There are a few rules when it comes to filing for bankruptcy under Chapter 7 or Chapter 13. But why actually file? How do you know if you can apply? What if you’re not eligible now, but will be soon? This guide focuses on helping New Yorkers who are interested in applying for help.

Why File Bankruptcy in New York?
Bankruptcy is generally about saving money on debt or protecting property. Nationally, unemployment rates are nearly 10 percent and foreclosures are a major problem. In New York state, unemployment is lower than the national average, around 8 percent, but foreclosures remain a major problem. While New York hasn’t been as high as states like Florida and California in terms of foreclosures, like the rest of the country, they’re still a problem.

Which brings up the point of filing for bankruptcy here in New York. If you don’t have a job, how can you pay a $20,000 medical bill? If you just lost your job, how can you keep your $200,000 house? The scenarios are many, but the point is that sometimes the problems are out of our hands. But you can always take action, you can protect yourself by filing bankruptcy.

Chapter 7 can write off that $20,000 medical bill or whatever is on your credit cards.
Chapter 13 can protect your home and car from being hijacked.

When can you file for bankruptcy in New York?
The Bankruptcy Code changed in 2005, making a “means test” all the rage. First, this means that if you make too much money, you may not be able to take advantage of Chapter 7. Also, if you owe too much, you may not be able to file Chapter 13. In Chapter 7, it is based on how much you make . For New York residents, the current median income is as follows.
$46,523 for individuals in New York.
$57,006 for a family of 2
$67,991 for a family of 3
And $83,036 for a family of 4. If you have more family members, you can earn more money and be eligible.

For Chapter 13 bankruptcy, the changes are uniform for all states. Unsecured debt, money owed without collateral like credit card or medical expenses, must be less than $336,900. Secured debts, such as your home and car, must be less than $1,010,650. As you can see, you have more breathing room in a Chapter 13 filing.

What happens if you are not eligible?
There are times when you may not be eligible for a Chapter 7 bankruptcy in New York State. However, if he believes his finances will change in a matter of months, he may still be eligible. The means test is not based on annual salary, but rather on how much you earned in the last six months. So if he made $100,000 one year, but then dropped to $20,000 the next, as an individual, he would be eligible for New York Chapter 7 once his last six months are low enough.

For Chapter 13, most are eligible. If you owe that much money, it’s time to talk to some financial advisors. You always have options.

Where can you find a good lawyer?
New York State has many good private attorneys and firms that can help you. The good news is that filing will be easy on your wallet. And because you have so many options, it won’t be too hard to find someone who can really help. Instead of waiting for a TV ad, consider focusing on proven attorneys with experience handling cases. And get one that you can afford with what you’re doing. You can do this online.