Chapter 7 Bankruptcy Overview

Assess Property and Decide about Secured Debt

When a person files for Chapter 7 Bankruptcy, the bankruptcy court has jurisdiction over almost all of the property that the debtor owns and possesses.  In exchange for discharging some debts, the bankruptcy court may sell the debtor's non-exempt property to pay creditors.

Non-exempt property typically includes cameras, stamp collections, family heirlooms, cash, bank accounts, and stocks. Exempt property, or property that is not used to satisfy creditors, usually includes a certain amount of equity in a home, necessary clothing, tools for a trade or profession, public benefits, and household furnishings. Click here for the List of Exempt Property in a New York State Bankruptcy.

Decide Whether to Reaffirm, Redeem, or Surrender Secured Debt

A secured debt is a debt secured by collateral that a creditor has the right to take if the debtor does not pay the debt.  In bankruptcy, you can choose to reaffirm, redeem, or surrender the property. If you reaffirm the debt, you can keep the property by entering into a new agreement with the creditor to repay the debt. A redemption is when you pay the creditor the current value of the property.  Or you may surrender the property by giving it back to the creditor.

Contact Attorney Sherwood to work with you to determine the best option for you and your property.

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