In this weekly column Mark Schneider and Daniel Cuppett, the lawyers from the Law Office of Mark Schneider, answer legal questions sent in by readers of the Clinton County Free Trader Today and the North Countryman. Q: I cant afford to pay my credit card bills. Can I file for bankruptcy? A: Bankruptcy is a federal law to protect debtors who do not have sufficient income and assets to pay their debts. There are two sections of the Bankruptcy Code that apply generally to individuals Chapter 7 (Liquidation) and Chapter 13 (wage earner plan). There is also Chapter 12 for farmers. In 2005, at the request of credit card companies, Congress made it harder to file for bankruptcy. If a person or family earns more than the median income in New York for a family of their size, there is a presumption they can afford to pay back their debts. These amounts are: one person $41,554; two people $50,367; three people $60,850; four people $72,170; and five people $78,470. If you and your family earn less than the median amount for a family of your size, you are probably a good candidate for Chapter 7 bankruptcy. If you earn more than these amounts, bankruptcy may be possible, but more difficult. Also, under the new law, you have to wait eight years after filing a previous bankruptcy to file again. In Chapter 7, the "Trustee," the person who works for the Bankruptcy Court and represents your unsecured creditors, becomes the owner of your non-exempt assets. The Trustee will then distribute these assets to your creditors. Most people who file for Chapter 7 bankruptcy do not have any non-exempt assets, though. Clothing and furniture are exempt. Retirement accounts and insurance policies are exempt. The equity of your house, up to $50,000 for a single person and $100,000 for a married couple is exempt. The equity in a motor vehicle, up to $2,400 per person, is exempt. Equity is the market value of the property, minus the amount you still owe on it. Also, it is possible under certain circumstances to exempt up to $5,000 in bank deposits if no homestead exemption is claimed. A debtor in Chapter 7 bankruptcy can keep their home and their vehicles if they are paid up to date on their loans. A debtor in Chapter 13 (wage earners plan) can keep their home even if they are behind in payments if they can make their current mortgage payments and can get caught up in five years. Filing bankruptcy stops all lawsuits and collection attempts by the automatic stay. It is illegal for a creditor to violate the automatic stay without permission of the bankruptcy court. At the end of bankruptcy, your covered debts are discharged that means you no longer owe them. Certain debts, such as most taxes and student loans are not dischargeable in bankruptcy. Our office only does Chapter 7 bankruptcy for people who earn less than the median incomes shown above. Also, we do not do Chapter 13. For more information about bankruptcy, you can contact us or check the local phone book for other bankruptcy lawyers. Pursuant to the new bankruptcy law, we have to tell you: We are a debt relief agency. We help people file for relief under the Bankruptcy Code. The information provided in Law Talk is meant to be for informational purposes only and is not meant to be legal advice because each situation must be discussed and analyzed by an attorney after reviewing all of the facts. Because the information provided is general and the law often contains exceptions and differences for unique situations, readers should always discuss their situation in detail with a local licensed attorney. If you have a question, e-mail it to email@example.com, mail it to The Law Office of Mark Schneider, 57 Court St., Plattsburgh, N.Y. 12901, or fax it to 566-6667. When submitting a question, include your name and phone number, which will be used for contact purposes only, and not for publication. Due to the potential high volume of questions received, not all questions will necessarily be printed in this column. If you have a legal problem, consult a local attorney immediately in order to understand and preserve your rights.