Chapter 7 Bankruptcy: Questions and Answers
What is Chapter 7 Bankruptcy?
Chapter 7 is a section of the U.S. Bankruptcy Code that allows someone with a lot of debt to receive discharge (forgiveness) from all of his or her dischargeable debts, and orders the creditors of those dischargeable debts to FOREVER stop their attempts at collecting the discharged debts. Once a debt is discharged, a debtor is forever relieved of the obligation to pay a debt.
What are common examples of dischargeable debt under Chapter 7?
Some common examples of debt that can be discharged under Chapter 7 are consumer debt (credit cards), medical bills and utility bills.
What kinds of debt are NOT dischargeable?
Some examples of debt that cannot be discharged are student loans, child support, alimony, certain taxes, debts incurred as a result of defrauding or misleading a creditor, and any debt not listed in the Chapter 7 bankruptcy petition.
Am I eligible?
In order to file for bankruptcy in New York, you must be a New York resident. Two criteria determine your eligibility as a New York resident to file for Chapter 7 bankruptcy – assets and income.
Assets:
Under New York law, an individual is allowed to protect certain basic assets from their creditors; this is called an exemption or exempt property. So long as the value of your assets do not exceed the statutory limitations, you may claim your property as exempt. For example, so long as your vehicle's Kelly Blue Book ("KBB") value is not over the permitted limit, you will be able to keep your car. However, even if it is worth more than the exemption will allow under the KBB standard, your attorney from Gehi & Associates can request an individualized evaluation of the value of your vehicle (at no cost to you). Most debtors who file with the assistance of Gehi & Associates are able to maintain possession of their personal vehicles.
Income:
Under federal Bankruptcy law, most individuals or couples filing for protection under Chapter 7 must now meet certain eligibility requirements under a "Means Test." The professionals at Gehi & Associates can help you determine if you meet the means test standard. This can be a bit complicated, but in essence you must show that for the six months prior to filing for bankruptcy your average monthly income was below the median income for New York, based on the size of your household. If this is not the case, you may still be able to file under Chapter 7. Otherwise, you may be eligible for Chapter 11 or Chapter 13 Bankruptcy relief. Let the experts at Gehi & Associates walk you through this complex process.
Why do I need a lawyer to file for bankruptcy?
The bankruptcy process can be confusing and overwhelming. It involves complicated intersections of Federal and state law, and many non-attorneys find the court-appointed trustees handling their cases to be intimidating and brusque. While a bankruptcy discharge can bring much-needed relief to your family, the process itself can be very stressful. Let the professionals at Gehi & Associates put your mind at ease.
Okay. I want to see if I qualify for Chapter 7. What is the next step?
Gehi & Associates will be happy to offer you a free bankruptcy consultation. Just call us at
(718) 263- 5999. During your free (strictly confidential) consultation, we will have a conversation in which you tell us about your current situation based on your debts, assets, income and monthly expenses. Then, together we will explore the best path for you, whether it's Chapter 7, Chapter 11 or Chapter 13 Bankruptcy. You will receive patient and comprehensive advice from experts who understand what you are going through. Bad things happen to good people, and it is our job to help you get your finances back on track. Please let us help you.
Questions and Answers
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