Chapter 7 Bankruptcy Overview

Getting a Fresh Start

Filing for Chapter 7 bankruptcy helps you move past your financial turmoil for a fresh start.  A Chapter 7 bankruptcy permanently relieves a person from the burden of having to pay for dischargeable debts such as:
  • Credit Card Balances
  • Bank Loans
  • Court Judgments
  • Medical Bills
Chapter 7 does not remove all debts and there are non-dischargeable debts that still must be paid, including:
  • Certain tax debt
  • Most student loans
  • Government fines
  • Child and spousal support
  • Debts incurred from criminal or fraudulent activity
Liquidation of Debtor's Assets
Filing a Chapter 7 bankruptcy petition will typically result in the liquidation of the debtor's non-exempt assets. The bankruptcy trustee will evaluate and sell off the debtor's non-exempt assets, with the proceeds of the sale being used to pay off creditors.

A Chapter 7 bankruptcy debtor is able to retain all property that may be exempt under the bankruptcy code. Examples of exempt property under the bankruptcy code include:
  • Cash, U.S. savings bonds and tax refunds up to $2,500 per debtor
  • Household furniture
  • All wearing apparel
  • Certain appliances and household goods
  • Equity in a motor vehicle up to $2,400 ($4,800.00 for spouses filing jointly)
  • Equity in a house, condo, or co-op up to $50,000.00 ($100,000.00 for spouses filing jointly)
  • Most pensions and retirement plans
  • More on Exempt Property in New York

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