To qualify for relief under Chapter 7 of the United States Bankruptcy Code, the filing debtor in New York needs to be an individual, a partnership, a corporation, or other business entity. No matter who you are, whether a doctor, corner coffee shop owner, or big name corporation, filing for chapter 7 bankruptcy can provide you a fresh start. While some debts are not dischargeable by law, such as tax debt, an experienced New York bankruptcy attorney can work closely with you to help you understand what expectations you should have throughout the bankruptcy process.
As an individual, to qualify for Chapter 7 Bankruptcy, you must satisfy “means testing,” a mathematical calculation used to establish if an individual debtor qualifies for a Chapter 7 based on income, the median income for your residential area, and certain “allowable expenses” determined by the government. To ensure a painless and stress-free bankruptcy, stay away from these seven deadly sins:
Sin #1: Poor Organization in the Bankruptcy Petition
Spelling and grammatical errors not only distract the trustee and court reviewing the petition, but also demonstrates a lack of care. Though a petition may not be denied for these types of errors, they affect the overall credibility of the petitioner.
Sin #2: Abusive Language
Sometimes the facts may require a debtor to resolve a dispute with the creditor. Do not belittle an opponent in court. Being persuasive does not require using disparaging tone.
Sin #3: Abbreviations
Avoid unnecessary abbreviations in legal filings that waste a court’s time in attempting to decode the meaning, or having to refer back to earlier text to create a glossary.
Sin #4: Not Knowing the Rules
Engage an attorney who knows the local rules and federal bankruptcy laws. Not every bankruptcy court is the same. Some trustees require certain forms to be filled out before going to a 341 hearing. Before launching to a hearing, fill out all forms and be prepared on what will be asked with an attorney who knows the process well.
Sin #5: Long Answers
While it is important to be honest, at a 341 hearing, answer only the questions asked. The trustee is looking for something specific in every question. Avoid lengthy explanations that introduce assumptions or facts not found in the question.
Sin #6: Not Attending Required Classes
The Chapter 7 process begins with credit counseling. The Chapter 7 process ends with a debtor education class. Make sure to attend all the required classes in order to get a discharge.
Sin #7: Lying
A person will not get a fresh start if s/he lies through the bankruptcy process by hiding assets, changing the names on property title, or racking up credit card spending while a petition is pending. These actions may result in criminal and civil liabilities.