How Long is the Bankruptcy Process in NY State?

by Michael H. Schwartz
Couple having problems with filing for bankruptcy in New York.

The objective of a bankruptcy filing is to wipe away debt and position yourself to rebuild your credit and financial well-being. These objectives are achievable with focused effort over time, but completing the bankruptcy process comes first.

In general, you should be able to file for bankruptcy relief promptly after meeting with a bankruptcy attorney and gathering the necessary financial documents. How long a Chapter 7 bankruptcy takes depends upon the complexity of your financial situation, but you should be able to complete a Chapter 7 bankruptcy within a matter of months. A Chapter 13 bankruptcy is a multi-year process to repay debt.

The first step to ensure that your bankruptcy case proceeds as quickly as possible is to discuss your options with the knowledgeable White Plains bankruptcy lawyer Michael H. Schwartz, P.C. We can evaluate your circumstances and explain the steps necessary to pursue bankruptcy. We can get started as soon as you contact us.

Do You Qualify for Bankruptcy in NY?

There are two types of individual bankruptcies typically pursued under federal law, which regulates all bankruptcies.

Chapter 7 bankruptcy (also known as a straight bankruptcy) is a total discharge of debt. Credit card bills, medical expenses, personal loan debts, and other financial obligations may be forgiven without any requirement to pay off the debts.

Chapter 13 bankruptcy (also known as the wage earner’s plan) allows you to propose a plan to restructure your debt and repay creditors.

Whether you should pursue straight bankruptcy or Chapter 13 bankruptcy depends partly on your income eligibility and your goals. For example, under Chapter 13, you can attempt to modify your mortgage and keep property that you may not be allowed to keep in Chapter 7.

A straight bankruptcy is faster, but you must qualify for Chapter 7 through a means test that involves an analysis of your income and debts and your ability to pay your debts. People with significant disposable income may be ineligible for a straight bankruptcy, and Chapter 13 becomes the option available for them.

Only an analysis of your particular situation and your goals by a knowledgeable bankruptcy attorney can answer the question of which type of bankruptcy filing best serves your interests.

How Long Does It Take to File Under Chapter 7 in New York?

A typical Chapter 7 bankruptcy filing takes about 100 to 120 days from filing the bankruptcy petition to obtaining the final discharge of debts. However, the actual case may continue without an impact on you, the debtor.

Filing the bankruptcy petition with the Bankruptcy Court starts the case and establishes a stay, which means creditors can no longer hound you for payment. This happens after your bankruptcy attorney has examined your assets, debts, and income to determine your eligibility for Chapter 7 and gathered the information and documents necessary to portray your economic situation and to prepare a bankruptcy petition.

Before filing for bankruptcy, you also must complete credit counseling (about an hourlong session, which can be completed over the phone or online).

About four weeks (28 days) after filing for Chapter 7 bankruptcy, the first meeting with creditors will be held. In reality, this is a meeting with the Chapter 7 trustee, who will ask about your financial affairs and the circumstances leading to your bankruptcy filing and any concerns he or she has with your filing paperwork.

By law, your creditors have the right to attend this meeting and question you, but that rarely happens. As your attorney, Michael H. Schwartz would prepare you for this meeting and represent you at it.

As part of a Chapter 7 bankruptcy, you must complete the Pre-Discharge Financial Management Course (about two hours over the phone or online) within 45 days of the creditors meeting. You should arrange this with the same agency that provided your credit counseling prior to filing.

About 70 to 90 days after the date set for the meeting of creditors, you should receive notice that the discharge order wiping out your debts has been filed. Your role in the case effectively ends there, but the case remains open while the trustee converts assets to cash, reviews creditors’ claims and ultimately pays any claims that are allowed in New York.

How Long Does It Take to File Under Chapter 13 in New York?

Under a Chapter 13 bankruptcy, the debtor agrees to a three- to five-year plan to repay his or her debts. The Bankruptcy Court will not issue a discharge order until the agreed-to payments have all been made.

As with a straight bankruptcy, you would have to complete credit counseling before filing for bankruptcy and the Pre-Discharge Financial Management Course to be eligible for a discharge order.

As your attorney, Michael H. Schwartz will work with you to develop a plan to pay your debts without sacrificing your ability to maintain a household or support your dependents. Once we have developed a repayment plan and filed your Chapter 13 bankruptcy petition, the trustee would schedule what is called a “341 meeting of creditors” for some time within the next 28 days.

Creditors rarely attend the creditors meeting. The meeting is used to review the paperwork with the bankruptcy trustee handling your case. The trustee, who will receive your payments and redistribute them to creditors, will seek to ensure that you understand the payment plan and his or her procedures and policies. As your attorney, Michael H. Schwartz would prepare you for this meeting and represent you during it.

After all potential issues have been resolved, a confirmation hearing will be held within 90 days to finalize the plan. Once the payment plan has been confirmed, creditors must file claim forms with the court requesting payment. The trustee and your attorney will ensure each claim is valid and properly documented. If we or the trustee find reason to dispute a claim, your monthly payments under the plan could be adjusted accordingly.

During the duration of your bankruptcy afterward, you won’t need to be in contact with the Bankruptcy Court or the Chapter 13 trustee except to submit monthly payments and to provide annual copies of your tax returns.

Contact Us About Rebuilding Your Financial Life

No matter how long the bankruptcy process takes, it’s up to you to make the smart decision to get started. You don’t have to live with unmanageable debt dragging you down. The law office of Michael H. Schwartz, P.C., is an experienced New York bankruptcy law firm that can help you get your financial life back on track.

Call Michael H. Schwartz, P.C. at (800) ON MY SIDE today or fill out our online contact form. We are ready to meet with you at our White Plains offices or virtually to discuss your case. If you’re wondering if you should file bankruptcy in New York, let us help you now.

Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.