Filing of Chapter 7 Bankruptcy

New York Chapter 7 Bankruptcy Information

In a Chapter 7 bankruptcy, you can wipe out your debts and receive a "Fresh Start" financially. Chapter 7 bankruptcy is a liquidation where the trustee collects all of your assets and sells any assets which are not exempt. The trustee sells the appropriate assets and pays you the difference. The net proceeds of the liquidation are then disbursed to your creditors with a commission taken by the trustee overseeing the distribution.

Certain debts cannot be discharged in a Chapter 7 bankruptcy filing, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged. Usually, large credit card debt and other unsecured bills coupled with few assets typify a Chapter 7 bankruptcy filer. In the vast majority of cases this type of bankruptcy is able to completely eliminate all of the filer’s debts.

“Exempt property" is property that a debtor is allowed to keep.

You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts. In order to do so, you must sign a voluntary "Reaffirmation Agreement".

However, you cannot clear that debt (discharge the debt) for another six years. In other words, if you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt (or wipe-out) that debt again for six years. You will still owe that debt and you must continue to pay it just as you were to continue to pay it before you filed the bankruptcy. In order to reaffirm the debt, you must also bring it current. In other words, if you are three or four months behind, then you must pay the back payments which are due in order to reaffirm it.

Information that is needed when filing Chapter 7

When filing for Chapter 7, you will need to provide a wide variety of information regarding your financial situation. The following is a non-exhaustive list of some of the things you may need to provide: