New York bankruptcy laws have considerably checked filing of bankruptcy cases on account of strict federal laws. To file a case one has to fully satisfy the authorities that he has no assets to pay back the debt and therefore is left with no other effective option to stop paying interest on the debt. An individual while filing his case has to furnish a documentary proof that he has no assets to repay the debt as per New York bankruptcy laws.



The income of an individual under such cases should be less than the average income, as fixed under chapter 7. The cases under this chapter almost fully warrants writing off the debt but still one have to arrange payment for student loans, fraudulently acquired debts, alimony, child support etc. Under chapter13, after reorganizing the liability of debt, recovery is made from the borrower but over a longer period may be at less interest rate or by reducing the monthly payments. But no such provision exists to get rid of the liability without repaying the debt.

In US, Bankruptcy is covered under uniform federal laws and fall under chapter 7,9,11,12,13 of bankruptcy code. The bankruptcy law covers various chapters on all issues and state how to deal and decide cases effectively. Chapter 7 applies to debtor with no assets to repay. Chapter 9 applies government municipalities. Chapter 11 applies to owner or shareholders of companies. Chapter 12 applies to farmers and fishermen, chapter 13 to wage earner bankruptcy, to self employed and salaried individuals or family.

New York bankruptcy courts in general decide most of the cases under chapter 13 and some genuine and really deserving under chapter7. Business bankruptcy relates to bankruptcy on account of business failure due to varied reasons and can be filed by a company or a corporate declaring that the company has fully exhausted their resources and in no way is in a position to repay their liabilities but wish to continue their business activities. After thoroughly checking their financial standing, such cases are dealt under chapter11, petitioner being the owner or shareholder of the company.

California bankruptcy laws in general prohibit filing bankruptcy under chapter 7 and in fact most of the cases are filed under chapter13, thus enabling to recover debts as much as possible by spreading the recovery to longer periods after reorganizing the loan liability by realizing minimum amount due. Though some cases which are really genuine, are filed under chapter7, like people having suffered physical deformity, unemployment, serious sickness involving heavy expenditure.