Filing For New York Bankruptcy: When & Which Assets Are Included?
UPDATED: March 9, 2020
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Filing for bankruptcy in New York is often a very difficult decision ï¿½ and one that many debtors don't fully understand. Knowing when to file, what assets are included and excluded such as cash, credit cards, mortgages, furniture, cars, IRAs, retirement plans and security deposits ï¿½ and whether or not you can pick and choose what must be included ï¿½ are questions that one New York lawyer gets all the time.
NY Attorney Elliot Schlissel
Elliot Schlissel, a New York bankruptcy attorney, explained when to file for bankruptcy, what assets are included and excluded and whether or not you can pick and choose what must be included. Here's what he told us in a recent interview:
When to file for a New York bankruptcy?
Schlissel told us that people should file for bankruptcy if they don't have adequate financial resources to renegotiate their debts and pay them. He says, ï¿½The basic standard is negative cash flow or, simply stated, an inability to pay your debts and bills as they become due. If you canï¿½t pay your debts or your bills as they come due, you are bankrupt.ï¿½
What assets are included in bankruptcy?
The better question, according to Schlissel, would be what assets are excluded from the bankruptcy ï¿½ meaning what assets can you keep after you file bankruptcy? He told us that the following items are excluded from being taken from you in bankruptcy:
- $2,500 in cash and $2,500 in clothing and household furniture, or $50,000 in equity in a home that is located in New York and is the principal residence of the debtor;
- car with up to $2,400 in equity;
- ï¿½qualifiedï¿½ retirement plans, such as 401ks and 403b plans;
- IRAs (Individual Retirement Accounts);
- up to $600 in work tools;
- personal injury compensatory recoveries up to $7,500 (not including pain and suffering);
- security deposits held by a landlord or the like.
You can't pick and choose
Schlissel says that you cannot choose which assets will be included in the bankruptcy and which ones will not. He explained:
All assets have to be listed in the bankruptcy and dealt with through the bankruptcy. The same holds true with debts. You canï¿½t pick which debts are included, or excluded, from the bankruptcy. However, after you list all your debts, you can agree to reconfirm some of those debts and pay them post- bankruptcy. It is against the law to hide your assets or transfer them and then try to file bankruptcy. Thatï¿½s considered bankruptcy fraud.
If you would like to obtain additional information about filing for bankruptcy in New York, contact an experienced bankruptcy attorney to discuss your situation free of charge.