Lester and Associates: Bankruptcy Chapter 7, New York

Chapter 7 bankruptcy, also called straight or liquidation bankruptcy, is the most well-known and common type of bankruptcy. In this type of bankruptcy, the trustee cancels many or all of your debts. It’s not right for every situation, but can be a lifesaver for some.

An Overview of the Costs and Time Involved in Chapter 7 Bankruptcy

From the day you file Chapter 7 bankruptcy, it takes about four to six months to complete the process, although the exact length of time depends on your circumstances. To file, you will need to pay $335 in administrative and filing fees, which can often be accomplished with one trip to the courthouse. You must also complete a credit counseling session with an agency that has been approved by the United States Trustee.

Once you file for Chapter 7 bankruptcy, you are technically placing the property you own and the debts you owe in the hands of the bankruptcy court. While this gives you protection from creditors in the form of an automatic stay (meaning you cannot be pursued for these debts while you’re in the legal process), it also limits your abilities to sell or give away any of the property you own or to pay off your pre-filing debts without court approval.

Who is Eligible to File Bankruptcy Under Chapter 7?

If you have received any type of bankruptcy discharge in the previous six to eight years, it is unlikely you will be able to file Chapter 7. You may also be excluded from using Chapter 7 as a vehicle for filing bankruptcy if based on your debt burden, expenses, and income, the bankruptcy court determines you are able to complete a Chapter 13 repayment plan instead.

Many Bankruptcy Forms Must be Filled Out for Chapter 7 Bankruptcy

Filing Chapter 7 bankruptcy entails filling out numerous forms, beginning with a petition, and many additional forms describing your property, your current monthly living expenses, your current income, and your debts. You are also required to disclose any property you are claiming as exempt property (New York allows Chapter 7 filers to keep some home equity, your clothing, your household furnishings, and any Social Security payments you have not yet spent. You may also be allowed to keep your care and any necessary tools for your trade.)

The forms you must complete to file bankruptcy include a listing of property you owned in the past two years, money you spent during the previous two years, and any property you sold or gave away during the same period.

The Automatic Stay

Once you file for Chapter 7 bankruptcy protection, the “automatic stay” is put into effect and immediately stops most creditors from trying to collect what you owe them. This means that, at least temporarily, creditors cannot legally garnish your wages, take your car, empty your bank account, claim your house, or cut off your utility service. If you are stressed and currently considering filing Chapter 7 bankruptcy, you can imagine the measure of relief the stay provides.

The Bankruptcy Trustee

The court exercises its control through a court-appointed bankruptcy trustee, whose main duty is to ensure your creditors are paid as much as possible of what you owe them. The more assets the trustee recovers for the creditors, the more the trustee is paid. The trustee examines your papers and filings to ensure completion and looks for nonexempt property to sell. The trustee also reviews your financial transactions during the previous year and especially in the ninety days prior to filing. He or she has the power to undo certain transactions to free up additional assets for your creditors. However, in many Chapter 7 bankruptcies, there is nothing of value to sell.

Call Lester and Associates

If you are in Long Island and are considering filing for Chapter 7 bankruptcy, but you are not sure it is the right option for you, call the experienced bankruptcy attorneys at Lester and Associates today. We can help you stop the harassing telephone calls and get your life back on track, starting today. Call (516) 357-9191 or fill out our contact form for a no obligation consultation.







Lester & Associates, P.C.

600 Old Country Road, Suite 229,

Garden City, NY 11530

PHONE: (516) 357-9191

FAX: (516) 357-9281

EMAIL: rlester@rlesterlaw.com