Queens Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the legal process that allows debtors to get rid of most of their debts. It is sometimes referred to as "fresh start" or "clean slate" bankruptcy. It is distinguishable from chapter 13 bankruptcy that requires debtor to pay off all or most of their debts pursuant to a repayment plan. Debts that you may be able to wipe out in a chapter 7 bankruptcy include the vast majority of your unsecured debt such as credit card bills, medical bills, and personal loans. However, during the process the bankruptcy trustee may take some of your assets to pay a portion of the debt you owe your creditors. If you are dealing with overwhelming debt and are considering filing for bankruptcy, it is important to immediately contact an experienced Queens Chapter 7 Bankruptcy Lawyer who understands the complexities of chapter 7 and chapter 13 bankruptcy laws and who will help you determine the best option for managing your debt.Can anyone file for chapter 7 bankruptcy?
No. Not everyone who has financial problems is eligible to file for chapter 7 bankruptcy. Bankruptcy law establishes income criteria as one of the eligibility requirements for filing for chapter 7 bankruptcy. Your income must be equal to or below the median income for New York. The median income standard is adjusted each year. If your income is above New York's median income standard, you may still be permitted to file for chapter 7 bankruptcy. However, you must take a "means test" to establish eligibility. The means test is used to determine if you will be able to pay back a portion of your debt through a chapter 13 bankruptcy filing. If you have a certain amount of income leftover every month after paying creditors, you will fail the means test and will not be able to file chapter 7 bankruptcy. However, you still may be able to file for chapter 13 bankruptcy. Experienced bankruptcy counsel will be able to review your income and assets to determine if you meet the chapter 7 bankruptcy eligibility requirements.What is pre-bankruptcy credit counseling?
Before you will be permitted to file for either chapter 7 or chapter 13 bankruptcy, the law requires that you attend credit counseling. This pre-bankruptcy credit counseling must occur within 6 months prior to filing. The counseling session must be with a credit counseling organization approved by the U.S. Trustee Program. The session will include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan.What types of debts are dischargeable?
When filing for chapter 7 bankruptcy you may think that all of your debt will be eliminated, that may not be the case. It depends on what type of debt you have. You will likely be able to discharge the majority of your debt, including:
- Credit card debt
- Revolving charge accounts
- Medical bills
- Personal loans
- Past due utility bills
- Civil judgments, unless based on fraud
- Money owed under lease agreements such as past due rent
- Auto accident claims, except those involving drunk driving
Examples of debts which are not dischargeable include:
- Child support or spousal support
- Student loans
- Debts not listed on the bankruptcy petition
- Certain taxes
- Court fines and penalties, including criminal restitution
- Homeowners association fees
- Debts to government agencies for fines and penalties
- Auto accident claims involving drunk driving
The bankruptcy trustee will review your property to determine if any of it is "nonexempt." Exempt property is property that a bankruptcy trustee cannot seize and use to satisfy you debts. For example, under New York Civil Practice Law and Rules section 5206 exempt property includes your house, condominium, co-op, or mobile home that you use as your residence up to a maximum value based on the county in which the property is located. On the other hand, nonexempt property can be seized. Examples of nonexempt property include a vacation home or a second vehicle.
If you are having a hard time keeping up with payments to your creditors, chapter 7 bankruptcy may be an option to consider. However, there are other debt relief options such as debt consolidation and debt settlement. The staff at Stephen Bilkis & Associates, PLLC has extensive experience helping clients eliminate secured and unsecured debt, responding to creditors' claims, filing for chapter 7 and chapter 13 bankruptcy, avoiding foreclosure and dealing with out issues related to debt relief. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your debt issues.