An income over $60,000 per year is in excess of the median income in New York, for a family size of one, thus, under New York Bankruptcy Law, the means test will apply. This is to ensure the Chapter 7 filing is not abusive. However, based on IRS standards for housing and utilities in Manhattan ($2936 per month for housing and $611 for utilities), there should be no difficultly in passing the means test, as it also includes expenses allocated for transportation ($302), personal living expenses ($691 per month food, clothing etc) and a variety of “other necessary expenses” (such as internet, medical/dental and taxes). It should be noted that even where the debtor actually spends less than the IRS standards, the debtor has been entitled to use the IRS standards, excepting the other necessary expenses category. New York Bankruptcy Law states actual expenses must be used.

(Courtesy of Association of the Bar of the City of New York)

No, under New York Bankruptcy Law a spouse liable to child-support payments does not relinquish this liability by filing for bankruptcy.

(Courtesy of Association of the Bar of the City of New York)

If the fair market value of the apartment, after deducting any mortgages, is less than $50,000 singly, or $100,000 for a married couple filing jointly, the apartment would be exempt under the new bankruptcy laws in New York.

(Courtesy of Association of the Bar of the City of New York)

No, everyone still has the right to file for bankruptcy under New York Bankruptcy Law and receive a fresh start. Most people will still be able to qualify for chapter 7 under the new bankruptcy laws. If a filer earns more than the NY State median household income, they may be required to repay part of their debt under a chapter 13 bankruptcy plan.

(Courtesy of Association of the Bar of the City of New York)

No, the new bankruptcy laws do not greatly affect the amount of people able to file for bankruptcy under New York Bankruptcy Law. The new bankruptcy laws make it more difficult to file a liquidating bankruptcy under Chapter 7 but if a filer does not qualify for Chapter 7, they may still qualify for Chapter 13 bankruptcy. However, it is estimated that up to 85% of those filing for bankruptcy under the old laws governing Chapter 7 would still be able to file for Chapter 7 bankruptcy under the new bankruptcy laws. The process has been made more complicated under the new bankruptcy laws because additional forms must be completed by lawyers and clients. This increases the time taken to complete the filing process and thus increases the cost to file, but in most instances, the new bankruptcy laws will not change a person’s ability to obtain a bankruptcy discharge in New York.

(Courtesy of Association of the Bar of the City of New York)

Not necessarily. The effect a bankruptcy has on one’s credit is greatly dependent on the filer’s ability to pay their bills both prior to filing for bankruptcy and after bankruptcy procedures have been completed. Therefore, bankruptcy may have little to no net affect on a filer’s credit rating. However, a bankruptcy will remain on a credit report for 10 years. It is also important to bear in mind that debtor’s often receive credit card solicitations in the mail following filing for bankruptcy. Creditors recognize that the debtor will not be able to file another bankruptcy, in most instances under New York Bankruptcy Law, for up to 8 years, and the debtor’s past debts are about to be wiped clean. Many creditors would rather loan money to someone free from debt without the luxury to file for bankruptcy again for some time, than to someone is in debt and able to file for bankruptcy tomorrow. In most circumstances, after a year of prompt payment of their bills following a bankruptcy discharge, one may apply for a mortgage to buy a home and be approved. It is important to note that it is probable the rate of interest and related closing costs generally will be higher for someone who filed for bankruptcy in the last 10 years, than for someone who has not.

(Courtesy of Association of the Bar of the City of New York)

That is not necessarily the case. In fact, under New York Bankruptcy Law, a chapter 13 bankruptcy filing is often utilized as a strategy to prevent foreclosure. Last August the new bankruptcy laws amending New York Bankruptcy Law increased the homestead exemption to $50,000 per person ($100,000 for husband and wife/ joint filers). This means that anyone who owns real estate, including a co-op or condo, if it is the filer’s primary residence, can keep up to $50,000 of that home’s equity exclusive of the balance due the mortgage bank. Thus, if the filer maintains their mortgage and tax payments, in most instances under New York Bankruptcy Law, one can file for bankruptcy and keep the home.

(Courtesy of Association of the Bar of the City of New York)