The merits and demerits of New York Bankruptcy law.

On account of strict federal laws, New York bankruptcy laws have considerably checked filing of bankruptcy cases. It is now mandatory for an individual to provide all the paperworks or proofs to convince the authorities that he is devoid of any kind of assets through which he can pay back his debts. If the authorities are satisfied, then only can any individual go ahead and file for bankruptcy, by proving effectively that it is the only way left for him to stop paying interest on his debts. Documentation for the same is required, which validates the claim, and therefore, the scams that used to happen in the name of bankruptcy have gone down considerably in the past few years. Only when an individual is earning less than the average income of the general population, as fixed under chapter 7 of New York bankruptcy law, can he file for bankruptcy. One has to arrange payment for student loans, alimony, fraudulently acquired debts, child support, etc., though the cases under this chapter almost fully guarantees writing off the debt. Under chapter 13 the rules differ, where recovery is made from the borrower after reorganizing the liability of the debt. But this is done over a longer time period, involving a less interest rate and also the reduction of the monthly payments. But whatever the case might be, there is no way out but to repay the debt. rnIn the US, under chapters 7,9,11,12,13 of the bankruptcy code, bankruptcy is covered under uniform federal laws. The New York bankruptcy law covers all the issues that might lead a person to file for bankruptcy, and covers all the issues. It also guides as to how to deal with and decide the cases in an effective manner. When the case is of a debtor who has absolutely no assets through which he can repay, chapter 7 applies to that particular situation. For an owner or shareholders of companies, there is chapter 11. For farmers and fishermen, there is chapter 12 and chapter 13 is for regular wage earners, families, self employed people and salaried individuals. rnIt is the courts of law that decides which case should fall under which category and if the case is genuine at all. Bankruptcy on account of business failure due to varied reasons is known as business bankruptcy, which can be filed by a corporation or a company announcing that the company has fully fatigued their resources and is not in a position to pay back their liabilities but at the same time, wish to maintain their business. These cases generally fall under chapter 11 of New York bankruptcy law, and such cases are dealt with only after scrutinizing every aspect of the financial status of the company. Thus, The .New York bankruptcy law makes it sure that only the genuine and true cases are handled and helped though the state fund, and no scams happen, because previously people used to use the bankruptcy for their own vested interest rather than the actual reason of being bankrupt. It is a measure that a person can take to again stand up financially and restart his or her life.