When you file for bankruptcy in New York, your case will have one of two outcomes: discharge or dismissal. What happens in your instance will depend on whether or not you fulfill the requirements imposed upon you by the bankruptcy court.
In a Chapter 7 bankruptcy, you are required to do the following:
- File accurate schedules
- Attend a Section 341 meeting with creditors
- Provide all non-exempt property to your trustee
- Attend a financial management course
If you opted for Chapter 13, which calls for a repayment plan, then you must follow its terms regarding how much to pay each month and for how long, as well as which debts must be paid.
If you fail to meet all the requirements of your bankruptcy chapter, then your case is dismissed and closed without you receiving a discharge from your debts. There are, however, other situations that could result in a case dismissal. They include:
- Bankruptcy fraud: Some debtors abuse the system by concealing assets, trying to find ways around court orders, and filing for the sole purpose of spiting their creditors. If the court concludes that you have behaved in a fraudulent manner, your discharge will be denied, your case may be dismissed with prejudice (meaning that you may not be able to file for bankruptcy protection in the future) and you could even be subject to criminal prosecution.
- Failure to complete credit counseling: Before you can file, you must attend a credit counseling course and present a certificate of completion. If you fail to do so, then the bankruptcy court will dismiss your case.
- Failure to complete debtor education: After filing, you are required to attend and complete a second class for personal financial management. If you do not complete it, then the court will close your case, and you will not be discharged from your debts.
- Court filing fees not paid: When you file for bankruptcy, you must pay a filing fee to the court. The only exception could be if you file for Chapter 7 and receive so little income that the fee is waived. Otherwise, the court will dismiss your case if you donâ€™t pay.
- Chapter 13 payments not made: Chapter 13 bankruptcy allows you to catch up on missed payments for both secured (e.g. mortgage) and nondischargeable loans such as back taxes and child support. In return, you must make monthly payments in accordance with your court-approved plan. Failure to do so can result in your case being dismissed.
If you are thinking about filing for bankruptcy, then a New York bankruptcy attorney can advise you of your options and make your obligations clear so that the chances of your case being dismissed due to an oversight are significantly reduced. Jayson Lutzky is a Bronx, NY bankruptcy attorney with more than 33 years of legal experience. He offers free in-office initial consultations. Call 718-329-9500 to set up an appointment or visit www.MyNewYorkCityLawyer.com. Saturday office hours are available.