Am I A Good Candidate For Chapter 7?
Dedicated Queens Chapter 7 bankruptcy attorney assists throughout the process
If you are considering filing for bankruptcy, the chances are you have already exhausted other options for trying to improve your financial circumstances. Mark E. Cohen, Esq. in Forest Hills is a Queens Chapter 7 bankruptcy attorney with more than 30 years of experience helping New Yorkers take strategic action for debt relief. At every stage of the Chapter 7 process, I provide thoughtful advice addressed to both the short-term and long-range interests of my clients.
Why consider Chapter 7 in New York?
If you are overcome with debt and you do not believe you can regain financial solvency in the foreseeable future, Chapter 7 bankruptcy may be a viable option. It can help you obtain forgiveness of a large portion of your debt and get a fresh start. As a Queens Chapter 7 bankruptcy attorney, I can determine if this remedy is right for you and can help you pursue it.
How Chapter 7 works
Chapter 7 bankruptcy is known as liquidation, because some of a debtor’s assets may be sold and the sale proceeds used to pay back creditors. When filing for Chapter 7, a person must provide the bankruptcy court with a comprehensive accounting of his or her finances, expenses and debts. An automatic stay is granted upon filing, preventing creditors from pursuing debt collection efforts. A trustee is assigned to administer the case, which includes overseeing the liquidation of estate assets. Certain debts that cannot be repaid through liquidated assets may be discharged. Once a debt is discharged, a creditor cannot try to collect repayment.
How to prove you are a good candidate for Chapter 7
A Chapter 7 bankruptcy may be right for you if you have substantial debt for which creditors are seeking repayment and you do not own much property. To qualify for Chapter 7, you must pass the means test, which establishes that you do not have enough financial resources to repay your debts. You pass the means test if your income is less than the New York median income for a household of your size or if your disposable monthly income is not enough to cover your monthly expenses plus debt.
Who is not a good candidate for Chapter 7?
If you have significant income or assets that are too high for you to pass the means test, you are ineligible for Chapter 7 and you may have to pursue another option, such as a Chapter 13 debt repayment plan. You also will not be able to file for Chapter 7 if a court dismissed one of your previous bankruptcy petitions within the past 180 days due to your violation of a court order, alleged fraud or alleged abuse of the bankruptcy system. If you sought a previous bankruptcy dismissal after one of your creditors asked to bypass the automatic stay, a new bankruptcy petition will not be an option.
Will Chapter 7 remove all of my debt?
Not all debt can be discharged through Chapter 7. If a debt is non-dischargeable, the debtor will be required to pay back the creditor. Common non-dischargeable debts include payments owed for:
- Student loans
- Child support or spousal support
- Divorce or separation agreement
- Taxes, fines and other payments owed to the government
- Cash advances made within 60 days before filing
- Purchases of luxury items within 60 days before filing
A Chapter 7 debtor can exempt a limited amount of equity from liquidation. Only certain assets qualify for bankruptcy exemptions. I can help you construct a strategic exemption plan that suits your needs.