How to File Bankruptcy for Free in New York (2020 Guide)

Collect Your New York Bankruptcy Documents

The first step in preparing to file is to collect your bankruptcy documents. These are the documents you’ll need to fill out your bankruptcy petition. To make sure that you properly schedule all of your debts, get a copy of your credit report from each one of the three credit bureaus. You’re entitled to a free copy of your report from each one of them every year. Additionally, you should also collect all collection notices and letters you’ve received in the last 90 days from debt collectors and collection agencies as some of them may not yet appear on your credit report. 

You’ll also need your two most recent income tax returns as filed with the IRS and each paycheck stub you received in the last 6 months. Since your bank statements will prove useful in creating your budget for your life after filing Chapter 7 in New York, you should collect at least the two most recent ones for each one of your accounts.

Take Credit Counseling

One of the requirements everyone filing bankruptcy has to meet is completion of a credit counseling course. This course takes about 1 - 2 hours and can be taken online, by phone, or, depending on where you live, in person. The company you use to complete this requirement must be pre-approved to offer it in New York State. The Office of the United States Trustee handles the approval process, and publishes a current listing of all approved providers on their website.

It can be completed at any point in the 6 months before your bankruptcy filing. Once done, you’ll receive a certificate of completion to submit to the bankruptcy court along with the rest of your bankruptcy forms.

Complete the Bankruptcy Forms

This is probably the most technical part of any bankruptcy filing. If you’re eligible to file through Upsolve, we will handle the technical parts after collecting all of the necessary information from you. If you’re thinking of completing the forms on your own without anyone's help, make sure to download and review the 49 page instructions manualfor important information about each one of the bankruptcy forms. 

Of course, if you hire a bankruptcy lawyer they’ll do the heavy lifting in drafting all your bankruptcy forms based on the information you provide to their office. Regardless of which process you choose, make sure to take your time and be diligent and thorough in answering all of the questions. You will be signing these documents under penalty of perjury before they’re filed with the court, and errors or omissions can delay or even prevent the entry of your discharge.

Get Your Filing Fee

The court filing fee for a Chapter 7 bankruptcy is $338. If you are not eligible to apply for a fee waiver, but are having a hard time coming up with the fee all at once while creditors are still able to collect from you, you can file an application to pay the court filing fee in installments. This will allow you to get your bankruptcy case filed, and immediately initiates the automatic stay which prohibits your creditors from taking any further action against you. 

If you can, you should pay the full fee at the time your case is filed to eliminate the risk of dismissal. The best payment method, accepted at all New York State bankruptcy courts, is a money order. You can purchase a money order for $1.25 at a U.S. Post Office near you.

Print Your Bankruptcy Forms

If you have a bankruptcy lawyer assisting you, they’ll review the information with you and show you where to sign, then submit everything with the bankruptcy court via the court's electronic filing system. If you’re without a lawyer, you unfortunately can’t use the electronic filing system and have to submit a paper version of your bankruptcy forms to the court. To make sure you don't miss anything, it's a great idea to print a checklist like this one to keep you organized as you go through everything. 

If you are in the Western District of New York, you have to bring three copies in addition to your original bankruptcy forms to the court. You can either print everything four times, or, better yet, print everything once, sign where necessary then make four copies; three to file with the court and one to keep for your own records. 

Folks in the Eastern District are required to bring one original and one copy to the court . If you are filing in either the Northern or Southern Districts, only your original is needed, but it's a good idea to call the clerk's office before heading down there to confirm that this is accurate. Either way, you should have a hardcopy of everything you give to the bankruptcy court for your own records, so you can refer to it later if needed.

Go to Court to File Your Forms

The county you live in determines which district your New York bankruptcy will be filed in. You can go to any of the courts located in your district to file your forms, even if your case is ultimately assigned to a different division within the district. In response to the coronavirus pandemic, most courts have restricted hours or alternative filing options. So, before you make the trip to the courthouse, make sure to check what your court is doing. 

Mail Documents to Your Trustee

You will receive the name and contact information for your bankruptcy trustee a few days after your bankruptcy case is filed. The trustee's job is to administer your case, make sure that you’re not hiding anything, and review the circumstances surrounding your case to determine whether your creditors are entitled to a disbursement. Even though your tax returns are not actually filed with the court, you must provide a copy of your most recent federal income tax return to the bankruptcy trustee

Additionally, some trustees mail out a letter requesting certain other documents, such as paycheck stubs and bank account statements. Keep an eye out for any such request from your trustee and make sure you follow the instructions provided with respect to how and when to submit everything to the trustee's office.

Take Bankruptcy Course 2

You took a credit counseling course before your Chapter 7 bankruptcy in New York was filed in order to be eligible to be a debtor in bankruptcy. Now that your case has been filed, you have to take bankruptcy course 2 in order to be eligible to receive your bankruptcy discharge. This course focuses on financial management tools and aims to help folks filing bankruptcy in New York take full advantage of their fresh start, while managing their finances responsibly. 

The course itself only takes about 1 - 2 hours and, as before, can be taken online, over the phone, or in person. If you were happy with the company you used to complete the first bankruptcy course, you should find out if they are approved to offer the financial management course to folks filing bankruptcy in New York as well. If so, you can go through them again for this second course and may even be able to get a discount for taking both classes with them. If not, check out the list of providers approved to offer this course for New York bankruptcy cases published by the Office of the United States Trustee.

Attend Your 341 Meeting

Everyone filing bankruptcy in New York has to attend a meeting of creditors, often referred to as the 341 meeting because that’s the section of the Bankruptcy Code that requires it. You’ll find out the date and time your meeting will take place on the same notice that has your trustee's contact information. As a COVID-19 precaution, most 341 meetings are being done over the phone or by video at the moment.  

The trustee that is handling your case will be asking you some questions about the information contained in your bankruptcy forms and your financial situation generally. Not much preparation is needed, though it is helpful to review all of the bankruptcy forms you filed with the court to refresh your memory before the meeting.

Dealing with Your Car

Unless you happen to live in New York City, chances are you need your car to get around, whether that's to and from work, school, the grocery store or wherever. Filing bankruptcy in New York gives you the opportunity to deal with your car in a way that makes sense for you. If you’re struggling to make the payment every month and/or the balance owing on the car loan far exceeds the actual value of your vehicle, it may make sense to give the vehicle back to the bank. 

If you like your car and the loan makes sense both in terms of your ability to make the monthly payments and the balance left owing, you can keep everything the way it is by entering into reaffirmation agreement. Since this means that you’ll continue to be responsible for the full balance left on the loan, you should only do this if the car is in decent condition and you can make the payment every month without problem. 

If you own your car outright, then everything stays the same as long as the available exemption is high enough to cover its full value.