I lived in Los Angeles until about 18 months ago when I moved to New York City, where I was making about $6,000 per month. I was recently laid off and now receive unemployment compensation. I am over 62 and also receive about $1500 per month in social security and a pension of about $1,500 per month. My debts include credit cards and medical expenses of about $45,000. I have a few assets and I want to make sure these are exempt if I file for Chapter 7 bankruptcy under the new bankruptcy laws. I had to use a cash advance of about $1,500 last week to pay my living expenses. Do I qualify for Chapter 7 under New York Bankruptcy Law? (NY)

To file for Chapter 7 bankruptcy under New York Bankruptcy Law the filer must have resided in New York for over two years. A California resident who wished to file for Chapter 7 bankruptcy in New York after residing in New York for 18 months would be judged according to California law, not New York Bankruptcy Law, even though the bankruptcy was filed in New York. If the filer waited another 6 months before filing, the New York State exemptions under the new bankruptcy laws would be available.

When filing for bankruptcy after recently being laid off, it might be wise to wait in filing since income is determined by viewing income generated in the last 6 months prior to filing, if this would include some part of a salary even though the filer had been laid off. Social security and unemployment compensation are both not included as part of income for purposes of determining whether the filer’s income exceeds the median income in New York based on family size. New York Bankruptcy Law states any cash advance made within 70 days prior to filing in excess of $750 would be presumed to be non-dischargeable. It is advisable to wait until this 70 day period expires, preferably a little longer, prior to filing for bankruptcy in New York.

(Courtesy of Association of the Bar of the City of New York)