Steps in Filing for Bankruptcy in Yonkers NY: A Comprehensive Guide

Facing financial hardship can be overwhelming, but understanding the steps in filing for bankruptcy in Yonkers, NY, can provide a path forward. Many residents find themselves considering this option due to unexpected medical bills, job loss, or other financial setbacks. The process, while intricate, offers a structured approach to regaining financial stability.

Understanding Bankruptcy Options in Yonkers

When considering bankruptcy, it’s important to know the different types available. The two most common forms for individuals are Chapter 7 and Chapter 13. Each offers a different approach to handling debt.

Chapter 7 Bankruptcy: Liquidation

Chapter 7 bankruptcy, often called “liquidation bankruptcy,” is typically the quickest option. In this type of bankruptcy, your nonexempt property might be sold to pay off unsecured creditors. However, many find that most or all of their assets are exempt under New York bankruptcy exemptions.

Chapter 13 Bankruptcy: Reorganization

Chapter 13, on the other hand, is a reorganization of debts. This option allows you to keep your assets while creating a payment plan, typically lasting 3-5 years. It’s often chosen by those with regular income wanting to catch up on mortgage or car payments, or those with secured debt they’re looking to manage through a repayment plan.

Steps in Filing for Bankruptcy in Yonkers NY

Here’s a breakdown of the specific steps in filing for bankruptcy:

1. Credit Counseling

Before filing, you must complete a credit counseling course from an approved provider. This requirement stems from the 2005 Bankruptcy Act. The course helps you understand your finances and explore alternatives to a bankruptcy case.

2. Means Test

Next is the means test. This test compares your income to the median income in New York. If your income is below the median, you may qualify for Chapter 7; if it’s above, Chapter 13 might be necessary. A bankruptcy lawyer will use your current income to assess eligibility.

3. Gather Financial Documents

You’ll need to collect all your financial documents. This is a crucial step for a complete bankruptcy petition.

• Income statements are essential.
• Tax returns for the past two years are required.
• A list of all debts, including credit card debt and medical bills.
• A list of all assets, including real estate.
• Monthly living expenses, categorized, must be reported.

4. File the Petition

With documents in order, file your bankruptcy petition with the U.S. Bankruptcy Court. For Yonkers residents, this means filing with the Southern District of New York, specifically the York District Bankruptcy Court. A bankruptcy attorney can make sure you meet all the chapter requirements. The court is located at 300 Quarropas Street, White Plains, NY.

5. Automatic Stay

Upon filing, an automatic stay goes into effect. This halts most creditor collection efforts immediately, offering instant relief. This can also help with foreclosure defense by temporarily halting proceedings.

6. Meeting of Creditors

About a month after filing, attend a 341 meeting, or the meeting of creditors. You’ll meet with the bankruptcy trustee, who will ask questions about your finances under oath. Be honest with your answers, so the trustee can know where you stand on paying any unsecured debts. They can see if there’s any money left after selling your assets.

7. Financial Management Course

After filing, complete a financial management course. This is required to receive a discharge of debts. It aims to equip you with better financial skills for the future and is part of many standard bankruptcy filings.

8. Confirmation of Chapter 13 Plan (If Applicable)

If you have filed a proposed plan under Chapter 13, it needs to be confirmed and found feasible. After all, is your income and other circumstances such that you can meet your payment obligations?

9. Discharge of Debts

In a Chapter 7 bankruptcy case, this typically happens within four to six months after the bankruptcy filing date. With Chapter 13 cases, it occurs after you complete the proposed plan payments.

Bankruptcy Court in the Southern District of New York

The United States Bankruptcy Court, Southern District of New York, has multiple locations serving various counties. Below is information on the relevant locations and divisions.

Special Considerations for Yonkers Residents

While the steps are similar statewide, local factors matter:

Local Legal Resources

Yonkers residents can access local legal aid for bankruptcy law guidance. Legal Services NYC offers support. It’s a nonprofit organization that provides civil legal assistance to low-income people in New York.

Law firms in Westchester County also often offer free consultations. You can request your free consultation with The Law Office of William Waldner here. Mr. Waldner keeps his costs down by handling every aspect of every case. 

Property Exemptions

New York law has bankruptcy exemptions, allowing you to keep assets, especially in Chapter 7. The homestead exemption can be up to $170,825 for homes in Westchester County, which includes Yonkers. The chief judge may determine exact figures based on regional standards.

Local Economic Factors

Yonkers’ economic landscape, with growth and high housing costs, can impact bankruptcy filings. These may influence the need and type of bankruptcy, whether dealing with student loans or overwhelming credit card debt. Any major financial or routine financial transactions can also be affected.

Potential Impacts of Bankruptcy

While understanding the process is essential, consider the potential impacts, both positive and negative:

Credit Score

Bankruptcy significantly impacts your credit score. A Chapter 7 remains on your report for 10 years; Chapter 13 for 7. This will temporarily reduce your credit, so future lenders may not trust your ability to pay as much. It may be in your best interest to build your credit back up after you file bankruptcy.

Future Financial Opportunities

Bankruptcy can make obtaining credit, renting, or certain jobs harder. However, many rebuild credit over time with careful financial management. Good choices are key to moving on successfully after bankruptcy.

Emotional Impact

Filing can be emotionally challenging. However, bankruptcy is a legal tool to help people get a fresh start. Your first bankruptcy case filing can feel difficult, but will make you want to do things differently next time.

Alternatives to Bankruptcy

Before taking the steps to file bankruptcy, explore these alternatives:

Debt Consolidation

This involves a new loan to pay multiple debts, possibly at a lower interest rate. Consider debt consolidation when you are not facing excessive debt, but would still like to be in a better position with payments. A lower payment may give you some breathing room each month, too.

Debt Settlement

Negotiate with creditors to settle debts for less than owed. When attempting debt settlement, make sure you deal with the creditor in writing. They may also give you a discount on your debts if you pay a lump sum right away, but make sure that this lump sum isn’t difficult for you to pay.

Credit Counseling

A counselor can help create a budget and negotiate with creditors. This might involve setting up payment arrangements for credit card or student loan debts. Be honest with the credit counselor and don’t be afraid to be transparent about your spending.

Frequently Asked Questions (FAQ)

Can filing for bankruptcy stop a foreclosure?

Yes, filing for bankruptcy triggers an automatic stay, which temporarily halts foreclosure proceedings. It gives homeowners time to explore options. Consulting with a legal expert for foreclosure defense is recommended to understand all of your available options.

Can bankruptcy discharge all my debts?

Bankruptcy can discharge many debts, but not all. Student loans, certain taxes, and child support are generally not dischargeable. This can vary on several factors.

Where is the meeting of creditors held?

The meeting of creditors may be held at different locations. Sometimes, you have a meeting at One Hudson Valley, Plaza East Suite 214, Wappingers Falls, NY. If you live near Central Islip, the meeting might be at 560 Federal Plaza Central Islip. The actual Cadman Plaza, East Suite will vary, and bankruptcy noticing procedures inform you of specifics, often through electronic bankruptcy noticing.

Conclusion

The steps in filing for bankruptcy in Yonkers, NY, involve several important legal and financial considerations. It can be less stressful if you are fully prepared and knowledgeable about the process. Bankruptcy is a chance for a fresh start, and the beginning of rebuilding a strong financial foundation.

If considering bankruptcy, contact The Law Office of William Waldner. We can provide personalized legal advice, assess your specific situation, and explain your best options, like forming a workable proposed repayment plan. This can involve using York bankruptcy exemptions, making good use of York district laws. We look forward to speaking with you!