Filing for bankruptcy is a decision that can have a substantial impact on your financial circumstances. For many people, filing under Chapter 7 will immediately improve their situation and is the first step to a brighter financial future. That said, it’s understandable if you are worried about what happens after you file, which is why we’ve described some of the important milestones in a Chapter 7 case in the material below. For more information or to discuss your case with a New York bankruptcy attorney, call our office today.
The Automatic Stay
The moment your file for bankruptcy, the automatic stay goes into effect. The automatic stay is an injunction that prevents any new or ongoing collection activities from creditors, including calls, letters, repossessions, lawsuits, and foreclosures. If you are facing eviction or foreclosure, the automatic stay can give you the breathing room you need to get caught up or negotiate a solution.
341 Meeting of Creditors
After you file, the bankruptcy clerk will issue a notice regarding a 341 meeting to you and your creditors. At the 341 meeting, the bankruptcy trustee and creditors can question you under oath regarding your assets, debts, and other information that is relevant to your case. Importantly, it is unlikely that your creditors will actually attend your 341 Meeting, but you are required to do so. You can – and should – be represented by counsel at the 341 meeting.
The Liquidation of Your Non-Exempt Assets
In a Chapter 7 Bankruptcy, your non-exempt assets will be liquidated by the bankruptcy trustee and the proceeds of the sale will be used to pay off your creditors. Fortunately, there are ample exemptions available to people who file in New York. In fact, most Chapter 7 cases are “zero-asset” cases, which means that debtors are able to keep all of their assets while obtaining the benefits of filing.
The Discharge of Your Debts
Once any non-exempt assets you have are liquidated and your creditors are paid, your remaining debts will be discharged – provided that they are not nondischargeable by law. Examples of debts that can be discharged in Chapter 7 include medical bills, credit card balances, personal loans, utility bills, past-due rent, certain tax debts, and auto loans. Examples of debts that are usually nondischargeable include past-due child support payments, some tax debts, and alimony payments.
An attorney familiar with Chapter 7 bankruptcy can help ensure that Chapter 7 is right for you and also help you take advantage of all of the exemptions available to you.
Call Us Today to Speak with a New York Bankruptcy Lawyer
If you are having financial trouble and can’t seem to get ahead on your debts, Chapter 7 bankruptcy may be able to help. David Romerman began his career as a derivatives attorney and left Morgan Stanley in 2016 to help consumers obtain a fresh start through bankruptcy. For a free phone consultation with Mr. Romerman, call us today at (646) 492-8702 or contact us online.