Step-by-Step Bankruptcy Filing Process in Brooklyn NY

Facing a mountain of debt and considering bankruptcy in Brooklyn, NY? You’re not alone. Many find the bankruptcy process overwhelming. This guide provides a step-by-step breakdown to help you understand your options and navigate your financial affairs. Whether you face credit card debt, medical bills, or other financial burdens, understanding the process offers clarity and relief.

Understanding Bankruptcy

Bankruptcy legally addresses unmanageable debt, offering individuals and businesses a fresh financial start. Chapter 7, often called liquidation bankruptcy, involves selling nonexempt assets to satisfy debts. Chapter 13, or reorganization bankruptcy, allows individuals to create a repayment plan.

Step-by-Step Bankruptcy Filing Process in Brooklyn NY

The bankruptcy process includes several key steps:

1. Initial Consultation with an Experienced Bankruptcy Attorney

First, consult an experienced bankruptcy attorney in Brooklyn NY. Discuss your financial situation, assets, debts, and current monthly income. They can analyze your case and bankruptcy exemptions to help determine the best course of action and chapter for your individual situation.

2. Credit Counseling

Before filing bankruptcy, complete a credit counseling course from an approved provider. Explore fee waivers if the cost is a concern. This course covers budgeting and alternative debt management strategies.

3. Gather Financial Documents

Gather your financial paperwork, including tax returns, pay stubs, bank statements, unexpired leases, and credit reports. Having organized financial documents streamlines the bankruptcy case filing process. Prepare your current monthly income details, monthly expenses breakdown, and property schedule for a smooth process.

4. Complete Bankruptcy Forms

Complete the required bankruptcy forms accurately and in detail. These include schedules of assets and liabilities, statement of financial affairs, and the means test form. The means test is a financial assessment that determines whether or not you qualify for Chapter 7 bankruptcy. 

5. Filing Your Bankruptcy Petition

File the completed forms and pay the filing fee at the U.S. Bankruptcy Court. In Brooklyn, cases are filed with the Eastern District of New York. Filers should check the local rules for additional requirements in bankruptcy courts, such as the Eastern District and the Southern District. Provide a valid email address to the court for essential notifications. Your bankruptcy lawyer can help you navigate the initial statement, petition preparer documentation, and property schedule related matters. This ensures smooth case filing.

The court now offers the Electronic Self Representation (eSR) system for online filing bankruptcy. However, certain conditions prevent using eSR, including emergency filings, non-individual filings, lacking a valid email address, and individuals filing without an attorney.

6. Meeting of Creditors (341 Meeting)

Attend the 341 Meeting of Creditors a few weeks after filing. You’ll receive notice of the meeting and trustee information by mail. Review sample 341 meeting questions beforehand to prepare.

7. Debtor Education Course

After filing bankruptcy, take a debtor education course on personal financial management. This should be completed within 60 days of filing your bankruptcy petition. Consider applying for a fee waiver if you’re below the poverty threshold.

8. Bankruptcy Discharge

After completing all requirements, the court grants a discharge, releasing you from certain debts included in your bankruptcy case. A skilled bankruptcy attorney guides clients toward successful bankruptcy case resolution and property schedule management.

Chapter 7 vs. Chapter 13: Choosing the Right Path

Choosing between Chapter 7 and Chapter 13 is crucial. Chapter 7 is generally faster, providing quicker debt relief. Chapter 13 allows you to keep assets you might lose under Chapter 7, but it takes longer and requires regular monthly income. Selecting an individual chapter requires considering many factors.

The best choice depends on factors like income, assets, and debt type. Discuss your options with an experienced bankruptcy lawyer to ensure you choose the correct chapter based on the details of your household income and property schedule.

Protecting Your Assets in a New York Bankruptcy

New York offers bankruptcy exemptions to protect some of your property. It sometimes allows filers to choose federal non-bankruptcy exemptions. Be sure to seek legal advice about your personal property and real property, especially within the days prior to your bankruptcy filing, to properly handle the required documentation, property schedule preparations, and the implications this will have on any eviction judgment that you may be involved with.

The Means Test: Determining Chapter 7 Eligibility

For Chapter 7, individuals with mostly consumer debts must pass a means test based on income and expenses. Those making above the median income in New York undergo a means test calculation to determine disposable income (income after expenses) available for debt repayment under a Chapter 13 repayment plan. The means test calculation and subsequent property schedule ensure individuals follow federal bankruptcy laws. The legal fees associated with filing bankruptcy may be overwhelming, however many lawyers are happy to have free consultation.

If your income exceeds New York’s median, it’s subjected to “means testing”. This disposable income amount impacts how much you’re obligated to repay during bankruptcy proceedings.

Getting Help with the Bankruptcy Process

Filing bankruptcy without an attorney (pro se) is possible, but a lawyer simplifies the process. Bankruptcy attorneys can navigate federal bankruptcy regulations. They can assist in gathering and filing all the needed financial documents for filing your bankruptcy. Bankruptcy attorneys also provide legal advice on handling property schedules, exemptions, and the impact of filing bankruptcy on any pending eviction judgments. Individuals filing bankruptcy should research initial statements and discuss them with their attorney to determine legal fees.

Life After Bankruptcy in Brooklyn

Filing bankruptcy impacts your credit report, potentially affecting your ability to obtain loans or credit accounts immediately. Discussing whether bankruptcy is the right option with a bankruptcy attorney during a free consultation is highly recommended. Understand that the bankruptcy code and related processes are complex. Engaging with bankruptcy attorneys early and exploring free consultations ensures proper handling of initial statements, petition preparer documents, and adherence to local rules for filing in specific districts. Additionally, having a valid email address enables communication with the bankruptcy trustee and bankruptcy courts for crucial notices related to your case and meeting of creditors.

Conclusion

Navigating the bankruptcy process in Brooklyn, NY may seem intimidating. However, with the right information and support, you can effectively navigate the system. From credit counseling and attending the 341 meeting to rebuilding your credit, bankruptcy offers a chance for financial wellness.

This guide to the bankruptcy filing process in Brooklyn, NY offers insights into declaring bankruptcy. As laws and procedures evolve, so will the specifics of filing bankruptcy in Brooklyn. Remember that an initial meeting with the bankruptcy trustee is crucial to review your bankruptcy petition, which covers aspects like current monthly income, property schedule, monthly expenses, and property exemptions.

Also, learn the income test guidelines as set out by the federal bankruptcy courts within federal judicial guidelines. Ensure your attorney handles all financial documents including schedules of assets and liabilities. Check the local rules and property schedules when you have questions about bankruptcy forms or the filing fees for filing bankruptcy with bankruptcy courts.

Schedule a free consultation with The Law Office of William Waldner today. Mr. Waldner has helped many Brooklyn residents file for bankruptcy and reclaim their lives. Being in debt can take a physical and emotional toll on a person, but bankruptcy is designed to help them start fresh. Learn more today.