Chapter 7 Bankruptcy

A Chapter 7 filing relieves a person from having to pay for most unsecured debts, such as credit card balances, medical bills, and court judgments.

• Cash, U.S. savings bonds and tax refunds up to $13,900 (exemptions double if filing jointly)
• Household furniture up to $13,400
• All wearing apparel up to $13,400
• Appliances and household goods up to $13,400
• Equity in a motor vehicle up to $4,000
• Equity in a house, condo, or co-op up to $170,825.00 ($341,650.00 for spouses filing jointly)
• Most pensions and retirement plans

There are several more exemptions in New York and some valuables can be exempted using multiple exemptions, increasing the amount of protection.  One example would be a married couple filing jointly could potentially protect $32,800 of equity in a car.  Just because something is not completely protected does not mean that you will lose it.  You can often buy items back from a trustee and in many cases a trustee will abandon items that are not worth selling.

Additional fees for completing a mandatory credit counseling course and a debtor education course add to the overall cost of filing for chapter 7 bankruptcy in NYC.

Debtor Education and Credit Counseling courses cost between $0 to $500, depending on where the course is taken.  Some chapter 7 filers take free online courses, however some bankruptcy attorneys in NYC are known to charge unsuspecting clients up to $500 by including the courses in their overall fee.  At the law offices of William Waldner, clients are offered various options for taking these courses, most of which range between $15 to $25 per course.

An extensive credit report is critical when preparing a consumer bankruptcy petition.

Many attorneys try and save money by using a basic 2-bureau credit report. This is risky because simple credit reports leave out important debts that must be included in the paperwork for filing chapter 7 bankruptcy. To ensure clients receive the most helpful credit report for filing bankruptcy, William Waldner provides an ultra-comprehensive 3-bureau credit report as well as a thorough public records search.  This report is undoubtedly one of the absolute best when filing for chapter 7, however, it can be very expensive. Mr. Waldner does not charge clients for this service, and individuals who are represented by him receive this extensive credit report free of charge.

The bankruptcy cost associated with representation and preparation depends on whether you file pro se (without an attorney), with an attorney or pay a petition preparer to prepare your paperwork.

If you are looking for the cheapest way to file for bankruptcy, you can file pro se or without an attorney.  If you prepare your own paperwork the process is free.  If you have a petition preparer your case will not be free. Ironically, individuals who try and save money by filing for bankruptcy by themselves or hiring a “Bankruptcy Petition Preparer” often encounter unforeseen fees, lost assets, and debts that are not discharged by the courts, which cost far more than an attorney’s fee.

Bankruptcy is a legal process. As with most legal processes, individuals who do not have adequate experience and knowledge with the specific process should hire legal counsel. That’s why most individuals filing for bankruptcy hire a bankruptcy attorney as their first step. While retaining a lawyer is not necessary to file bankruptcy, it is highly recommended to ensure you file out the correct forms with the correct information. Not doing so can imperil your chances of becoming debt free. Bankruptcy lawyers can also help protect your personal property from being liquidated. In the vast majority of cases, individuals who are represented by bankruptcy lawyers do not lose any of their property.

Before an individual files for chapter 7 bankruptcy they must complete credit counseling from a court approved agency. If you retain William Waldner as your bankruptcy attorney he will connect you with a credit counseling agency.

This is the most complicated step when filing for chapter 7 bankruptcy and the part where having a good bankruptcy lawyer can really help. In order to file for chapter 7 bankruptcy you must prepare a Voluntary Petition, schedules, and numerous other forms that detail you income and expenses, debts, exempt property, creditors, and other information. Those forms must then be filed with the bankruptcy court clerk.

Chapter 7 Bankruptcy forms here >>

Once you have filed a voluntary petition with the court an automatic stay is put on your creditors, immediately halting creditors from trying to collect from you.

The stay on collection efforts includes:

• Evictions
• Foreclosures
• Utility shutoffs
• Lawsuit judgments
• Wage garnishments
• Other type of collection efforts.

The court appoints a trustee to oversee your case. The trustee takes control of your nonexempt property and could potentially liquidate it to compensate your credits as much as possible. The trustee will also examine your forms to make sure everything is correct.

The trustee will schedule a creditor’s meeting that you will need to attend. You may be asked questions about your financial situation. Typically creditors don’t bother to attend these meetings.

Before your debts are discharged you are required to complete a course on financial management.

The court issues a discharge order, eliminating your unsecured debt. You are no longer responsible for these debts and creditors no longer have any right to seek repayment.

After filing you are a better bet to creditors because there is no one else you owe money to. Because of the financial recession started in 2008, many financial responsible people were forced to file bankruptcy. With chapter 7 being more common, lenders are not as wary of lending to someone with a chapter 7 discharge on their credit score as they use to be.

Learn more by reading: Do I Get to Keep My House and Other Assets in Bankruptcy?

Learn more about the cost of filing bankruptcy here: