Chapter 7 Bankruptcy Lawyer in New York City
Helping You Regain Financial Control in New York
Chapter 7 bankruptcy is the most common type of bankruptcy filing for individuals in the U.S. Called the liquidation or straight bankruptcy, it generally wipes out most or all of your unsecured debt, such as credit cards, department store cards, medical and dental bills, payday or personal loans, and backlogged utility bills. It wipes out these types of debts without having to repay them over any type of long-term plan, such as in a Chapter 13 filing.
If you are deluged in debt and need a solution, a Chapter 7 filing may be the right answer for you. It is fast, efficient, and leaves you with a clean slate and in a renewed position of financial control. To better understand how it works and your options for debt relief, it is strongly advised that you consult with an experienced attorney. At Vilella Law, we have been providing legal assistance to individuals facing insolvency for over a decade. We understand the stress and insecurity of hitting a financial brick wall and how devastating it can be to your personal and work life. By engaging with our New York City Chapter 7 bankruptcy attorney, you could find yourself on the other side of that wall in a matter of months facing a brighter future.
How Does a Chapter 7 Bankruptcy Work?
In a Chapter 7, the assets you own that are subject to the process (called nonexempt assets) are sold off to repay your creditors. This liquidation is done by the trustee assigned to your case through the bankruptcy court. Once this process occurs, whatever unsecured debt is remaining will be discharged, meaning you will no longer be responsible for it. If you have no nonexempt assets, your creditors will receive nothing. Some debts, however, cannot be eliminated through a Chapter 7. These include student loans, alimony or child support arrears, tax obligations, and personal injury or wrongful death damages.
Certain assets and property are exempt from the bankruptcy process. Both the state and the federal government offer exemptions. However, you will have to choose which system works best for you. In New York, exemptions include equity in your home, equity in your vehicle, personal belongings such as household goods, clothes, appliances, jewelry, and more, a certain amount of deposits in the bank, wages, income, public benefits, pensions, and more.
Once you file for Chapter 7 bankruptcy relief, the court will issue an “automatic stay,” which prohibits all collection attempts and legal actions by your creditors and collection agencies. These parties can only go through the bankruptcy court in an effort to collect.
In order to take advantage of a Chapter 7 bankruptcy filing, you must be eligible. This is done through what is called a “means test.” If your monthly income is less than that of the median income for a household of your size in your state, you automatically qualify. If it is not, you must then proceed to the second step of the test where you will deduct your monthly bills or expenses from your income to determine what, if anything, is left over that can be used to pay your debts. This is called “disposable” income. If you have little or no disposable income after expenses, you will qualify. Those with a disposable income that is too high to be eligible should then consider filing a Chapter 13 bankruptcy.
Like many things in life, a Chapter 7 bankruptcy has both pros and cons. You can discuss these with our attorneys to determine if the benefits outweigh the disadvantages for you and how to get started with regaining financial health.
Reach out to us at (212) 577-9328 to get the experienced legal assistance you need today.
“They listened, advocated, and kept me informed through every step of my case. I am very pleased with the quality, sensitivity, and broad legal expertise of Vilella Law. I could not be more satisfied with their services.”- Demetris T.