There are many contributing factors that are associated with financial hardship. Some common reasons include overwhelming debt, sudden unemployment, divorce, home foreclosure, or sudden illness.

In fact, the average credit card debt in New York is a whopping $5,799 per person. In addition, foreclosure rates are also as staggering, one out of every 1,672 NY homes is currently in foreclosure.

If you have found yourself in similar situations, then you are more than likely battling other personal problems that come with living in debt. The fear of losing your automobile, house or your income can drain a person emotionally. You have probably even considered Filing Chapter 7 or Chapter 13 Bankruptcy .

If you are thinking “Can I File Bankruptcy?” you are certainly not alone. Just under a million people file bankruptcy each year in the US. Bankruptcy is a tool created by the US Government to help struggling Americans find relief from heavy debt. You may want to check your eligibility for bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy gives people the opportunity to get out from underneath considerable debt while still working with lenders in a legal capacity. It is initiated by an individual filing a Petition with their nearest bankruptcy court. The Petition can be filed by an individual or by spouses jointly. When the bankruptcy is finished, the filer will ‘exit’ and will have a chance for a fresh start on their finances.

Throughout the bankruptcy, a trustee is appointed to oversee the particulars of the case. His or her duties will vary and depend on whether the individual has filed for Chapter 13 or Chapter 7 bankruptcy.

Did you know that New York ranks #40 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 162 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

Individuals or couples in New York, who claim bankruptcy, will elect to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. Want to know the difference? Look below for more information

Chapter 7

In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.

Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation

Chapter 13

A Chapter 13 Bankruptcy plan is reserved for people who have the means to pay some of their debts through a restructuring. You will be allowed to keep your valuable assets over a 3- to 5-year time frame.

In order to decide which type of bankruptcy a person will file, he or she will have to determine their ability to repay under the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.

What Are Bankruptcy Exemptions?

Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.


  • Real property, including mobile home, condominium, or co-op, up to $82,775, $137,950, or $165,550, depending on the county.

Personal Property

  • Clothing, furniture, refrigerator, TV, radio, sewing machine, security deposits with landlord or utility company, tableware, cooking utensils and crockery; stoves with fuel to last 120 days, health aids (including service animals with food), church pew or seat, wedding ring, bible, schoolbooks, pictures; books up to $550; domestic animals with food to last 120 days and up to $1,100; wedding ring, jewelry, art, watch to $1,100; spendthrift trust fund principal; 90% of trust fund income if not created by debtor; college tuition savings program trust fund; recovery for injury to exempt property up to 1 year after receiving. Exemptions cannot exceed a total of $11,025 including tools of trade and limited annuity.
  • Burial plot up to 1/4 acre without a structure on it.
  • Savings and loan savings up to $600.
  • Motor vehicle up to $4,425 ($11,025 if equipped for disabled person); lost future earnings recoveries needed for support; personal injury recoveries up to 1 year after receipt; wrongful death recoveries for a person you depended upon for support.
  • Personal injury recoveries to $8,275.
  • Cash (including savings bonds, tax refunds, bank & credit union deposits) to $5,525 or, if debtor does not use homestead exemption, whatever is left of the $11,025 personal property limit


  • 90% of earned but unpaid wages received within 60 days of filing for bankruptcy; 90% of earnings from milk sales to milk dealers; 100% for a noncommissioned private, officer or musician in the U.S. or N.Y. state armed forces.
  • Wages exempt from installment payments while on public assistance.


  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
  • IRAS and Roth IRAs to $1,283, 025
  • ERISA-qualified plans, Keoghs and IRAs needed for support.
  • Teachers.
  • Public retirement benefits.
  • State employees.
  • Village police officers.
  • Benefits of volunteer ambulance workers.
  • Benefits of volunteer firefighters.

Public Benefits

Debtor & Creditor 282 – Unemployment benefits; veterans’ benefits; Social Security; aid to blind, aged, and disabled; crime victims’ compensation; home relief, local public assistance; public assistance; worker’s compensation.  Public benefits does not include earned income tax credit (In re Fasarakis, 423 B.R. 34 (E.D.N.Y 2010)) but might include rent controlled lease (In re Santiago-Monteverde, 2014 N.Y. Slip Op. 08051 (Ct. App. N.Y. 2014).

Tools of Trade

  • Professional furniture, books, instruments, farm machinery, team and food for 60 days, up to $3,300 total; arms, swords, uniforms, equipment, horse, emblem and medal of a military member.

Alimony and Child Support

  • Alimony and child support.


  • Annuity contract benefits due to the debtor if he or she paid for the contract up to $5,000, if purchased within 6 months of filing for bankruptcy and not tax-deferred.
  • Life insurance proceeds left at death if policy prohibits use to pay creditors.
  • Disability or illness benefits up to $400 per month; life insurance proceeds, dividends, interest, loan, cash, or surrender value if beneficiary is not the debtor or if the debtor’s spouse has taken out the policy.


  • Business partnership property.


  • In lieu of homestead, $1,100 of personal property, bank accounts, or cash.  

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

You are not required by law to hire an attorney to declare bankruptcy. People are allowed to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Filing alone is not an easy task.

Filing Bankruptcy without an Attorney

A basic Chapter 7 filing that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that may not require an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

Most of the time, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy lawyer is there to represent you and not the creditors.

An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in NY, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In New York

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In New York

James T. Foley United States Courthouse
445 Broadway
Albany,NY 12207
New York Northern Bankruptcy Court

Alexander Pirnie Federal Building
10 Broad Street
Utica,NY 13501
New York Northern Bankruptcy Court

James M. Hanley Federal Building
100 South Clinton Street
Syracuse,NY 13261
New York Northern Bankruptcy Court

Olympic Towers
300 Pearl Street
Buffalo,NY 14202
New York Western Bankruptcy Court

Kenneth B. Keating Federal Building
100 State Street
Rochester,NY 14614
New York Western Bankruptcy Court


Additional New York Resources

Foreclosure Help Program

Disability SSDI Benefits