Chapter 7

As a bankruptcy lawyer who practices in Queens, NY I am often asked to explain the difference between a chapter 7 and chapter 13 bankruptcy.  I would like to briefly outline some of the key points of a chapter 7 bankruptcy.

One of the key components of a chapter 7 bankruptcy is the total elimination of your unsecured debt.  That is debt which has no security such as your credit cards, medical bills, and many other types of bills.  In a chapter 7, regardless of how much debt you may have that is unsecured – the entire unsecured portion will be wiped out in bankruptcy.  You could have over $100,000 of credit card debt and if you filed for a chapter 7 bankruptcy, you could eliminate all of that debt in its entirety.

Chapter 7 also has the ability to allow you to surrender property and to no longer be liable for the secured debt.  Let’s say for example, you bought a condo as an investment property.   The condo is now worth $100,000 but your loan on the condo is $200,000.  This is a bad deal and you want out.  When you file for a chapter 7 bankruptcy, you can surrender the condo and eliminate your personal responsibility on the debt.

There are a number of other additional benefits to a chapter 7 that are just too long to list in this article, but it should be noted that in most cases – even though you are eliminating your debt – most of my clients keep all of their assets.

As a bankruptcy attorney who practices in Queens, I hep people identify if they qualify for a chapter 7 everyday and I help them get the most out of filing for a chapter 7.  Give me a call today for a free consultation where I will go over any questions you may have about filing for bankruptcy.