Rules and Regulations Pertaining to New York Bankruptcy Law
There are several chapters like chapter 7, 9,11,12,13 of the bankruptcy code under the federal law that governs New York bankruptcy laws. The various chapters of bankruptcy law cover various topics and are therefore guides on how to deal with and decide the cases that fall under each chapter effectively. Chapter 7 applies to debtors who have no assets to pay the debts. Chapter 9 deals with the cases of government municipalities. For the owners or shareholders of a company there is Chapter 11. Chapter 12 deals with fishermen and farmers. For salaried individuals or families, self-employed workers, and salaried employees, there is Chapter 13.
Under Chapter 7 of New York bankruptcy law, a person’s income in such cases must be less than median income. Under this chapter, the cases that are handled are almost completely exempt from debt, but some things like student loans, alimony, child support, fraudulently acquired debts must be paid. The rules are different under chapter 13 where the recovery is made from the person who files for bankruptcy after reorganizing the legal liability of the debt. This is usually done over a longer period of time and quite possibly at a lower interest rate, and also by lower monthly payments. But if someone thinks that filing for bankruptcy will make them immune to debt payment, they are wrong, since under no provision is there an option to get rid of the liability without paying the debts.
Strict federal laws have been put in place so that there can be some control over the random filing of bankruptcy. Today, in order to file a case under New York bankruptcy law, one has to fully convince the establishment that they really do not have any assets that can be used to pay off outstanding debts. Therefore, there is no other option than to declare bankruptcy, stop paying interest on debts. Documentary proof confirming an individual’s claims to be totally without assets is required to file a bankruptcy petition. The courts that handle bankruptcy cases generally decide which are the genuine and truly valid cases and assign them to the various chapters accordingly. There are also corporate bankruptcy cases where a company fails due to a variety of reasons and therefore has to declare bankruptcy, declaring that the company is unable to repay the debt because it has exhausted all its resources. At the same time, the company can also declare that, although it is bankrupt, it wants to continue its business activities. Chapter 11 deals with cases where the petitioner is the owner or shareholder of the business.
New York bankruptcy law prefers that cases be filed under chapter 13 and not under chapter 7, since under chapter 13 it is still possible to recover as much debt as possible. This is typically done by extending the payback period over a longer period of time, realizing the minimum amount due after rearranging the loan liability. But the really genuine cases in which the individual is not in a position to pay the interest on his debts, for example, people with a chronic illness, unemployed people, people with physical deformity or any other type of illness that implies high expenses, are archived. in chapter 7. This is a way to prevent scams and help genuinely broke people to recover, to establish themselves again in society. In this way, both the state and its people are protected and headed towards economic recovery.