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Cost of Bankruptcy in New York Revealed

April 16, 2012 | Comments: 0 | Views: 218

Simply considering bankruptcy can give a person a sense of worry and anxiety about their future. Although it is a major event in your life, it is a very common procedure meant to help individuals and companies when they are unable to reach sustainable profitability or pay off debts.

Knowing that this can be a beneficial move, it is important to also consider the costs that are involved when going through the bankruptcy process. Having a strong comprehension of what goes into a bankruptcy filing in New York will ensure that you are well informed and prepared to approach this situation in the most efficient manner possible.

Cost of Bankruptcy Examples

In the state of New York, the filing fee for Chapter 7 bankruptcy is currently $306, whereas a Chapter 13 filing will cost $281. To decide which type of bankruptcy is the right avenue for your personal situation, a Means Test is usually implemented. This test is a formula comprised of your gross income (including spouse), as well as any other sources of income, other than Social Security. If less than the median income for New York State (one person - $45,931; four person household - $81,212), then you qualify for Chapter 7. If you are above the median, or would like to keep from liquidating your assets (house, car), then Chapter 13 may be a better option.

With regard to Chapter 7 bankruptcy attorney fees, this varies depending on the attorney that you work with, along with the estimated complexity of your particular case. Detailing the following sample cases can give you a good idea of what to expect:

•You are a retiree living on fixed income and do not own a home - $800. •You are working and being paid wages, your gross income is below the median in New York and you do not own a home - $900 for a single filing, $1,100 for a joint filing. •You are working and being paid wages, your gross income is above the median in New York and you do not own a home - Single filing - $1,100; Joint filing - $1,300. •You are working and being paid wages, your gross income is above the median and you DO own a home- $ 1,300 for a single filing; $1,500 for a joint filing. •You are married, self-employed (running a sole proprietorship), your spouse is working and being paid wages, your combined gross income is above the median and you own a home - $1,600 for a single filing; $1,800 for a joint filing. •You are married, you own a small business (such as a deli or retail shop), your spouse is working and being paid wages, your combines gross income is above the median income and you own a home - Single filing - $1,800; Joint filing- $2,000.

For a Chapter 13 filing, a standard fee can range from $3,500 to $4,000. In many cases, only part of this is paid prior to the bankruptcy filing, with the remaining balance being paid back as part of the Chapter 13 repayment plan that is required by the court. This fee may increase depending on if you would like judgement liens avoided, or to strip a second mortgage lien.

With this basic knowledge of the average costs involved in filing for bankruptcy protection in New York, you can approach the situation in a confident and well informed manner, increasing the chances for a simpler and less stressful bankruptcy process.

Andrew M. Doktofsky is an experienced New York attorney representing clients in Chapter 7 and Chapter 13 bankruptcy filings, consumer law, foreclosure defense and probate cases. He makes it a priority to help New Yorkers understand the bankruptcy process and determine if it is the most beneficial solution to their financial problems. As a Long Island bankruptcy lawyer, Andrew M. Doktofsky provides an educational and transparent explanation of the pros and cons surrounding the process for consumers.

Source: EzineArticles
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