How to file Chapter 7 Bankruptcy
People who live or have a business or property in the United States can file for Chapter 7 bankruptcy in a federal court. Chapter 7 is straight
bankruptcy or liquidation.
Some property can be exempt from chapter 7. Most liens including real estate mortgages and security interests for car loans survive. Other assets, if
any, are sold or liquidated by the U.S. trustee to repay creditors. Many types of unsecured debt are legally discharged by the bankruptcy proceeding,
but there are various types of debt that are not discharged in a Chapter 7. Common exceptions to discharge include child support, spousal support, ,
divorce settlements, income taxes less than 3 years old and property taxes, student loans and court fines.
A chapter 7 bankruptcy stays on your credit report for 10 years. While in some cases this may make credit less available, high debt can have the same
effect, and in some cases, a person's credit score may even rise after declaring bankruptcy, which removes debt. Future ability to borrow may
therefore be improved, harmed or remain the same.
Like other bankruptcy chapters, it is not available to individuals who have had bankruptcy cases dismissed within the prior 180 days under specified
Another reason why a person's Chapter 7 bankruptcy application may be denied is if it is determined that the debtor's bankruptcy filing is abusive
because the person is thought to be able to pay off the debt.
The U.S. Trustee can prevail in a challenge to the debtor's Chapter 7 filing by proving that the debtor can otherwise afford to repay some or all of his
debts out of disposable income in the five year time frame provided by Chapter 13.
It is generally believed by most New York bankruptcy lawyers that the U.S. Trustee has become much more aggressive in pursuing abusive
bankruptcy filings. As a result, changes were made in recent years that require a means test, credit counseling and other requirements before
bankruptcy can be filed and approved.
Though bankruptcy law is the same across the United States, each bankruptcy court has its own rules to some degree. In New York City, there are
two Bankruptcy Courts: the Eastern District and the Southern District.
The Eastern District covers Brooklyn, Queens, Staten Island, as well as parts of Long Island.
The Southern District covers Manhattan, Bronx, Westchester, as well as parts of upstate New York and Long Island.
Thus, if a Queens bankruptcy lawyer was filing a case for a client in Queens, he would do so in Brooklyn-based Eastern District court.
If you decide to hire a bankruptcy attorney, and you should, you will need to bring the following documents to your bankruptcy lawyer: taxes, pay
stubs, automobile and real estate titles, real estate appraisals, mortgages, deeds, leases, divorce agreements, child support orders, financing and
security agreements, credit reports.
As noted earlier, it is always strongly recommended that you retain the services of an experienced bankruptcy lawyer. Chapter 7 bankruptcy, in
particular after the recent changes, is a very complicated and long process. Always consult an attorney before acting on any advice.
About the Author
The author Todd Spodek is a New York Criminal Lawyer