How to File Bankruptcy If You Have Multiple Properties in New York

Filing for bankruptcy can be a complex process, particularly if you own multiple properties in New York. Understanding how to navigate this process can help protect your assets while alleviating financial stress. Below, we outline the steps to file for bankruptcy when you have multiple properties.

1. Understand the Types of Bankruptcy

In the U.S., individuals typically file for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 involves liquidating non-exempt assets to pay off debts, while Chapter 13 allows you to keep your property and restructure your debts into a manageable repayment plan.
If you have multiple properties, you need to assess which type of bankruptcy suits your financial situation the best.

2. Evaluate Your Properties

Determine the value of your properties and any outstanding liens. This assessment will help you understand the equity in each property, which is crucial when deciding on the appropriate bankruptcy chapter to file. In New York, each homeowner is allowed a homestead exemption, which can protect some equity in your primary residence.

3. Consult a Bankruptcy Attorney

Given the intricacies involved in filing for bankruptcy with multiple properties, consulting an experienced bankruptcy attorney in New York is essential. They can provide insight into local laws and help strategize the best approach for your specific case.
Additionally, an attorney can help determine if you should consider transferring any properties into an LLC or other entity to protect them from liquidation.

4. Gather Financial Documentation

You will need to compile various financial documents, including tax returns, bank statements, property deeds, mortgage statements, and a list of all your debts. This information will be required when filling out your bankruptcy petition.

5. File the Bankruptcy Petition

Once you have gathered all necessary documentation, you can proceed with filing your bankruptcy petition. This includes completing a comprehensive bankruptcy schedule that lists all your assets, liabilities, income, and expenses. Make sure that all your properties are listed accurately, as this information affects your bankruptcy outcome.

6. Attend the Credit Counseling Session

Before filing bankruptcy, you are required to undergo a credit counseling session with an approved agency. This step is essential for understanding your financial situation and exploring alternatives to bankruptcy. Upon completion, you'll receive a certificate that you'll need to submit with your bankruptcy petition.

7. Attend the Meeting of Creditors

After filing your petition, a Meeting of Creditors (also known as a 341 meeting) will be scheduled. During this meeting, creditors can question you about your financial situation and the properties you own. Your bankruptcy attorney will be present to assist you.
It’s important to be transparent, as concealing information can lead to complications or dismissal of your case.

8. Managing Your Properties Post-Bankruptcy

Once your bankruptcy case is approved, you will need to manage your properties diligently. If you filed for Chapter 7, non-exempt properties may be sold to satisfy creditors. In Chapter 13, you will continue to make payments on your mortgage and other debts as per the repayment plan.
It's essential to keep up with any ongoing costs, such as property taxes and maintenance, to avoid foreclosure or loss of the property.

Filing for bankruptcy in New York when you have multiple properties can seem daunting, but with the right steps and professional guidance, you can navigate this process more effectively. Make sure to stay informed about your legal rights and obligations throughout the process.