How to File for Chapter 7 Bankruptcy in New York

Published On: August 14, 2023Categories: Bankruptcy

Rockland County, NY bankruptcy attorneyImagine a path that allows you to release the weight of most of your debts—a chance for a fresh financial start. Welcome to Chapter 7 bankruptcy, a process that offers relief by discharging a significant portion of your debts.

Meeting the Eligibility Bar

Before beginning a New York Chapter 7 bankruptcy case, you must make sure you meet specific criteria:

  • Be a U.S. citizen or resident

  • Have lived in, kept primary assets, or had a principal place of business in NY for at least 91 days of the past 180 days. If you plan to use state exemptions, it will require a period of no less than two years of living in New York.

  • Pass a means test

  • Not have filed for bankruptcy within the last eight years

You may be able to keep ownership of some key assets when filing under Chapter 7. For single individuals, the exemption amounts include the home ($165,550), car ($4,400), and household goods ($12,625). If an exemption amount has been exceeded, individuals may still be able to file a Chapter 7 with the use of federal exemptions.

Navigating the Filing Process

Filing for Chapter 7 bankruptcy in New York unfolds through these steps:

  • Start by submitting a petition to the bankruptcy court. This document details your income, expenses, assets, and debts. Moreover, you will need a list of your creditors with their contact information.

  • Participate in a creditors’ meeting, where creditors can ask questions about your bankruptcy. Have your supporting documents organized so you can see them easily and answer questions honestly.

  • Upon approval from the bankruptcy court, you will experience debt discharge. However, remember that certain debts like student loans are usually not dischargeable. To discharge a student loan requires proof that repaying the loans would cause the debtor undue hardship.

While costs vary based on your financial situation, there are some things you should consider. Enlisting an attorney’s expertise can be invaluable throughout the Chapter 7 bankruptcy process. They can guide you through the process, help you understand which assets are exempt, and ensure all forms are accurately filled out. You should also anticipate filing fees to be around $338.

Weighing the Pros and Cons

As with any significant financial decision, weigh the pros and cons of Chapter 7 bankruptcy. Pros for filing a Chapter 7 bankruptcy include:

  • Much of your debt will be wiped out, making your finances much easier to manage in the future

  • As debts dissolve, your credit score might improve over time

  • The process helps shield your assets from creditors and offers relief from debt collector harassment

Cons to consider when filing a Chapter 7 bankruptcy include:

  • While the relief is significant, bankruptcy can severely influence your credit score and future financial opportunities. A bankruptcy filing will stay on your credit report for 7 to 10 years and count as a negative mark on your credit. You should expect your credit score to drop by at least 100 points following a bankruptcy filing.

  • A waiting period of eight years is necessary before filing for Chapter 7 bankruptcy again in New York. If your case was dismissed, you must wait 180 days before you can refile again.

Speak to a Rockland County, NY Bankruptcy Attorney

If Chapter 7 bankruptcy in New York is on your radar, seeking advice from experienced legal professionals is important. A well-versed Hudson Valley, New York bankruptcy attorney can navigate the process with you. As your partner, Law Offices of Robert S. Lewis, P.C. is here to analyze your unique situation, guide you through the process, and help you make an informed decision. Dial 845-358-7100 for a free consultation as we explore your options and begin on this path toward financial relief.