Chapter 7 Bankruptcy for NY Residents
A Chapter 7 bankruptcy case is a proceeding in which a person who owes debts, referred to as a debtor, seeks relief from creditors under Chapter 7 of the United States Bankruptcy code (the “Code”). The Code refers to Title 11 of the United States Code (11 U.S.C. sections 101-1330). In a Chapter 7 case, the debtor’s nonexempt property is subject to seizure by chapter 7 trustee who subsequently liquidates the property by auction or sale and uses the proceeds to pay unsecured creditors pro rata. In most cases, debtor’s have no assets that are subject to seizure by a Chapter 7 trustee because State and Federal exemptions protect those belongings.
Filing Chapter 7 Bankruptcy
The debtor’s goal in filing chapter 7 bankruptcy is to obtain a discharge from all of his or her dis-chargeable debts. The discharge is a court order that releases the debtor from all or most of his or her debts as well as prevents future attempts by creditors to collect debts. In order to complete a chapter 7 bankruptcy petition and applicable forms, the debtor should gather and identify the following information: (i) A list of all creditors and the amount and nature of their claims; (ii) proof of his or her source of income; (iii) a list of all property and assets; (iv) a complete and accurate monthly budget which includes living expenses such as rent payment, car payment, food expense transportation, etc.
Chapter 7 Bankruptcy and Automatic Stays
Upon filing any bankruptcy case, an automatic stay is put in place preventing collection efforts by creditors. The immediate relief given to all chapter 7bankruptcy filers can transform their lives. The effects of a successful chapter 7 bankruptcy completely eliminates most debts and not one of those debts remains on a Chapter 7 bankruptcy record as unresolved or unpaid.