Manhattan Chapter 7 Bankruptcy Lawyer

The Chapter 7 process generally takes four to six months. 

To begin the process, you should fill out several forms with information about:

• your property;
• your current income and monthly living expenses;
• your debts;
• exempt property the law allows you to keep;
• property you owned and money you spent during the previous two years; and
• property you sold or gave away during the previous two years.

Exempt property protected by the law that you can keep in a Chapter 7 proceeding includes:

• Some motor vehicles
• Reasonably necessary clothing
• Reasonably necessary household goods and furnishings
• Household appliances
• Jewelry, up to a certain value
• Pensions
• A portion of equity in your home
• Tools of your trade or profession, up to a certain value
• A portion of unpaid but earned wages
• Public benefits accumulated in a bank account, such as public assistance (welfare), Social Security, or unemployment compensation
• Damages awarded for personal injury

Non-exempt property, or property that a debtor usually has to give up for sale, includes:

• Valuable and collectable items like coins and stamps
• Family heirlooms
• Cash, bank accounts, stocks, bonds, or other investments
• Expensive musical instruments (unless the debtor is a professional musician)
• A second car or home (vacation home)

In a Chapter 7 process, you will sell your non-exempt property and use the proceeds to pay back creditors. After the creditors have been paid back from what is available, you will receive a discharge of your remaining debts. 

In general, all your debts will be wiped out by the court, except for debts that:

• automatically survive bankruptcy (child support, most tax debts, student loans), unless the court rules otherwise; and
• the court has declared non-dischargeable because the creditor objected (e.g., debts incurred by your fraudulent acts).

Some Chapter 7 filers end up not losing a lot of property at all, because their property is either mostly exempt or not valuable to creditors. However, others may find the opposite to be true. Nonetheless, if you pass the income “means test” and are interested in a quick bankruptcy process that will discharge your debts by the end, Chapter 7 is the right choice for you.