Chapter 7 Bankruptcy Attorney in New York

Helping Clients File for Chapter 7 Bankruptcy

Chapter 7 bankruptcy allows individuals and businesses to discharge most unsecured debts. This process is often called liquidation bankruptcy because most assets go to pay creditors. However, most people retain their property, as many qualify for the exempt property allowance.

Many refer to Chapter 7 bankruptcy as liquidation bankruptcy because a court-appointed trustee may sell certain assets to pay creditors. In practice, most New Yorkers filing for Chapter 7 keep their homes, vehicles, and other exempt assets under New York exemption laws.

Choosing to file for Chapter 7 bankruptcy in New York involves understanding your financial situation and the unique aspects of state law. New York offers both federal and state exemption systems, allowing filers to choose the set of exemptions that best protects their property. Residents often benefit from exemptions for homesteads, retirement accounts, and personal belongings, which can help families keep vital assets. As bankruptcy attorneys familiar with the local courts and procedures, we guide clients through each step, from preparing petitions to representing their interests at meetings of creditors in New York's federal bankruptcy courts.

To discuss your case with an experienced New York Chapter 7 bankruptcy attorney, contact IX Legal at (646) 760-3456.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy allows individuals and businesses to discharge most unsecured debts. The process is often called liquidation bankruptcy, as the trustee may sell non-exempt property to pay creditors. For most applicants, New York’s exemptions mean you keep much or all of your property through the bankruptcy.

This form of bankruptcy provides rapid relief for those who cannot keep up with overwhelming unsecured debts such as credit cards or medical bills. The process generally takes about three to six months in New York, thanks to the efficient local court system. After filing, an automatic stay goes into effect, which immediately stops most collection actions, wage garnishments, and lawsuits. This pause can give filers valuable breathing room to assess their next steps and rebuild their finances. The end result of a successful Chapter 7 case is a discharge order from the bankruptcy court, which releases you from the legal obligation to pay designated debts.

New York residents file their cases in either the Southern or Eastern District Bankruptcy Court, depending on their county of residence. Each district maintains its own local procedures, but both follow the basic federal guidelines established under the U.S. Bankruptcy Code. With support from a local attorney, clients can navigate the required documentation, court appearances, and trustee meetings with greater confidence.

Chapter 7 Eligibility

To file for Chapter 7 bankruptcy, you must pass the means test, which calculates your income and expenses. If your income is below New York’s median, you automatically pass. If your income is above the median, you must complete a full means test to see if you qualify for Chapter 7 bankruptcy in New York.

For many applicants, the means test can be complex. It involves reviewing your average income from the past six months and comparing it to the median for households of the same size in New York. The statewide median income figures are updated regularly, so you must use the most current numbers when calculating eligibility. Deductible expenses—like housing costs, taxes, and healthcare—are all factored in to determine your disposable income. Even if your income is higher than the median, allowable deductions sometimes make it possible to qualify.

Beyond the means test, some filers are ineligible for Chapter 7 if they obtained a bankruptcy discharge in the past eight years or have had a recent case dismissed for specific legal reasons. Consulting with a bankruptcy attorney in New York helps clarify your unique situation and determine if you meet all qualifications under both state and federal law.

If you pass the means test, you can discharge most unsecured debts, such as medical bills, credit card balances, personal loans, and unpaid utility charges. If you do not qualify under the means test, you may need to file for Chapter 13 bankruptcy, which involves a repayment plan over time.

What Are the Advantages of Chapter 7 Bankruptcy?

Chapter 7 bankruptcy offers several benefits, including:

• Discharge of most unsecured debts, such as credit card balances, personal loans, and medical bills.
• No monthly payments to creditors after the case concludes.
• Foreclosure proceedings on your home or property stop upon filing.
• Ability to keep exempt assets, including your home, vehicle, and personal items under New York exemption laws.
• End to creditor harassment and collection activity.

Qualifying for Chapter 7 can provide New Yorkers with a fresh start and immediate financial relief. New York’s exemption laws are among the most generous in the nation, potentially allowing filers to keep more property than in other states. The automatic stay protects your bank accounts, wages, and utilities from collections, offering stability during the process. For families facing aggressive collection efforts or the threat of foreclosure, relief through Chapter 7 often creates an opportunity to reorganize without the burden of overwhelming debt. In many cases, applicants are surprised to find how much of their property they can protect through strategic planning with a knowledgeable bankruptcy lawyer.

Chapter 7 bankruptcy can provide a clear path to resolve overwhelming debt without the obligation of monthly repayment plans. Filing may allow you to reset your financial life. If you are struggling with significant debt, IX Legal can help review your eligibility for Chapter 7 bankruptcy and guide you through each step.

The Chapter 7 Bankruptcy Process: Step-by-Step

Filing for Chapter 7 in New York follows a well-defined process, and knowing each step helps you approach it with confidence. First, you must attend a court-approved credit counseling session within 180 days before submitting your petition. After gathering required documents—like recent tax returns, a list of creditors and assets, and proof of income—you file your petition with the federal bankruptcy court in your district (Southern or Eastern, depending on your county).

Once filed, an automatic stay halts most collection actions, including foreclosures and wage garnishments. The court appoints a trustee who reviews your assets, financial disclosures, and supporting paperwork. You attend the “341 meeting of creditors,” where the trustee and any creditors can ask questions regarding your finances. Most filers do not lose their home or car due to New York’s generous exemptions, but the trustee may identify non-exempt property for liquidation, if any.

A Chapter 7 bankruptcy lawyer in New York  from IX Legal can help clients understand state-specific nuances, like how choosing between state and federal exemptions impacts your protection. Once the trustee and court are satisfied, the process moves efficiently toward discharge—usually in several months. At the conclusion, you receive a discharge order that eliminates qualifying debts and allows you to move forward financially. Every stage follows established New York and federal procedures, so working with a legal team familiar with local courts and rules can help you avoid delays and confusion.

Understanding New York Bankruptcy Exemptions

New York law grants filers the choice between the state and federal exemption systems, offering flexibility in protecting assets. State exemptions allow you to protect a substantial amount of your home’s equity, in some cases up to several hundred thousand dollars, depending on your county. These homestead exemptions mean many homeowners can keep their primary residence through the process. New York also provides personal property exemptions covering household items, clothing, certain vehicles, and retirement accounts—all critical for daily life and financial recovery.

If you are married and filing jointly, you may be able to double the exemption amounts for some asset classes, which can be particularly significant when protecting a family home. New York’s “wildcard” exemption can be applied to cash, bank balances, or any property not fully covered by other exemptions. The right strategy involves evaluating both federal and state options to select the combination most favorable to your unique situation. We review your asset structure and advise on how best to maintain what matters most to you.

Residency length in New York matters for exemption eligibility. You typically must have lived in the state for at least 730 days before filing to claim the state exemption system. We discuss your history during the planning phase to ensure you receive the full protection the law allows. These rules, along with exemption values that change by county, make local legal knowledge especially important when seeking debt relief in New York.

Reach out to a Chapter 7 bankruptcy lawyer in New York you can trust. Call (646) 760-3456 or contact us promptly to schedule your consultation.

Frequently Asked Questions

How Long Does the Chapter 7 Bankruptcy Process Take?

Most Chapter 7 cases in New York are completed within three to six months from the date your petition is filed. Delays can occur if additional documentation is needed or complex issues arise with your assets, but the timeline is usually predictable and straightforward.

Will Filing for Chapter 7 Wipe Out All My Debt?

Chapter 7 bankruptcy discharges many unsecured debts, such as credit cards and medical bills. However, it does not eliminate certain debts like most student loans, recent taxes, child support, or court-ordered fines. You must continue to pay these obligations after your case.

Do I Need to Go to Court if I File for Chapter 7 Bankruptcy?

Most filers do not have to appear before a judge. You must attend a meeting of creditors (the 341 meeting), which is typically held at a local federal courthouse or via virtual session, where the trustee may ask questions about your finances. For most New York residents, this is the only formal meeting required.

Our knowledgeable Chapter 7 bankruptcy attorney in New York is prepared to guide you. Call (646) 760-3456 to book your initial consultation without delay.