Many people who file for bankruptcy in New York have fears about other people getting to know that they have file for bankruptcy. They hide this fact from friends and members of their family. This is because the perception here among some people is that it is shameful to file for bankruptcy though I have had to explain over and over that there is nothing shameful about filing for bankruptcy. Others get so scared that their employers would find out that they filed for bankruptcy. They get afraid that their employers might fire them from their jobs if they ever get to know. They try as much as possible to hide their filing for bankruptcy because of this sense of insecurity.
Here is news for you. Federal law prohibits your employer from discriminating against you or from terminating your employment solely because you filed for bankruptcy. The reality now is that a great number of people in New York City and possibly someone near you in the Bronx, Queens, Brooklyn and Manhattan have filed or are filing for bankruptcy. Businesses cannot help it but have a good percentage of that number in their companies. It’s a reality that everyone is facing and so companies would rather not do anything that would appear to be discriminating against their employees.
Besides, you’ve got the law on your side. Your employers would rather have you working than you suing them for huge sums for discrimination.
Congress enacted the Fair Debt Collection Practices Act to stop abusive debt collection practices. One way to stop this abuse by debt collectors is the requirement of a validation notice and period in collecting debts.
If the debt collection agency does not follow this requirement, you can let your New York lawyer seek an order from the court to get the debt discharged and even get damages against the debt collection agency.
Under the Fair Debt Collection Practices Act, all debt collectors are to send a written notice to the debtor setting forth the debtor’s right to dispute the debt, among other things. This notice must be sent within 5 days of the debt collector’s initial communication with the debtor. This is called the ‘validation notice’.
The debtor then has 30 days from the time of receiving the validation notice to send the debt collector a notice disputing the debt. This period is known as the validation period.The debt collector is free to go on with her debt collection activity during the validation period if the debtor fails to dispute the debt.
However, the debt collection agency must not do anything that might overshadow or be inconsistent with the debtor’s right to dispute the debt or request the name or address of the original creditor. For example, in NY, it is wrong for the debt collection agency to serve a debtor with a summons and a complaint within the 30-day validation period without accompanying communication assuring the debtor that her rights under the validation period remain in force and are not affected by the service of the lawsuit. The courts have this requirement because most Bronx, Queens, Brooklyn, Manhattan and other NY state residents might get confused and understand the service of the lawsuit as a termination of their rights during the validation period.
To prevent such confusion, the best practice is to provide an explanation in both the validation notice and the summons and complaint clarifying the rights of the debtor and explaining that the starting a lawsuit does not override the debtors rights.
Filing for bankruptcy is not an indication that you are lazy, greedy or morally not upright. This is because a lot of bankruptcies are brought about by medical conditions, divorces and unemployment. Filing for bankruptcy involves a very special decision. Whether you decide to file or not to file for bankruptcy, these are some of the things that you should know.
You should list all the debts that you owe and also remember to list the name of every person that you owe. This list includes people that you believe you do not owe but who think you owe them. This is because the disputed debt may turn out to be an actual debt in fact. If you fail to list a debt, that debt may not be discharged.
You should also never hide properties. You must always give a full disclosure of all your property and financial assets. Trying to hide your property and other assets might get you into trouble. This is because there are a lot of ways in which creditors can find out what you own and what you do not own. Your bank statements, credit card statements, tax returns, insurance policies and even data from your computer can expose you.
Remember that all bankruptcy filings are done under the penalty of perjury. This means that you swear to tell the whole truth concerning your bankruptcy and you should therefore be punished if you fail to tell the truth or the whole truth.
Your best approach in filing for bankruptcy is to truthfully declare all of your assets. Remember, the first and best step to filing for bankruptcy is to see a bankruptcy attorney to explain all your options under the law to you.
Not all debts can be discharged in a bankruptcy proceeding. If you owe taxes, those taxes cannot be discharged in a bankruptcy proceeding. Similarly, if the IRS has a lien on your property because of taxes that you owe to the IRS, those liens cannot be discharged via bankruptcy. Another type of debt that is not discharged through bankruptcy is student loans and other government loans.
Filing for bankruptcy will not discharge you from fulfilling your obligations under a court declared child support or child maintenance order or alimony payments. If there is a court order against you to pay certain individuals or businesses some amount owed, those amounts will not be discharged through bankruptcy. That is one reason why you should speak to your bankruptcy attorney before your debtors file their claims against you in court. Once those claims are filed before you file for bankruptcy, you cannot discharge any amount that the court will order you to pay to your creditors through a bankruptcy proceeding.
Debts incurred through a court order to pay damages for willful and malicious injury and judgments in wrongful death or personal injury cases arising from your intoxication will not be discharged via bankruptcy. Debts incurred through fraud cannot also be discharged in a bankruptcy proceeding. You cannot clear these non-dischargeable debts with your credit card and later file for bankruptcy. The bankruptcy court will find out and you may end up in trouble. Just speak to your bankruptcy attorney as soon as you are behind on your payments and you feel you cannot keep up with the payments. We recommend using a professional and experienced NYC bankruptcy attorney at the first sign of debt trouble.
Getting organized – it can seem like a Herculean task during this tumultuous time in your life. But by taking the time to organize your documents ahead of time, you’ll not only be better prepared when meeting with your Bronx bankruptcy lawyer, you’ll also make the entire procedure flow much more smoothly.
If you’ve completed your required pre-filing credit counseling and are ready to proceed with filing, these are some of the basic documents you’ll need. (Make sure to consult with your Bronx bankruptcy lawyer about your particular situation and any other documents you’ll need.):
Tax Returns and W-2 Statement of Income – You’ll be required to furnish your tax returns for at least the past two years.
Real Estate Documents – If you own a home or other real property, you’ll need to furnish your Bronx bankruptcy lawyer with copies of the required documents to submit to the bankruptcy court. These documents include the deed, the mortgage note, the latest appraisal, and your latest property tax bill. This is required not only for your primary residence, but for ALL property that you own or hold title on.
Pay Stubs – You’ll need to furnish pay stubs for the past 60 days, or if you are unemployed, then an affidavit stating such. If you’re self-employed, please consult with your Bronx bankruptcy lawyer about requirements to verify your income.
Statement of monthly net income, and any anticipated increases such as an upcoming negotiated pay raise (also, any anticipated increase in expenses)
Titles to Vehicles – You will need to furnish the court with copies of the titles to all vehicles you own.
Certificate of Completed Credit Counseling – Once you’ve completed the mandatory pre-filing credit counseling, make sure to provide a copy of the Certificate of Completion to your Bronx bankruptcy lawyer.
These are just some of the documents that you will be asked to produce during your bankruptcy procedure. By taking the time to organize your documents, you’ll have one less thing to worry about as you wind your way through the process towards regaining your financial footing.
A “cramdown” is jargon used by lenders and bankruptcy lawyers in NYC. It effectively imposes a court-ordered reduction of the balance of a loan for an outstanding asset – oftentimes a car, boat or motor home. And while this type of forced loan modification exists for non-real assets, it historically has excluded real property.
During Spring 2009, legislators fought to pass a bill under the umbrella of the Helping Families Save Their Homes Act that would make real property eligible for cramdown modifications – a bold move whose intent was to help stop the glut of foreclosures burdening homeowners throughout America.
Bankruptcy lawyers in NYC followed that cramdown legislation for homes with keen interest, as the proposed legislation wound its way through Congress. Ultimately, it failed in the Senate in a 45-51 vote in April 2009. At the time, most pundits and observers felt that the defeat in the Senate would be the final nail in the coffin for this much-sought-after relief championed by bankruptcy lawyers in NYC and beyond.
Now, however, cramdowns for real property may be on the comeback trail. Initially dismissive of potential attempts to revive the bill in May, House Financial Services Committee Chairman Barney Frank (D-Mass) told reporters recently that he intends to try to revive the bill, possibly as soon as October.
This is a move hailed by both homeowners and bankruptcy lawyers throughout NYC, as it gives new hope to those at the heart of America’s financial crisis. While big-name banks continue to receive bailouts at taxpayer expense, they have been wont to share the government’s largesse by sincerely working with those homeowners who, month after month, struggle to meet their mortgage obligations.
Supporters of cramdown legislation cite the continued flood of foreclosures on the real estate market, and feel that cramdowns would help stabilize the real estate industry by finding the financial floor in housing prices. Bankruptcy lawyers in NYC also support the measure, because court-ordered modifications could help millions of borrowers who are burdened with mortgage debt be able to keep their homes.
Stay tuned, as this financial Capitol Hill smackdown – “Lenders vs. Homeowners” unfolds. Bankruptcy lawyers in NYC and across the nation now wait to see if special interests will yet again prevail, or if this time struggling homeowners can actually get some much-needed relief.
While bankruptcy is often a last resort for those who struggle to meet their monthly obligations, deciding to file bankruptcy in NYC can also be the best course of action for those who’ve come to the end of their financial rope.
Whether you’re struggling because of a job loss, a reduction in work hours, unexpected medical bills, or a lifestyle change such as a divorce, bankruptcy offers you the opportunity to legally pursue the chance for a fresh start.
But it’s not a process to be entered into lightly. Before you file bankruptcy in NYC, it’s important to consult with an experienced attorney who is an expert in the field. Your attorney will review your personal situation, and assess your financial picture to see where you’re eligible to file bankruptcy in NYC, and if it’s the best course of action for you.
What are some things to consider before you file? First you need to decide whether you have the means to fulfill your obligations. It can be hard to discern this alone, as you are so close to your own situation that it’s difficult to look at it with an unbiased eye. That’s why it’s always a good idea to consult with an expert attorney before you opt to file bankruptcy in NYC.
In order to make an accurate assessment, you’ll need to gather all of your financial documents, including outstanding loans, monthly bills and obligations, as well as paystubs and other documents that detail your monthly income. As you discuss your options to file bankruptcy in NYC with your attorney, you’ll get a much better idea of where you stand financially, and if bankruptcy is the right course of action for you. And many attorneys offer potential clients a complimentary consultation to discuss the law as it pertains to your unique situation.
As with any big decision in life, the decision to file bankruptcy in NYC should not be made lightly. After exploring options such as credit counseling, debt consolidation, and selling off assets, bankruptcy may be your only alternative. Only by researching your options and consulting with a professional will you be able to make an informed decision on whether you need to file bankruptcy in NYC, or if there are indeed other, less drastic alternatives.
Most people are responsible and turn to bankruptcy only as a last resort. As a result, most lay people enter the world of bankruptcy anxious and fearful about the process. They also usually have questions … lots of questions, so here are some answers to some of the more frequently asked questions.
NOTE: While these FAQ’s are just a guideline, it’s important to consult with an experienced Chapter 7 lawyer about the particulars of your case so you can obtain the best legal counsel for your situation.
What is bankruptcy?
Bankruptcy is a legal process for people who cannot pay their bills. It can reduce (and in some instances completely eliminate) the amount of debt owed.
There are several different types of bankruptcy filings under the federal bankruptcy code. Chapter 7 is intended for those with few if any assets (in most instances, your income must be equal to or below the median state average income.) Chapter 7 is also known as Liquidation Bankruptcy, and a reputable Chapter 7 lawyer can help you assess whether you qualify for this option.
Will Chapter 7 eliminate all of my debts?
While Chapter 7 can eliminate most debts, certain ones are not subject to discharge. These include tax debts, child support and/or alimony, student loans, and some fines and criminal/civil judgments. Again, an experienced Chapter 7 lawyer can help decipher if a debt in question will qualify for discharge.
Will I be able to keep my personal property under Chapter 7?
Chapter 7 bankruptcy categorizes property as either exempt or non-exempt. In most cases, property declared to be exempt is protected from creditors (unless it has been pledged as collateral towards the debt.) Examples of usually-exempt property include your primary residence and part of its equity, your primary vehicle, retirement accounts, and any tools or equipment you use to earn a living. For a more comprehensive overview on what property is protected and what is considered non-exempt, contact a professional Chapter 7 lawyer.
For a glossary of terms please see our comprehensive Bankruptcy Glossary page.
If you’re contemplating filing bankruptcy in NYC, it’s important to take the time to educate yourself as thoroughly as possible before you actually start the process. Not only will this help you make informed decisions along the way, but it also ensures you’ll fully understand the ramifications of events as they unfold.
Some of the key steps to filing bankruptcy in NYC are set forth below, but as with any legal matter, always seek competent legal advice from a NYC bankruptcy lawyer before proceeding.
Mandatory Credit Counseling – 180 Days Before Filing
Many people mistakenly believe that the first step in filing bankruptcy in NYC is to file the actual petition. But the new bankruptcy laws enacted in 2005 now dictate that people intent on filing bankruptcy in NYC undergo credit counseling through a government-approved program before actually filing the petition.
Establish/Verify Residency
In order for you to qualify for filing bankruptcy in NYC, you must have been a resident of the state of New York for at least 90 days prior to filing. If you’ve lived in New York less than 90 days, you have to either wait until you meet the 90-day requirement, or else file in your previous state of residence.
File the Petition for Bankruptcy
Your case officially starts once your attorney files the petition with the court. At that time, a trustee will be appointed to those filing for bankruptcy in NYC. The trustee will oversee your case throughout its entirety, whether it be a few months for Chapter 7, or up to five years for Chapter 13.
Meeting with Your Creditors
In order to comply with the terms of federal bankruptcy law regarding filing for bankruptcy in NYC, your creditors will be given a chance to meet with you to review the debt you owe. This happens at what is a referred to as a 341 Meeting, or a Meeting of Creditors. This is often the most intimidating part of the process for most people, but be assured the meeting is usually short, and your attorney will prepare you for it ahead of time.
Mandatory Financial Education
Pursuant to the new bankruptcy laws in 2005, those who engage in filing bankruptcy in NYC must undergo mandatory financial education in order to prepare them to improve their fiscal decisions and habits.
Discharge of Debts
If there are no objections from your creditors as to the truthfulness of your bankruptcy petition, and you faithfully fulfill the terms of the bankruptcy process, your debts will be discharged and your case will conclude.
This is just a brief overview of the process for filing bankruptcy in NYC. Because bankruptcy entails many life-altering consequences, it’s imperative that you seek legal counsel from a reputable bankruptcy attorney in NYC.
