Best Bankruptcy & Debt Lawyers in Brooklyn

About Bankruptcy & Debt Law in Brooklyn, United States

Bankruptcy is a federal process that allows individuals and businesses to resolve overwhelming debt under the protection of the federal bankruptcy code. In Brooklyn, New York, most bankruptcy cases are filed in the U.S. Bankruptcy Court for the Eastern District of New York. While bankruptcy is governed by federal law, state and local rules - including New York exemptions and local court procedures - shape how individual cases are handled. Common consumer options are Chapter 7 - liquidation - and Chapter 13 - repayment plan - with Chapter 11 used mainly by larger businesses or complex cases. Bankruptcy can stop many collection actions immediately through the automatic stay and can lead to discharge of eligible unsecured debts, while some debts remain nondischargeable.

Why You May Need a Lawyer

Bankruptcy law involves procedural steps, strict deadlines, and legal tests that can materially affect the outcome of a case. You may need a lawyer if you face any of the following situations:

- Persistent creditor collection calls, lawsuits, garnishments, or bank levies that you cannot stop on your own.

- The risk of foreclosure or repossession of a home or car and you need help determining whether to stop, delay, or cure the default.

- Questions about whether you qualify for Chapter 7 under the means test, or whether Chapter 13 is a better fit for reorganizing debts.

- Complex asset or exemption issues - for example, high home equity, retirement accounts, business ownership, or co-owned property.

- Potential nondischargeable claims such as recent taxes, student loans, domestic support obligations, or fraud allegations.

- Desire to negotiate with creditors, explore alternatives such as debt settlement or debt management, or protect co-signers and secured creditors.

An experienced bankruptcy attorney can evaluate options, prepare and file paperwork correctly, represent you at the meeting of creditors, and ensure you meet pre- and post-filing counseling requirements.

Local Laws Overview

Key local and state considerations for people in Brooklyn include the following.

- Federal framework with local administration - Bankruptcy proceedings are governed by the U.S. Bankruptcy Code and federal rules, but local practice follows the U.S. Bankruptcy Court for the Eastern District of New York. Local chambers, trustees, and court procedures can affect scheduling, notices, and filings.

- New York exemptions - New York State requires use of the state exemption scheme for most filers. Exemptions determine what property you can keep. Exemption rules and amounts vary by type of property and by where you live in New York, so local values and city housing market conditions can affect whether equity in a home or other assets are protected.

- Means test - Eligibility for Chapter 7 is subject to a federal means test that uses state median income figures and your household income and expenses to determine qualification. Many filers in Brooklyn will need to calculate this test to know whether Chapter 7 is available.

- Credit counseling and debtor education - Federal law requires a pre-filing credit counseling course and a post-filing financial management course before discharge. Approved providers include national and local nonprofit agencies. Proof of completion must be filed with the court.

- Local enforcement realities - Practically, Brooklyn residents should expect active creditor collections, and courts may require additional documentation for high-value estates, business owners, or mixed asset portfolios common in urban settings.

Frequently Asked Questions

What is the difference between Chapter 7 and Chapter 13?

Chapter 7 is a liquidation process where nonexempt assets can be sold to pay creditors and qualifying unsecured debts are typically discharged in a few months. Chapter 13 is a repayment plan - you pay creditors over three to five years based on your income and allowed expenses, and keep your assets if you comply with the plan. Choice depends on income, assets, and goals.

How do I know if I qualify for Chapter 7?

Qualification is determined by the federal means test, which compares your current monthly income to the median income for your household size in New York State. If your income is below the median you typically qualify; if above, you must complete a more detailed calculation of income and allowable expenses to see if Chapter 7 is permitted.

Can I keep my home and car if I file bankruptcy?

Possibly. Protection depends on the value of the property, the amount of secured debt, and applicable New York exemptions. In Chapter 13 you generally keep secured property if you make the required plan payments. In Chapter 7 you may keep property if it is fully exempt or if the secured lender chooses not to repossess.

Will bankruptcy stop credit card companies and other collectors from calling me?

Yes. Filing starts an automatic stay that generally prevents most collection calls, lawsuits, wage garnishments, and repossessions while the stay is in effect. There are exceptions for certain actions and creditors can ask the court for relief from the stay in specific circumstances.

Are student loans dischargeable in bankruptcy in Brooklyn?

Student loans are presumptively nondischargeable unless you can show undue hardship through an adversary proceeding. Courts use different standards, and proving undue hardship can be challenging, but relief is possible in limited circumstances.

How long will bankruptcy stay on my credit report?

A Chapter 7 bankruptcy can remain on a credit report for up to 10 years from the filing date; a Chapter 13 can remain for up to seven years. The practical effect on credit scores varies and many people begin rebuilding credit shortly after discharge.

What debts will not be discharged in bankruptcy?

Common nondischargeable debts include most domestic support obligations, many recent taxes, debts incurred through fraud or certain willful misconduct, and most student loans absent undue hardship. Specific rules and exceptions apply.

Can my cosigner still be sued if I file bankruptcy?

Yes. Bankruptcy typically discharges your personal obligation, but it does not eliminate a creditor's ability to collect from a cosigner who has not filed bankruptcy. If a cosigner files their own case, their rights and obligations will be assessed separately.

Do I have to attend any hearings in court?

Yes. After filing you must attend the meeting of creditors, commonly called the 341 meeting, where the trustee and any creditors may ask questions under oath about your finances and the paperwork you filed. Your attorney can attend with you and represent your interests.

How much does a bankruptcy lawyer cost in Brooklyn?

Fees vary by attorney, case complexity, and the chapter filed. Many attorneys offer a free or low-cost initial consultation. Chapter 7 attorney fees are often a flat fee; Chapter 13 typically involves a fee that can be paid through the repayment plan. Low-income filers may be eligible for legal aid or pro bono services.

Additional Resources

Helpful organizations and governmental bodies to contact or research include the U.S. Bankruptcy Court for the Eastern District of New York - the local court that handles filings in Brooklyn - and the U.S. Trustee Program, which supervises the administration of bankruptcy cases. For consumer guidance and complaint help, federal agencies such as the Consumer Financial Protection Bureau and the Department of Justice have educational materials about bankruptcy. New York State agencies such as the Department of Financial Services and local consumer protection offices provide information on debt and consumer rights. Local nonprofits and legal aid providers, including neighborhood legal services, the Legal Aid Society, and county bar association referral services, can help people who cannot afford a private attorney. Finally, approved credit counseling and debtor education providers are required to issue certificates for bankruptcy filings.

Next Steps

If you are considering bankruptcy in Brooklyn, take the following practical steps:

- Gather documents - recent pay stubs, federal tax returns for the last two years, bank statements, loan and mortgage statements, credit card statements, lease or title documents, and a list of monthly expenses and assets.

- Complete a preliminary budget and identify recurring payments and secured debts - this helps determine whether Chapter 7 or Chapter 13 is appropriate.

- Attend a consultation - meet with a bankruptcy attorney or a qualified nonprofit counselor to review options, timing, costs, and local court procedures. Bring your documents to the meeting.

- Complete required credit counseling - before filing you must take an approved credit counseling course and obtain a certificate. Plan to schedule this early since certificates are needed to file.

- Decide and file - if filing bankruptcy is the right step, your attorney will prepare schedules and petitions, file them with the Eastern District of New York, and guide you through the 341 meeting and any necessary hearings.

- Follow post-filing requirements - complete the required financial management course and comply with your Chapter 13 plan or any trustee requests to maximize the chance of a successful discharge.

Bankruptcy can be an effective tool for a fresh start, but it requires thoughtful preparation and adherence to federal and local rules. Consult a qualified bankruptcy attorney in Brooklyn to understand how the law applies to your specific situation and to protect your rights throughout the process.