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The most common form of bankruptcy is Chapter 7 bankruptcy, also called liquidation bankruptcy. It is among the most efficient ways of getting rid of unsecured debts, and you won’t need a debtor to file a repayment plan as you would in other types of bankruptcies.
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If you wish to understand what type of bankruptcy is best situated for your circumstances, or if you want to learn more about the pros and cons of Chapter 7 bankruptcy, you should contact a Chapter 7 bankruptcy lawyer in Long Island.
They can help you with filling out the forms or understand what is needed to become eligible. Let’s see exactly how Chapter 7 bankruptcy works in New York.
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Understanding Chapter 7, Bankruptcy in New York
When you file a Chapter 7 bankruptcy in New York, all your debts will remain at a standstill since the court will prevent any debt collection or enforcement attempts. Creditors are forbidden to foreclose your home or evict you from your apartment, impose wage garnishments, collect payments, or turn off your utilities.
However, the court will appoint a bankruptcy trustee to check if any of your assets can be collected by the creditors. They will initiate a meeting with your creditors and ask you questions about your assets or liabilities.
Based on the trustee’s evaluation of your assets, a part of or all your non-exempt assets will be sold off to pay your creditors, or at least, to partially pay them off. You might have fully exempt assets, which are disregarded assets that aren’t considered when paying off your debts.
However, a Chapter 7 bankruptcy lawyer can help you truly determine what assets are exempt under New York state and federal bankruptcy law and help you pay off your debts faster.
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Chapter 7 Bankruptcy Timeframe
In most situations, a Chapter 7 bankruptcy process takes around three months once it is filled. Your debts are also discharged in this time period as the trustee continues to liquidate your non-exempt assets.
Some debts, such as child support, alimony, student loans, court fees, or other unsecured debts, aren’t discharged through Chapter 7 bankruptcy.
Chapter 7 Bankruptcy Eligibility
To become eligible for Chapter 7 Bankruptcy, you must meet several requirements:
- You have not filed a Chapter 7 bankruptcy filed within the past eight years.
- Income qualifications passed through the means test, which examines a person’s monthly income and determines if it is too high compared to the median household income. Here, your ability to pay off debt is tested.
- If your average income is less or equal to the median income based on the past six months before you filed for bankruptcy, you are eligible for Chapter 7 Bankruptcy.
Tips to Find the Right Chapter 7 Bankruptcy Lawyer
If you are considering filing for Chapter 7 bankruptcy, finding the right bankruptcy lawyer is crucial to ensure a smooth and successful process. Here are some tips on how to find the right Chapter 7 bankruptcy lawyer:
- Look for experience: Choose a lawyer who has experience in Chapter 7 bankruptcy cases. You can ask for referrals from friends, family, or other lawyers, or search online for lawyers in your area who specialize in bankruptcy law.
- Check their credentials: Make sure the lawyer is licensed to practice in your state and has a good reputation. Check their credentials and look for reviews or testimonials from previous clients.
- Schedule a consultation: Schedule a consultation with the lawyer to discuss your case and ask any questions you may have. This will give you an opportunity to assess their communication skills, experience, and expertise.
- Consider the cost: Bankruptcy lawyers typically charge a flat fee or hourly rate for their services. Make sure you understand the fees and any additional costs associated with your case before hiring a lawyer.
- Communication and availability: Choose a lawyer who is responsive and available to answer your questions throughout the bankruptcy process. You should feel comfortable communicating with your lawyer and confident in their ability to represent you.
By following these tips, you can find the right Chapter 7 bankruptcy lawyer to guide you through the process and help you achieve a successful outcome.
Even if your income is above the median, you can still qualify for Chapter 7 bankruptcy if you apply actual expenses appropriately and subtract them from the total sum. A Chapter 7 bankruptcy lawyer can also help you with this, among many other things. Dealing with bankruptcy is hard enough when you are on your own or even with a spouse that you share assets with. You shouldn’t deal with such an important issue without legal advice.