Chapter 7 Bankruptcy in New York: What You Need to Know (2025 Guide)

Chapter 7 Bankruptcy in New York: What You Need to Know (2025 Guide)

If you’re overwhelmed by debt, constantly dodging collection calls, or facing wage garnishment, Chapter 7 bankruptcy may be the solution you need to reset your financial life. In this guide, we’ll explain how Chapter 7 works in New York, who qualifies, what property you can keep, and what to watch out for in 2025.

⚖️ What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy—often called “liquidation bankruptcy”—allows individuals to wipe out most unsecured debts like credit cards, medical bills, and personal loans in as little as 4 to 6 months. It’s fast, effective, and for many people, it’s the clean slate they’ve been searching for.

Once your case is filed, you’re immediately protected by the automatic stay, which stops all collection efforts, lawsuits, repossessions, and wage garnishments.

✅ Who Qualifies for Chapter 7?

To file for Chapter 7, you must generally:

  • Earn less than the median income for your household size or
  • Pass the Means Test if your income is above the median

Other factors that affect eligibility include previous bankruptcy filings and signs of fraud or abuse. Mistakes on the Means Test can lead to case dismissal, so accuracy is critical.

🔐 Will I Lose My Property?

This is the #1 concern for most people considering Chapter 7.

Fortunately, most Chapter 7 cases in New York are “no-asset cases,” meaning clients keep everything. Why? Because the law allows you to protect essential property through bankruptcy exemptions.

In 2025, New York allows you to protect:

With proper planning, you can eliminate your debt and keep your assets.

📉 What Debts Are Discharged?

Chapter 7 will eliminate most unsecured debts, including:

  • Credit card debt
  • Medical bills
  • Personal loans
  • Old utility bills
  • Past-due rent (in most cases)

Exceptions: Student loans, child support, most recent tax debt, and court fines usually cannot be discharged—though there are some exceptions in specific cases.

⚠️ Common Pitfalls to Avoid

  • Waiting too long and risking wage garnishment or repossession
  • Transferring assets before filing (which can be viewed as fraud)
  • Using unlicensed “petition preparers” who don’t give legal advice
  • Failing to disclose all income or debts

Tip: Always consult with a qualified bankruptcy attorney before filing to avoid mistakes that could cost you your discharge—or your assets.

🗽 Serving New Yorkers with Dignity and Experience

At the Law Office of William Waldner, we’ve helped hundreds of clients file successful Chapter 7 cases in Manhattan, Bronx, Brooklyn, White Plains, and throughout New York City. We’ll guide you through every step—from gathering documents to getting your discharge.

📞 Take the First Step Toward Relief

If you’re ready to stop the financial bleeding and take back control, schedule your free consultation today. We’ll help you determine whether Chapter 7 is right for you and how to make the most of your fresh start.

Stop stressing. Start fresh—with a bankruptcy lawyer who knows New York.

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