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Since bankruptcy is federal - the federal bankruptcy laws apply.
There are 2 options for a debtor - Chapter 7 and Chapter 13.
In a Chapter 7 filing, some of your property might be seized to satisfy creditors, but many possessions are exempt. Your home in New YorkState can't be seized so long as your equity does not exceed $50,000 if you're single or $100,000 if you're married and both you and your spouse own it.
Chapter 13, known as the wage earner's bankruptcy, is designed for people able to repay their debts over time (3 to 5 years). It's an option for those who want to keep property that a debtor is behind on paying that might be seized by creditors in a Chapter 7 filing (ie home or car, etc.).
A Chapter 13 bankruptcy filing
takes much longer than a Chapter 7 filing — up to five years — and involves periodic repayment of at least some of your debts. You need a steady source of income to file a Chapter 13 bankruptcy.
There is a bankruptcy "means test".
The means test is a formula devised to restrict bankruptcy petitioners with higher incomes from wiping out their debt entirely under Chapter 7 when they could be repaying a portion of their debts under Chapter 13. However, this does not necessarily mean consumers have to be flat broke in order to qualify for Chapter 7 bankruptcy relief, and only debtors with mostly consumer debts, not business debts, are required to take the means test.
A debtor who is below the median income, which is currently $47,790 for a household size of 1 in New York State, does not need to take the means test. A debtor who is married or has kids will have a larger household and the median income threshold is higher. For example, currently in New York State the median income for a family of 2 is just over $59,000. So a single parent whose income is below $59,000 will not be required to take the means test.
Current monthly income is defined to be the average income over the last six months before filing for bankruptcy. If a debtor is above the median income deductions can be used to pass the means test.
Here is a link for you to determine:
The filing for bankruptcy is certainly an alternative - a bankruptcy stays on your credit report for 10 years.However, a money judgment obtained in the State of New York stays on your credit report is generally enforceable for a period of twenty (20) years. (Chptr. 8, Art. 2, Sec. 211, New York State Consolidated Laws.)
So, although bankruptcy stays on your credit report for a long time - a judgment stays on even longer.
A judgment in NY may be enforced against any property which could be assigned or transferred, whether it consists of a present or future right or interest and whether or not it is vested, unless it is exempt from application to the satisfaction of the judgment. A money judgment entered upon a joint liability of two or more persons may be enforced against individual property of those persons summoned and joint property of such persons with any other persons against whom the judgment is entered. (Chptr. 8, Art 52, Sec. 5201, New York State Consolidated Laws.) In general, ninety per cent (90%) of the earnings of the judgment debtor for his personal services rendered within sixty days before, and at any time after, an income execution is delivered to the sheriff, is exempt from execution of a money judgment. (Chptr. 8 Art. 52, Sec. 5205(d), New York State Consolidated Laws.)
A money judgment generally may become a lien against the real property of a judgment debtor either from the time of the docketing of the judgment with the clerk of the county in which the property is located until ten years after filing of the judgment-roll, or from the time of the filing with such clerk of a notice of levy pursuant to an execution until the execution is returned. (Chptr. 8 Art. 52, Sec. 5203, New York State Consolidated Laws.)
So, what I would recommend is that you look in the local Yellow Pages or contact the County Bar Association for an attorney who can assist you filing a bankruptcy.
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