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What Is a Chapter 7 Bankruptcy? June 11, 2018

Chelsea, Manhattan
What Is a Chapter 7 Bankruptcy?, Manhattan, New York

Constantly struggling to keep your head above water financially can be exhausting, especially if the budget won’t balance no matter how hard you work. Fortunately, filing for bankruptcy can provide a way out, offering a chance to wipe the slate clean and start over again. Chapter 7 bankruptcy allows borrowers to eliminate most unsecured debts and puts a stop to creditor harassment.

Erasing Most Unsecured Debts

Most unsecured debts, like credit cards, loans and medical bills can be completely discharged in a chapter 7 bankruptcy. Amounts you still owe after a repossession or foreclosure can also be erased, along with judgments in civil cases and past due utility bills. While filing for bankruptcy under chapter 7 can eliminate your responsibility for secured debts, it won’t get rid of any liens associated with the loan. For instance, even though it’s possible to discharge financial liability for a car loan, you won’t get to keep the vehicle unless you reaffirm the debt.

Surrendering Property

filing for bankruptcyIn exchange for discharging debts, the trustee in a chapter 7 bankruptcy  technically may seize some of your assets to reimburse creditors. However, state and federal laws allow borrowers to exempt a wide range of belongings, and many bankruptcy petitioners can get financial relief without surrendering anything at all. In New York, for instance, petitioners use the exemptions provided under state and local law or choose from the list of federal options.

 

If you’re thinking of filing for bankruptcy, the legal document preparation professionals at We The People of NY will type up the petition according to court standards and even walk you through the process. For over 25 years, they’ve been bringing justice to many individuals, reducing the stress and expense of dealing with the legal system. To learn more about how they can assist with filing for bankruptcy, visit the website or call (212) 633-2200, and follow their Twitter for more tips and advice. To get started today, just visit their storefront, no appointment necessary.

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