New York Bankruptcy Law (NY)
How New York law is affected by the new means testing provisions under the Code
The advent of new reform laws affect all New Yorkers differently. One of the more dubitable provisions creates a test measure based upon the New York median income level (statewide). In short, any person who earns above the median income for New York State may not file Chapter 7, and further, must propose a Chapter 13 plan of 5 years, unless all debts can be repaid sooner.
This test law will be particularly onerous upon Manhattan residents, and other people who reside in historically expensive areas, because the means testing requirement does not include cost of living adjustments. For example, a potential debtor who earns $75,000 while living in Manhattan posses less disposable income than residents of small rural communities upstate. Nevertheless, in under new laws, each must qualify for Chapter 7 bankruptcy law discharge upon the same terms, yet oddly, Chapter 13 payments do include a cost of living adjustment based up a new national Standards schedule of permissible living expenses.
Qualifying for discharge is somewhat more difficult today, yet with the assistance of competent New York counsel, most people will receive an eventual discharge. Because of the leeway inadvertently left in hastily crafted statutes, these opportunities are expected to remain for at least another year.