Q&A: What income threshold would you have to meet in order to discharge all your debt, in a bankruptcy filing in NY?

Question by Tongo44: What income threshold would you have to meet in order to discharge all your debt, in a bankruptcy filing in NY?
Bankruptcy

Best answer:

Answer by rpg
Superficially the current median income (per household size) for NY is:

1 mortal ,803
2 people ,898
3 people ,477
4 people ,966

In other words, if you acquire less than that amount (depending on your household size) in NY you are automatically eligible to file Ch 7 (the bankruptcy Chapter that discharges all debts).

If you acquire more than the median, it does NOT mean that you automatically must file Ch 13 (the one in which you commit future disposable income to at least partial repayment of your debts). It means that your attorney will need to complete the “long form” of the Means Test, which grants deductions for various expenses (similar to the long form of an income tax return). Most bankruptcy attorneys report that a great many clients who, on first glance, APPEAR not to pass the Means Test, actually do pass it (i.e., can file Ch 7) after all the acquirable deductions are taken on the Long Form of the Means Test.

Make an appointment with a local bankruptcy attorney to receive an assessment of your particular situation. Most offer one free or very low cost appointment to review your particular financial situation and advise you regarding your bankruptcy and non-bankruptcy options.

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Filling Bankruptcy? Know Different Non Dischargeable Debts

Filling Bankruptcy? Know Different Non Dischargeable Debts

After incurring large debt by many Americans during this tough time, many are finding a way to get rid of that debt with bankruptcy. But, during the overhaul of 2005 bankruptcy laws has changed that does not cover all the debt for intoxicant of discharge, which was once upon a time considered as a fresh begin of finance after filing bankruptcy. Contrary to that, not all debts are dischargeable regardless of your bankruptcy filing options.

For debts like student loans issued by federal government called as secured student loans, mortgages, taxes, child support regardless of the bankruptcy option you filed, you must make a repayment plan to pay off rather than these debts are absolutely discharged. In such cases, the court you filed bankruptcy petition will appoint a trustee to liquidate all your assets and use the proceeds to pay of the creditors. The changes of bankruptcy laws were driven in a way to prevent the abuse of system to get rid of debt and harm the financial system.

Therefore, the bankruptcy filing does not solve all of debtor’s financial problems. The changes brought to law as the court sees that allowing discharging such debt could affect the nature of the society and are made non dischargeable debts in a typical bankruptcy filing. The main intention behind changing these laws is that people can not relinquish their obligations to pay such as alimony, child support and any other debts that contribute to welfare of the society.

Student loans are also added to this list because of the amount of money that is allowed each year for college education. These are loans that is very hard to get discharged with bankruptcy. Until recently, these are part of debts that are discharged with bankruptcy, but current overhaul of bankruptcy in 2005 have changed the laws.

Here is the list of debt that can't be discharged with bankruptcy filing:

Taxes: the taxes that are due to federal, say or local and municipal taxes that are due within last three years are not discharged with filing any chapter of bankruptcy.

Student loans: the student loans that are issued by federal government are not discharged with bankruptcy that has been in repayment position for at least seven years. In some rare cases, even though this type of loans is not discharged with current changes to bankruptcy laws, some older student loans can be discharged provided if a serious hardship exists.

Fraudulent debt: if court finds that the debt incurred was illegal then that will not be discharged. For example: if you have incurred credit card debt shortly before filing bankruptcy that is if you are filing bankruptcy within 90 days of incurring debt then the court will refuse to discharge that debt with bankruptcy.

Alimony and child support ordered by court are not discharged until and unless the recipient concurs to it. This debt is not discharged as this kind of actions will harm the nature of society.

These are some of the debts that are not discharged with bankruptcy with interest of the recipient of the payments.

Obstacles of Bankruptcy – Which Obligations Cannot Be Discharged Through Bankruptcy

A bankruptcy discharge means a legal eradication of debt where the debtor’s financial liabilities are erased. This protects the debtor from individualized liability on the discharged debt. Only individual debtors are eligible for discharge of debt, corporations can't avail a discharge.

However, even for individual debtors, certain debts can't be discharged during bankruptcy. Unpaid taxes that have been due within 3 years of the bankruptcy filing on returns that were filed on time, or on returns that were filed late within 2 years of the bankruptcy, or taxes that have not been paid because the debtor unsuccessful to file a return, or filed a fraudulent return or tried to evade the tax are not dis chargeable.

While filling up his / her bankruptcy forms, if the debtor did not list a creditor, then the debt survives bankruptcy and is not discharged unless the creditor learned, in some other way, about the bankruptcy soon enough to file a claim or to challenge the discharge of its debt. Similarly, domestic support obligations (like maintenance, alimony, and child support) are not dis chargeable. Debts resulting from fraud, misuse of funds, embezzlement, or larceny, debts that were taken under false pretenses, including bogus representation, fraud, or false financial statements, debts accumulated as a result of the buy of luxury merchandise or cash advances, student loans and debts resulting from willful and malicious injury can't be discharged. Similarly, liability for injuries or death resulting from driving while under the influence of alcohol or other drugs is not dis chargeable.

If the debtor had filed bankruptcy early and either waived the discharge of a particular debt or was denied a discharge by the court, as a result of acts of bad establishment or unlawful behavior by the debtor, then the debt is permanently non-dis chargeable. However, if the debtor’s inability to receive a discharge was because he had obtained a previous discharge after which a adequate amount of time has not passed before the law grants another discharge, then the debtor might be granted to discharge those debts in a subsequent filing that would have otherwise been dis chargeable if not for the time bar.
Their are several debt relief options acquirable in this market so it would be wise to talk with a debt relief specialist to determine which option makes the most financial sense for you. Whether it is credit counseling, debt settlement, debt consolidation, or bankruptcy, a debt relief specialist will be healthy to steer you in the right direction.

Check out the following link for a free debt consultation from a specialist in your area:

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Obstacles Bankruptcy – what obligations can not be dismissed through bankruptcy