how to maintain your credit, how credit card companies operate their business and how it affects your account(s). You will not receive a discharge in bankruptcy if you took the first course but failed to take the second. If your case is dismissed for failure to take the second course, you would have to make a motion to re-open the case and pay fees to the court.

The courses can be taken online or by telephone. Their cost depends on whether you are doing them online or over the telephone. By telephone they cost a little more. These courses are useful, you can learn a lot about maintaining good credit from taking them. After you take each course, a Certificate of Completion is issued by the school offering it and these certificates have to be filed with the court.

Some debtors are unable to take these courses due to some incapacity, or because counseling is not available in their ares of residence.

Friday, May 14, 2010

Deciding Whether to Seek Bankruptcy Protection

Welcome to my Blogsite!

Many people ask me whether they should try to avoid bankruptcy
at all costs. "But of course," I tell them, "if you have money to pay
your creditors you should pay them. After all, you promised to do
that when you asked for credit."

When you are in dire financial circumstances you cannot ask
yourself whether you should avoid bankruptcy at all costs. Instead,
you should ask yourself: "Based on my financial resources what
choices do I have?" That is a question you can work with in order to
determine whether you should file for bankruptcy.

The first thing you have to do when you are in financial difficulties
is to know your circumstances. Sit down at the kitchen table and
make a list of all your monthly expenses; rent, utilities, food,
transportation, etc., after you have accounted for all of your monthly
expenses, add them up and look at the total: do your expenses
exceed your income? Is your situation likely to change for the
better any time soon?

If you are uncertain, maybe you should consult a financial planner
or a bankruptcy attorney. Sometimes we need someone to help us
clarify an issue.

Friday, April 23, 2010

Thnking About Filing for Bakruptcy

Welcome to my Blogsite!

If you are reading this blog, you are probably exploring ways to improve your financial situation. Many people today have lost one of their jobs, or the one job they had. Others have seen their full time jobs reduced to part time employment. Some have experienced health problems and, not having health insurance coverage, they have spent their savings on medical treatment. There are many different ways someone can experience financial distress.

Misery loves company, they say. But it is hard to find consolation in being one among many who are unable to pay their debts and are having trouble covering their basic necessities. Like most people, you want to make your payments on time, and you do not want to deal with collection agencies on the phone.

If you are in a dire financial situation, you could probably find relief by filing a petition for bankruptcy. Individual consumers often seek protection under Chapter 7 of the Bankruptcy Law. To qualify under Chapter 7, your income must be insufficient to pay for your monthly expenses. There are many other issues that require consideration and the particular circumstances of your case will determine whether or not bankruptcy is the answer to your problem.