Bankruptcy is generally filed by those who are facing some kind of financial difficulties. Its main purpose is to get rid of the debts and allow people to start over financially. In these hard financial times, many person files for bankruptcy, but does not exactly know how to go about it. This article hopefully will help people in understanding the filing process under New York bankruptcy law.

1) Reasons for which bankruptcy can be filed:
Reasons like lawsuits, foreclosures and credit card debts, unemployment, divorce, etc . result in financial ruin. When it is evident that you cannot handle the debts anymore, it is time to file a bankruptcy as per the guidelines of New York bankruptcy law.

2) Choosing a proper lawyer:
It is of paramount importance to choose an experienced lawyer who’s well versed in the New York bankruptcy law. They are the people who will help you in filing the paper works, will evaluate the facts and figures, and be by your side at the court procedures. In accordance with the prevailing laws, they will conclude the most excellent and probable option that can be obtained for you. If you are not careful about the work ethics of your lawyer, then you can end up being in deeper trouble than you already are.
Now you might ask why you would need a lawyer and why you yourself cannot handle the entire process. Here is why:

The laws are complex and they help you with the filing options:
The laws are difficult to navigate; they are so complex, that without a legal professional to guide you, you will feel absolutely lost. It is your lawyer’s capability to decide on how to file that would have a permanent impact on the rest of your life. When it comes to individual filing options Chapter 7 is faster but has a cut off on income. Chapter 13 on the other hand, involves a five year payment plan. Choosing between the two depends on your situation, which can be best evaluated by a lawyer conversant with New York bankruptcy law.

Trustees and paperwork are their responsibility:
Most people who file for bankruptcy don't know how to fill out the paperwork correctly
and provide the required information. This is where a lawyer comes into the picture because they exactly know what mistakes are to be avoided and can guide you properly as to what all information is required by the court. A lawyer will be the best person to handle proper etiquettes and courtroom procedures, and present your case before a trustee on multiple occasions.

They help you deal with the creditors:
One point of harassment can be a creditor’s constant call which can make life difficult for a bankrupt person. The lawyer, once hired hopefully will provide you some respite from creditors’ calls and harassment, as they will be handling all these on your behalf by practicing their Fair Debt Collection Practices Act.

3) Main types of bankruptcy filed forms:

Chapter 7 and a chapter 13 are the two chief types of bankruptcy filed forms according to New York bankruptcy law. For person who has filed for bankruptcy, Chapter 7 is the most widespread for erasing debt. The debtor is free, as all repayment obligations are taken care of, and Chapter 7 does give a unsullied beginning to an individual by improving his financial conditions. Chapter 13, on the other hand, is less damaging to your credit. You will be working to repay your debts on a payment plan and hence you do not look like you are financially reckless though there are still marks against you. You are still measured as a slight credit risk in chapter 13. You will not lose your home and your assets in order to pay back your creditors with a chapter 13 like you would in chapter 7.

In conclusion it is sufficient to say that there are two main purposes of filing a bankruptcy under the New York bankruptcy law. It gives creditors a fair share of the money that debtors can afford to pay back, and on the other hand, it gives debtors a fresh start. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 passed on October 17, 2005, is the new law which makes it much trickier for consumers to file for bankruptcy. Before bankruptcy is complete people also have to complete a financial management seminar and a credit counseling session. So now as per New York bankruptcy law, The consumers should be getting trained on subjects like budget development, money management, consumer information and how to use credit wisely.

Author's Bio: 

The writer of this article, Jonathan Bodner, has been practicing law in New York for the past ten years and has absolute knowledge regarding New York bankruptcy law, and how it can help people,