New York Bankruptcy Laws – Federal, Yet Local

local bankruptcy familiarityNew York bankruptcy laws are unique inasmuch as they reside within the federal Bankruptcy Code.

In fact, the laws vary from courthouse to courthouse, trustee to trustee.

Bankruptcy laws are federally-based. Title 11 of the United States Code governs how bankruptcy cases are handled, administered, and filed.  The judges are appointed under the federal system.  The courthouse is federal, too.

But the actual exemptions used in New York?

The list of things you get to keep in bankruptcy?

New York decided to blend its approach, allowing you to use New York laws for bankruptcy matters as well as the federal ones. In that respect New York bankruptcy laws are different than those in, say, California.

The local equation doesn’t stop there, I’m afraid.  Your Chapter 7 case in Ohio is significantly different that your Chapter 7 bankruptcy in Manhattan, which is in turn different than the Chapter 7 case in Brooklyn or Long Island.  Why?  Because Manhattan is part of the Southern District of New York whereas Brooklyn is part of the Eastern District of New York.

One subway stop, two separate judicial districts.  And with those different districts come a whole different set of local rules that govern the processes.  Not radically different, but different enough to matter.

Now let’s get to the big differentiator – the trustee.  You could be in bankruptcy court in Manhattan and have one trustee (no, I’m not naming names) with a simple and pleasant experience.

The same person with a different trustee and the exact same case may have a miserable experience in the hands of the wrong lawyer.  With over a dozen bankruptcy trustees in each of the bankruptcy courts in New York, there’s a significant variation in the attitudes and personal preferences of each one.

So how do you maximize your chances for success when you file for bankruptcy in New York?  You need to take a hard look at your lawyer and be sure that he or she knows the trustees and the local rules.

Local rules are easy – anyone can read them on the court websites.

But being able to gauge the habits and preferences of each trustee?  That’s the difficult part of the equation.

It’s one of the major reasons why we don’t file bankruptcy cases in Buffalo; the trustees and local rules in the Western District of New York are foreign to us.  We may know our stuff, but the local customs would spell disaster for our clients if we were to do any work in that region.

Photo courtesy of tom706.

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About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.