One of the most feared aspects of Long Island bankruptcy proceedings is the “341 Meeting” with creditors. This name is derived from the section of the Federal Bankruptcy Code, 11 U.S.C. 341, that requires a meeting to verify your financial information under oath. These meetings are usually scheduled around 30 days after the bankruptcy petition has been filed.

Most consumers approach this meeting with a sense of dread or apprehension, and one of the biggest reasons for that is the fear of confronting the creditors. However, creditors usually do not appear at this meeting (although they have the right to later contest or dispute any information given in their absence.)

If you have doubts about who will be at the meeting or what will occur, your Long Island bankruptcy lawyer can meet with you ahead of time to discuss the potential events that are likely to unfold, and can answer any questions you have in more detail.

Another common fear is the mistaken belief that you will have to appear before a judge. This is incorrect, as 341 Meetings are presided over by a bankruptcy trustee, not a judge. The trustee will oversee the meeting and ensure that responses are formally put on record.Rest assured, your Long Island bankruptcy attorney will look out for your interests, and advise you as necessary throughout the process.

One of the most pleasant surprises petitioners encounter is that 341 Meetings are usually short (sometimes lasting under five minutes!). While it is a momentous event to you, it’s really just a matter of business as usual for the trustee, who can hear upwards of 20 cases an hour if things go smoothly, as well as your experienced Long Island bankruptcy lawyer who will guide you through the day’s proceedings.

Remember – despite your apprehension, you’ve come this far in the process, and the 341 Meeting is just another step along the path towards financial recovery and freedom. By working with an expert Long Island Bankruptcy attorney, you’ll finish the day that much closer to the final outcome – a fresh start towards regaining your financial footing in life.

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Tests. Not only are they a dreaded part of high school, they also play a critical role in determining eligibility for filing Chapter 7 bankruptcy in Long Island.

Chapter 7 – also known as liquidation bankruptcy – is used for those consumers who have few assets and/or limited means to meet their financial obligations.

Many people mistakenly believe that if they own a valuable asset (such as a home), that they are disqualified from filing Chapter 7. Conversely, some people may think that because they have what they deem to be little disposable income left over at the end of the month, they’re automatically eligible to file for Chapter 7 bankruptcy in Long Island.

There is no hard, fast rule that denies homeowners the right to file for Chapter 7 bankruptcy in Long Island (nor conversely automatically grants those with limited discretionary income protections under Chapter 7 either.)

Instead, the Bankruptcy Court relies on what is known as the Means Test – a formula that takes numerous factors into consideration and then calculates whether a debtor qualifies to file for a Chapter 7 bankruptcy in Long Island.

A Means to an End: Your State’s Median Income

The first step to getting started in implementing the Means Test is to determine whether your income is above or below your state’s median income. In NYC, for example, if you are below the state median then you automatically qualify to file Chapter 7 bankruptcy in Long Island.

If you are above your state’s median, then you’ll need to complete the Means Test in its entirety. The Means Test is merely a formula that deducts certain monthly expenses from your current average monthly income to determine your final official level of disposable income.

Why Use the Means Test?

The purpose of the Means Test is to delineate those who earnestly cannot pay their debts, from those who have some means to do so. Many people want to file a Chapter 7 bankruptcy in Long Island, believing that it will erase all of their debts. While this can sometimes be the case, there are also many instances where this is not so.

Furthermore, for those with assets such as a home, Chapter 7 may not be the right solution for you. Only by working with a competent attorney who handles Chapter 7 bankruptcy in Long Island will you be able to determine which filing is right for you.