Debt Elimination
Chapter 7 Bankruptcy
The fastest path to a debt-free life. Chapter 7 eliminates most unsecured debts in just 3–4 months — so you can stop worrying and start fresh.
The fastest path to a debt-free life. Chapter 7 eliminates most unsecured debts in just 3–4 months — so you can stop worrying and start fresh.
Chapter 7 bankruptcy — sometimes called "straight bankruptcy" or "liquidation bankruptcy" — is a federal legal process that allows individuals to eliminate most of their unsecured debts. Once your debts are discharged, you are no longer legally obligated to pay them. Period.
Despite the name "liquidation," the vast majority of Chapter 7 cases in New York are "no-asset" cases, meaning you keep everything you own. New York's generous exemptions protect your home, car, retirement accounts, household goods, and personal property. Most of our clients walk away having lost nothing except the debt that was crushing them.
Chapter 7 is the most common form of consumer bankruptcy in the United States, and for good reason: it's fast, effective, and gives people a genuine fresh start.
Before filing, you must complete an approved credit counseling course (usually done online in about an hour). We'll tell you exactly which one to take and walk you through it.
To qualify for Chapter 7, your household income must be below the New York median for your family size — or you must show that after deducting allowable expenses, you don't have enough disposable income to fund a repayment plan. We handle all the calculations and paperwork.
We prepare and file your bankruptcy petition, schedules, and supporting documents with the U.S. Bankruptcy Court for the Eastern District of New York. The moment we file, the automatic stay takes effect — creditors must immediately stop all calls, lawsuits, garnishments, and collection actions.
About 30 days after filing, you'll attend a brief meeting (usually 5–10 minutes) where the bankruptcy trustee asks routine questions about your finances. We prepare you thoroughly and attend with you. In most cases, no creditors show up.
After the 341 Meeting, you complete a second short course (financial management). Again, done online in about an hour. This is the final requirement before discharge.
Approximately 60 days after the 341 Meeting, the court issues your discharge order. All qualifying debts are permanently eliminated. You're free.
New York has some of the most generous bankruptcy exemptions in the country. Here's what's typically protected.
New York's homestead exemption protects up to $179,950–$399,900 in home equity depending on your county. For most homeowners in Brooklyn, your home is fully protected.
Up to $4,825 in vehicle equity is exempt (more for married couples filing jointly). If you owe more than the car is worth, 100% of the car is protected.
401(k)s, IRAs, pensions, and most retirement accounts are 100% exempt with no dollar limit. Your retirement is safe.
Furniture, clothing, appliances, electronics, books, and household goods are protected. You keep the things that make your house a home.
Equipment and tools necessary for your profession are exempt, protecting your ability to earn a living.
Social Security, unemployment, disability, veterans' benefits, and public assistance are fully protected and cannot be touched by the bankruptcy.
To file Chapter 7 in New York, you generally need to pass the "Means Test." This test compares your household income over the past 6 months to the median income for a household your size in New York State. If your income is below the median, you automatically qualify.
Even if your income is above the median, you may still qualify after deducting allowable expenses like rent, utilities, medical costs, childcare, and other necessities. Many people who think they earn "too much" actually pass the Means Test once deductions are applied.
As of 2026, the approximate New York median income thresholds are:
Don't assume you don't qualify based on income alone. During your free consultation, we'll run the full Means Test with your actual numbers and tell you exactly where you stand.
FACT: Over 95% of Chapter 7 cases in New York are "no-asset" cases — meaning the filer keeps everything. New York's exemptions are generous enough to protect your home, car, retirement, and personal belongings in the vast majority of cases.
FACT: Most clients see their credit scores begin improving within months of discharge. Many receive credit card offers within weeks and can qualify for car loans within a year or two. If you're drowning in debt right now, your credit is likely already suffering — bankruptcy is often the fastest way to start rebuilding.
FACT: While bankruptcy is technically a public record, it is not published in newspapers or announced publicly. Your employer, neighbors, and friends will not be notified. The only people who know are you, your attorney, the court, and the creditors listed in your case.
FACT: The Means Test allows for significant deductions. After subtracting mortgage/rent, car payments, utilities, medical expenses, childcare, taxes, and other living costs, many higher-income earners still qualify. The only way to know for sure is to run the numbers — which we do for free during your consultation.
FACT: You can file Chapter 7 again after 8 years, or file Chapter 13 just 4 years after a Chapter 7 discharge. Life happens, and the law recognizes that people may need a fresh start more than once.