Chapter 13 Bankruptcy Regulations in NY

Table Of Contents

What Are Chapter 13 Eligibility Regulations in NY?

Chapter 13 eligibility regulations in NY establish who files for Chapter 13 bankruptcy in New York State. An individual debtor has regular income. Regular income provides the ability to make plan payments over three to five years. The debtor's unsecured debts are less than a specific dollar amount. The debtor's secured debts are less than a separate specific dollar amount. Debt limits adjust periodically based on inflation.
A business entity cannot file for Chapter 13 bankruptcy. Only individuals, including sole proprietors, are eligible for Chapter 13. A sole proprietor's business debts are personal debts. These personal debts count towards the debt limits for Chapter 13. Debtors must complete credit counselling from an approved agency within 180 days before filing. This counselling requirement applies to all Chapter 13 filers.

How Do Income Requirements Affect Chapter 13?

Income requirements affect Chapter 13 by determining a debtor's ability to propose a feasible repayment plan. A debtor must demonstrate sufficient disposable income to meet Chapter 13 plan payments. Disposable income is the income remaining after paying allowed living expenses. The means test determines a debtor's disposable income. This test compares the debtor's income to the median income for a household of the same size in New York.
If a debtor's income is below the state median, the repayment plan duration is typically three years. If a debtor's income exceeds the state median, the repayment plan duration extends to five years. The debtor's proposed plan must commit all projected disposable income to plan payments. This commitment makes sure creditors receive the maximum possible repayment.

What Are Chapter 13 Plan Confirmation Regulations in NY?

Chapter 13 plan confirmation regulations in NY dictate the requirements for a bankruptcy court to approve a debtor's repayment plan. The plan complies with all provisions of the Bankruptcy Code. The plan is proposed in good faith. Good faith means the debtor intends to fulfil the plan's terms honestly. The plan is feasible. Feasibility means the debtor has the financial capacity to make all proposed payments.
A Chapter 13 plan satisfies the 'best interests of creditors' test. This test makes sure unsecured creditors receive at least as much under the Chapter 13 plan as unsecured creditors receive in a Chapter 7 liquidation. Secured creditors either retain secured creditor liens or receive payments equal to the value of secured creditor collateral. Over the life of the plan, the debtor pays priority claims in full. Priority claims include certain taxes and domestic support obligations.

What Are Mandatory Chapter 13 Plan Provisions?

Mandatory Chapter 13 plan provisions are specific elements a Chapter 13 plan includes for confirmation. The plan provides for the full payment of all priority claims. Priority claims include certain tax obligations and domestic support obligations. The plan commits the debtor's disposable income to plan payments for the applicable commitment period. This period is three or five years. The debtor's income determines the period length.
The Chapter 13 plan specifies debtor payments to the Chapter 13 trustee. The trustee collects payments from the debtor. The trustee distributes payments to creditors. The Chapter 13 plan addresses the treatment of secured creditors. This treatment includes maintaining payments on secured debts. This treatment includes surrendering collateral. This treatment includes modifying loan terms. The Chapter 13 plan outlines distributions to unsecured creditors. A bankruptcy law firm explains these provisions in detail.

How Do Chapter 13 Discharge Regulations Work in NY?

Chapter 13 discharge regulations work in NY by specifying the conditions a debtor must meet to receive a discharge of debts. A debtor receives a discharge after completing all payments under the confirmed Chapter 13 plan. This completion of payments is a fundamental requirement for discharge. The discharge eliminates the debtor's personal liability for most remaining unsecured debts. Certain debts are non-dischargeable under Chapter 13.
Before receiving a discharge, the debtor must certify completion of a personal financial management course. This course requirement helps debtors manage their finances responsibly after bankruptcy. The debtor cannot have received a prior Chapter 7, 11, or 12 discharge within four years of the current Chapter 13 filing. The debtor also cannot have received a prior Chapter 13 discharge within two years of the current filing.

What Debts Are Non-Dischargeable in Chapter 13?

Non-dischargeable debts in Chapter 13 are specific types of obligations that survive the bankruptcy process. Certain long-term secured debts remain non-dischargeable if the last payment date extends beyond the plan's duration. These debts typically involve mortgages or other loans with extended repayment schedules. Domestic support obligations, such as alimony and child support, are always non-dischargeable. These obligations must be paid in full.
Certain taxes, including recent income taxes and property taxes, are non-dischargeable. Student loan debts are generally non-dischargeable unless the debtor proves an undue hardship. Debts arising from fraud or wilful and malicious injury are also non-dischargeable. Criminal fines and restitution orders are additional examples of debts that survive Chapter 13 bankruptcy.

FAQS

What specific debt limits apply to Chapter 13 filers in NY?

Specific debt limits apply to Chapter 13 filers in NY. Unsecured debts must be less than a specified amount. Secured debts must be less than a separate specified amount. These amounts adjust periodically, so checking current figures is important.

How does a debtor prove feasibility for a Chapter 13 plan in Melville?

A debtor proves feasibility for a Chapter 13 plan in Melville by demonstrating sufficient disposable income. The debtor's budget must show an ability to make all proposed plan payments. The plan must also account for all necessary living expenses.

What happens if a debtor fails to complete Chapter 13 plan payments?

If a debtor fails to complete Chapter 13 plan payments, the bankruptcy court dismisses the case. Case dismissal means the debtor does not receive a discharge. Creditors pursue collection efforts for the original debts.

Can a Chapter 13 plan modify mortgage payments in NY?

A Chapter 13 plan cannot modify mortgage payments on a debtor's primary residence in NY. The plan can cure mortgage arrears. The plan can also modify payments on second mortgages or investment property mortgages.

Are all priority claims paid in full under a Chapter 13 plan?

All priority claims are paid in full under a Chapter 13 plan. This requirement makes sure obligations like certain taxes and domestic support receive complete payment. The plan duration often extends to accommodate these payments.

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