Chapter 7 bankruptcy, also known as Liquidation bankruptcy, is a form of debt relief by which you can eliminate most forms of unsecured debt. Types of unsecured debt include credit cards, medical bills and personal loans.
Once a Chapter 7 bankruptcy petition is filed, an Automatic Stay will immediately take effect. The Automatic Stay protects you from creditors, collection agencies, and attorneys who are attempting to collect money allegedly owed to them.
After you submit a Chapter 7 bankruptcy petition, you will be assigned a Trustee who will be in charge of administering your case. Your Trustee will review your files and determine if you own any non-exempt assets that can be liquidated to help pay off your creditors. PLEASE do not let this be a matter of concern for you; in most cases homes, cars, tools of your trade, wedding rings, household appliances, clothing items, etc. are exempt from liquidation. In addition, New York has very liberal exemption laws which will allow you to keep most, if not all, of your assets. Once the Trustee determines whether or not any assets are to be liquidated, the rest of your unsecured debts will be discharged. Please note however, that some forms of debt cannot be discharged (please visit our Bankruptcy Q & A page for further clarification of this matter).
Although a Chapter 7 bankruptcy record will stay on most credit reports between 7 and 10 years the burden of immense financial debt will be lifted. In fact, because one aspect of your credit number is dependent on your debt-to-income ratio, your credit will immediately begin to improve once your Chapter 7 bankruptcy petition is finalized. Some filers fear that filing for bankruptcy will have a negative impact on their ability to have credit extended to them in the future. Most individuals who have filed for Chapter 7 bankruptcy have received offers for credit within a year, and many have been able to successfully apply for mortgages within 1-2 years.
It is our passion to bring relief and hope to our clients. At Berger, Fischoff & Shumer, LLP, our attorneys will help you achieve a fresh start in which you can rebuild your credit, set your financial priorities, save money, and create a strong foundation for your financial future. Please call us today for a free consultation so we can start providing you with the help you need.
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