Before Bankruptcy – Bankruptcy Law in the State of New York
Your debts are too high and you cannot keep up with all the monthly payments. The calls from your creditors never stop. You feel overwhelmed and want this nightmare to end. Now is the right time to find out if you qualify for bankruptcy and, if you do, which chapter you should file for.
The best thing to do is to see a bankruptcy attorney. While the bankruptcy law does not require you to be represented by an attorney, it is a smart thing to do. You only have one shot at bankruptcy every eight years. If you don’t do it right the first time, your case will be dismissed and you will not be able to file for bankruptcy for the next eight years. For example, let’s say you filed for bankruptcy on June 1, 2012. If your case is dismissed, you won’t be able to file another bankruptcy petition until June 2, 2020. Moreover, even when you file for bankruptcy in 2020, you will not be able to get rid of the debts you could have listed on your petition in 2012 but didn’t. So please don’t make things more complicated than necessary. Just hire an attorney!
When you go to your first appointment with an attorney, she will ask you some questions about your financial situation. She will ask you about your income and property, the nature of your debts, the size of your household, your expenses, etc. The attorney will advise you on all the legal options you have. She will also advise you which of your debts debts will not be cancelled in bankruptcy. For example, with a very few exceptions, student loans, child support and most tax debts will survive bankruptcy.
If you choose to retain this attorney to represent you in your bankruptcy proceedings, you will sign a retainer agreement and she will send you home with a bunch of paperwork. You will have to make an inventory list of everything you own. Do you own any real estate? Do you own a car? Any jewelry of artworks? A farm? This list can go on. You will literally have to walk from one room to another in your house and list every piece of property that belongs to you. Then you will need to come up with the value of that piece of property. In addition, you will also prepare a list of all your expenses and debts.
During this time you will also need to complete a credit counseling course. The law requires that you do so no more than 180 days before you file your bankruptcy petition. Your attorney should give you a list of approved credit counseling agencies. These agencies charge a fee of about $50. You can take this course online or by phone in the privacy of your home, and once you are done, the agency will issue a certificate of completion and possibly a repayment plan. You will need to give both these documents to your attorney. Once you complete your “homework”, you have to send all the documents to your attorney.
As soon as your attorney receives your paperwork, she will prepare your bankruptcy petition as well as other forms required by the court. Your attorney will recommend whether your should claim state or federal exemptions. The choice of exemptions will depend on two factors: the value of your property and whether or not you own any real estate, Of course, you should choose the exemption system that will allow you to protect the most of your property.
You must decide which property you want to keep and which property you are ready to give up, if the trustee asks you to do so. You might also want to reaffirm some of your debts.
In addition to all the forms you prepare for a Chapter 7 bankruptcy, in a Chapter 13 bankruptcy you will need to propose a three- or five-year plan on how you are going to repay some of your debts in full and some portion of your other debts.
Before your attorney files your bankruptcy petition and all the required forms with the bankruptcy court, you will need to sign it. Use this opportunity to verify that all the information in the petition is correct. Don’t hesitate to ask your attorney any questions and let her know if there is any new information you would like to add and if your financial situation has changed.
Once you sign the bankruptcy petition, your attorney will file it with the court.