Chapter 7 Bankruptcy
Helping Discharge Debt in Nassau, Suffolk, Kings, and Queens Counties
If you are among the hundreds of thousands of New Yorkers who are unable to meet their debt obligations as a result of today’s changing economy, you are not alone. Individuals and families across the state of New York are struggling to stay afloat in a sea of debt, often incurred as a result of unexpected expenses like hospital bills or a job loss. It can often feel like there are no options.
A Chapter 7 bankruptcy may be a viable debt relief option for you if you do not have significant assets and the majority of your debts are unsecured. A seasoned New York bankruptcy lawyer can help you determine if a Chapter 7 bankruptcy is right for you and your family.
What Is a Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is a type of bankruptcy that allows the court to sell (“liquidate”) your non-exempt assets and use the funds to satisfy as many of your debts as possible. Note that in bankruptcy you are not left penniless. You can keep a certain amount of cash, clothing, value of your car, and home. Once your assets are liquidated, any remaining debt is discharged. This means that at the end of a Chapter 7 bankruptcy, your debts will be dissolved and you will have a clean financial slate on which to start over.
What is the Means Test?
Generally speaking, the means test determines whether your income is low enough to be eligible for a Chapter 7 bankruptcy. Since a significant amount of debt may be discharged at the end of the bankruptcy process, New York does not allow individuals with high income to file for this type of bankruptcy.
Eligibility Criteria for a Chapter 7 Bankruptcy
Unfortunately, not everyone is eligible for a Chapter 7 bankruptcy. There are several criteria that must be met in order for the state of New York to approve a Chapter 7 bankruptcy filing, including passing the means test.
Eligibility for a Chapter 7 bankruptcy is determined by the following questions:
- Is your income lower than the median income for a family of your size in your area? If the answer to this question is “yes,” you may automatically qualify for a Chapter 7 bankruptcy.
- How much disposable income do you have? If your income is higher than the median income for a family of your size in your area, the bankruptcy court will evaluate how much disposable income you have. This is the income you have after critical expenses are paid, like your mortgage and car payment. If your disposable income is low and your debts are high, you may still be approved to file for a Chapter 7 bankruptcy. If your disposable income is high, the court may consider you able to satisfy your debts and you may be required to file for a Chapter 13 bankruptcy.
Contact the IM Law Group Today to Learn More About Chapter 7 Bankruptcy In New York
If you are struggling with meeting your debt obligations, don’t wait to get legal help. By working with an experienced Chapter 7 bankruptcy lawyer, you can increase the chances that you will be approved for this type of bankruptcy and that your assets will be protected from liquidation.
Contact the IM Law Group for a consultation today to learn more about how bankruptcy may be able to provide you and your family with financial relief by calling (516) 344-8010.
We serve clients in the following New York counties:
- Kings County
- Queens County
- Suffolk County
- Nassau County