Chapter 7: Liquidation of Personal Assets

Residents of New York who find themselves unable to pay their credit card bills and other debts may be able to turn to Chapter 7 bankruptcy to legally discharge their financial debts and “wipe the slate clean.” Chapter 7 is the most common form of personal bankruptcy among Americans. There are, however, very serious and long-reaching consequences of filing for Chapter 7 personal bankruptcy.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy involves liquidating a person’s non-exempt assets, converting them to cash and using the money to pay creditors. Many personal assets are exempted from the bankruptcy proceedings and not used to satisfy a person’s debts. At the end of the bankruptcy proceedings, a discharge of debts is issued, signifying that the person who filed for bankruptcy is free from that debt.

Can I file Chapter 7 Bankruptcy?

You may be eligible to file a Chapter 7 bankruptcy as long as you have not filed under Chapter 7 in the past 6 years. Some states may also have residency rules requiring you to reside in that state for a certain period of time before filing for Chapter 7 bankruptcy.

Which Debts Can Be Discharged?

Generally speaking, most debts can be discharged (forgiven) in a personal Chapter 7 bankruptcy. However, there are exceptions. The following types of debts may NOT be discharged:

• Delinquent taxes
• Most student loans
• Spousal and child support orders
• Any debts arising from illegal activities or willful, malicious misconduct by the debtor
• Penalties for injury or death caused while driving while intoxicated
• Any debts deemed non-dischargeable in a prior bankruptcy
• Criminal fines and penalties and forfeitures

Impact on Credit Scores

Perhaps the worst aspect of a Chapter 7 bankruptcy filing is the impact it will have on your credit score. A personal bankruptcy stays on your credit report for up to 10 years, during which time you may have difficulty getting credit cards, car loans and other forms of credit. There are, however, ways to rebuild your credit rating following a personal bankruptcy in an effort to minimize the impact of the event.

Get Chapter 7 Bankruptcy Legal Advice in New York

If your or a loved one is facing Chapter 7 personal bankruptcy, the bankruptcy attorneys at Mark & Associates, P.C., with conveniently located offices serving all of New York, can help. We will fight for you and your family to achieve the best possible legal outcome in your bankruptcy case. Please contact Mark & Associates, P.C. today for a free consultation. Call 1-866-50-RIGHTS (1-866-507-4448) or fill out the form at the right.