Chapter 7 Bankruptcy Lawyer New York

Chapter 7 of the United States Bankruptcy Code is the fastest, cleanest path most Americans have to discharge unsecured debt — credit cards, medical bills, personal loans, deficiency balances, old judgments, and a wide range of other obligations. For a qualifying debtor, a properly filed Chapter 7 case eliminates dischargeable debt within roughly four months, stops collection activity from the moment of filing under the automatic stay (11 USC § 362), and lets the debtor keep property that falls within statutory exemptions.

Ronald S. Cook, P.C. files Chapter 7 cases in all four federal bankruptcy districts in New York: the Eastern District (Brooklyn — covering Long Island, Queens, Brooklyn, and Staten Island), the Southern District (Manhattan — covering Manhattan, the Bronx, and the lower Hudson Valley), the Northern District (Albany — covering upstate New York), and the Western District (Buffalo — covering western New York). Wherever you are in the state, we can file your case.

Call toll-free: (888) 275-2620. Available 24/7.

Attorney Ronald S. Cook holds a J.D., dual LL.M. degrees in Bankruptcy and Taxation, and an MBA. The dual LL.M. matters here: Chapter 7 cases routinely involve tax-debt dischargeability analysis under 11 USC §§ 507 and 523, deficiency-balance analysis after foreclosure or repossession, fraudulent-transfer exposure, and exemption planning that interacts with state-law collection statutes. Most consumer bankruptcy lawyers do not have advanced degrees in both bankruptcy and tax. Ours does.

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What Chapter 7 Bankruptcy Actually Does

Chapter 7 is the liquidation chapter of the Bankruptcy Code. In a typical consumer Chapter 7 case, three things happen, in order:

The automatic stay takes effect immediately. The moment your petition is filed with the bankruptcy court, 11 USC § 362 prohibits creditors from continuing collection activity, calls, lawsuits, wage garnishments, bank restraints, foreclosure sales, and most other enforcement against you. Creditors who violate the stay can be held liable for actual damages, attorney’s fees, and in some cases punitive damages.

A Chapter 7 trustee is appointed. The trustee reviews your petition, schedules, and statement of financial affairs, conducts a 341 meeting of creditors, and identifies any non-exempt assets that can be liquidated to pay creditors. In the vast majority of consumer Chapter 7 cases, all of the debtor’s assets are protected by exemptions and there is nothing for the trustee to liquidate. These are called “no-asset” cases.

The court issues a discharge order. Once the case proceeds normally and any objections are resolved, the bankruptcy court enters a discharge under 11 USC § 727. The discharge permanently eliminates the debtor’s personal liability for dischargeable debts. Creditors holding discharged debts are barred from ever attempting collection again.

What Chapter 7 does not do is wipe out every debt. Certain categories of debt are non-dischargeable under 11 USC § 523 — most domestic support obligations, most recent tax debts, most student loans absent a hardship showing, debts arising from fraud or willful and malicious injury, criminal restitution, and a handful of other categories. A competent Chapter 7 analysis identifies which of your specific debts will be discharged and which will survive before you file.

Who Qualifies for Chapter 7 in New York

Most consumer debtors qualify for Chapter 7. The two principal screens are the means test under 11 USC § 707(b) and the residency rules under 11 USC § 522(b).

The means test. Congress added the means test to the Bankruptcy Code in 2005 to keep higher-income debtors out of Chapter 7 and route them into Chapter 13 instead. The test compares your six-month average income against New York’s median income for households of your size. If you fall below the median, you generally qualify for Chapter 7 without further analysis. If you fall above the median, a more detailed calculation determines whether your disposable income is high enough to trigger a “presumption of abuse” — and even then, the presumption can sometimes be rebutted with documented special circumstances.

The U.S. Trustee Program updates the median income figures and other means test inputs periodically — currently twice a year. The numbers change, the calculation rules change, and the IRS national and local expense standards used in the disposable-income analysis change. This is one of the main reasons consumer debtors should not attempt the means test on their own. A miscalculation can either get a viable Chapter 7 case dismissed or convince a debtor that they don’t qualify when they actually do.

The domiciliary rule. Chapter 7 debtors choose between federal exemptions and the exemptions of the state where they were domiciled during a multi-year lookback period preceding the filing. For someone who recently moved to New York, the rules can require using the exemptions of a prior state — which may be more or less favorable than New York’s — or, in some cases, require defaulting to the federal exemption set. The domicile rules under 11 USC § 522(b)(3) and their interaction with state-law opt-out provisions are a routine source of malpractice exposure for non-bankruptcy attorneys. We screen for this issue before any New York filing.

What You Get to Keep — New York Exemptions and the Federal Alternative

One of the most common Chapter 7 misconceptions is that filing means “losing everything.” It does not. The Bankruptcy Code and New York law together protect a substantial range of property through exemptions. The exempt categories are protected from the bankruptcy trustee and, after discharge, from collection by most creditors.

New York is one of the states that allows debtors to choose between two exemption sets:

The New York state exemption set — drawn from CPLR §§ 5205 and 5206 and Debtor and Creditor Law § 282 — covers categories including homestead equity (with amounts that vary by county based on cost-of-living differences across the state), motor vehicle equity, household goods and personal effects, qualified retirement accounts, tools of trade, life insurance and annuity proceeds, certain public benefits, and a small cash or wildcard exemption available when no homestead is claimed.

The federal exemption set — under 11 USC § 522(d) — covers similar categories with different amounts and a meaningful federal “wildcard” that can shield otherwise-unprotected assets including any unused portion of the homestead exemption.

The choice between sets is made when the petition is filed and is binding for the case. The right choice depends on which assets the debtor owns, the equity in those assets, the county of residence, and whether the debtor needs the wildcard flexibility. For example: a debtor with significant equity in a Long Island home will typically choose New York exemptions because the New York homestead amount is much higher than the federal homestead amount in downstate counties. A debtor who rents and has limited assets but a paid-off vehicle and money in a checking account may do better under the federal set because of the wildcard.

Exemption amounts in both sets are adjusted periodically — New York adjusts state amounts every three years, and federal amounts adjust every three years on a separate schedule. Because the numbers change, this page does not list specific dollar figures; the analysis we run for any specific case uses the current amounts in effect on the filing date.

Tax Debt and Chapter 7 — Where the Dual LL.M. Earns Its Keep

Tax debt dischargeability is the most-asked and least-understood question in consumer bankruptcy. The general rule is that some federal income tax debt is dischargeable in Chapter 7 if every one of these conditions is met under 11 USC §§ 507(a)(8) and 523(a)(1):

The tax return for the debt was due (including extensions) more than three years before the bankruptcy filing.
The return was actually filed more than two years before the filing.
The IRS assessed the tax more than 240 days before the filing.
The return was not fraudulent and the debtor did not willfully attempt to evade the tax.

If all four conditions are met and the tax is income tax, the debt is generally dischargeable. If any condition fails — including the highly technical 240-day rule, which can be tolled by various IRS administrative actions — the tax debt survives the bankruptcy and remains fully collectible.

Trust fund taxes (employment taxes withheld from employee wages), excise taxes, and most state and local taxes follow different and often less debtor-friendly rules. Tax liens that attached before filing also survive bankruptcy as in rem claims against the property they encumber, even when the underlying tax debt is discharged.

Working out which specific tax years and which specific tax types are dischargeable in a given case requires reading account transcripts, identifying every assessment date, and tracking every event that may have tolled the running of the timing rules. This is not boilerplate work. Attorney Cook’s LL.M. in Taxation lets the firm analyze tax-debt dischargeability with the same precision a tax controversy practitioner would use.

The Chapter 7 Timeline — What to Expect

A typical no-asset Chapter 7 case in New York moves on the timeline below. For a step-by-step walkthrough of the filing procedure including required forms and documentation, see our companion page on the Chapter 7 bankruptcy filing process step by step. Specific dates vary by district, trustee, and complications in the case.

Pre-filing — credit counseling. Federal law requires every consumer debtor to complete an approved credit counseling course within the 180 days before filing. The course typically takes about an hour, runs online, and costs roughly $10 to $50. We tell clients which approved providers to use.

Day 0 — petition filing. The petition, schedules, statement of financial affairs, and required supporting documents are filed electronically with the bankruptcy court for the appropriate district. The automatic stay takes effect immediately. Creditors are typically notified within a few days.

Roughly three to five weeks after filing — 341 meeting of creditors. The Chapter 7 trustee conducts a meeting of creditors under 11 USC § 341. Despite the name, creditors rarely attend. The trustee asks the debtor a series of standard questions under oath about the petition, the schedules, and the debtor’s financial affairs. The meeting typically lasts ten minutes or less for a no-asset case. Your attorney attends with you.

Roughly 60 days after the 341 meeting — bar date for objections. Creditors and the trustee have a deadline to object to discharge under 11 USC § 727 or to object to the dischargeability of specific debts under 11 USC § 523. Most consumer cases see no objections filed.

Pre-discharge — financial management course. Federal law requires every consumer debtor to complete an approved post-filing personal financial management course before discharge. Like the pre-filing course, it runs online, takes about an hour, and is inexpensive. Failure to complete it on time can delay or prevent the discharge.

Roughly three to four months after filing — discharge. Once the objection deadline passes and the financial management course is complete, the court enters a discharge order. The case is typically closed shortly after.

Common Chapter 7 Myths

Myth: “I’ll lose my house if I file Chapter 7.”

Reality: New York’s homestead exemption protects substantial equity in a primary residence — significantly more in downstate counties than upstate, but meaningful amounts in every county. A homeowner whose mortgage balance plus the homestead exemption equals or exceeds the home’s market value typically keeps the house in Chapter 7. The trustee will not sell a house when there is no equity to distribute to creditors after the homestead exemption and the mortgage are paid. We run the equity calculation before any petition is filed.

Myth: “I’ll lose my retirement savings.”

Reality: Most qualified retirement accounts — 401(k), 403(b), pension plans, and similar ERISA-qualified plans — are protected without regard to the bankruptcy exemptions because they are not property of the bankruptcy estate in the first place under 11 USC § 541(c)(2) and the Supreme Court’s decision in Patterson v. Shumate. Traditional and Roth IRAs are protected up to a high statutory cap under 11 USC § 522(n), which is adjusted for inflation periodically. Exemption planning is needed only at the margins, generally for non-qualified deferred compensation, inherited IRAs (which are treated differently under Clark v. Rameker), and unusually large IRA balances.

Myth: “I’ll never get credit again.”

Reality: A Chapter 7 discharge does affect your credit report — the filing itself stays on the report for up to ten years under the Fair Credit Reporting Act — but most debtors who file Chapter 7 begin receiving credit card offers within months of discharge. Mortgage lenders typically require a two-to-four-year wait after discharge depending on the loan program. Auto financing usually becomes available much sooner. The practical reality is that Chapter 7 often improves credit scores within twelve to eighteen months because the dischargeable debt comes off the books and the debtor’s debt-to-income ratio improves dramatically.

Myth: “My employer will find out and fire me.”

Reality: 11 USC § 525 prohibits both governmental units and private employers from discriminating against an employee solely because the employee filed bankruptcy. Bankruptcy filings are public records, but most consumer Chapter 7 filings draw no attention from anyone outside the case. Employers in security-cleared industries or in fiduciary roles sometimes screen for filings, and certain professional licenses may require disclosure — these are real concerns, but they apply to a narrow subset of debtors. We address employment exposure during the initial consultation when it matters.

What Chapter 7 Cannot Do — and What to Consider Instead

Chapter 7 is the right tool for most consumer debt scenarios, but not all. Five common situations in which Chapter 13 may be the better fit:

You are behind on a mortgage and want to save the house. Chapter 7 stops a foreclosure for the duration of the automatic stay, but it does not let you cure the arrears over time. Chapter 13 lets you catch up on missed payments over a three-to-five-year plan while you continue making current payments — the standard tool for foreclosure defense.

You have non-dischargeable debt and need a payment plan. Recent tax debts, domestic support arrears, and certain other non-dischargeable obligations cannot be eliminated in Chapter 7. Chapter 13 lets you pay them in full over the life of the plan with the protection of the automatic stay and structured payments.

Your income is too high and you fail the means test. If the means test creates a presumption of abuse under § 707(b), Chapter 7 may not be available. Chapter 13 has no income ceiling.

You have significant non-exempt equity in property you want to keep. If the equity in your home, vehicles, or other assets exceeds the available exemptions, a Chapter 7 trustee will sell the asset. Chapter 13 lets you keep all assets by paying creditors at least the value of the non-exempt equity over the life of the plan.

You need to deal with a second mortgage that is wholly underwater. Chapter 13 in some circumstances allows “lien stripping” of a second mortgage on a primary residence when the first mortgage balance exceeds the property value — a remedy not available in Chapter 7.

The right chapter for any specific debtor turns on the facts. We screen every consultation for both options and recommend the chapter that produces the best outcome.

The Four Federal Bankruptcy Districts in New York

New York has four federal bankruptcy districts. Cases are filed in the district where the debtor has resided, been domiciled, or had a principal place of business for the greater part of the 180 days preceding filing under 28 USC § 1408.

Eastern District of New York (EDNY). Headquartered in Brooklyn with a courthouse also in Central Islip. Covers Brooklyn, Queens, Staten Island, Nassau County, and Suffolk County.

Southern District of New York (SDNY). Headquartered in Manhattan with courthouses also in Poughkeepsie and White Plains. Covers Manhattan, the Bronx, Westchester, Rockland, Putnam, Dutchess, Orange, Sullivan, and a number of upstate counties.

Northern District of New York (NDNY). Headquartered in Albany with courthouses in Utica and Syracuse. Covers most of upstate New York including the Capital Region, Mohawk Valley, Central New York, and parts of the North Country.

Western District of New York (WDNY). Headquartered in Buffalo with a courthouse in Rochester. Covers western New York including Erie, Niagara, Monroe, Genesee, Allegany, Cattaraugus, Chautauqua, Wyoming, Ontario, Steuben, and surrounding counties.

Each district has its own local rules, its own roster of trustees, and its own procedural quirks. We file in all four.

Frequently Asked Questions

How much does Chapter 7 bankruptcy cost in New York?

The cost has two components: the federal court filing fee (set by the Judicial Conference and updated periodically) and the attorney’s fee. We charge a flat attorney’s fee for consumer Chapter 7 cases. The fee depends on the complexity of the case — number of creditors, asset profile, prior bankruptcy history, business interests, and tax issues. Call us at (888) 275-2620 for a fee quote tailored to your situation. There is no charge for the consultation.

Will I have to go to court?

You will attend one meeting — the 341 meeting of creditors — typically conducted by Zoom or telephone in many New York districts. You will not appear before a bankruptcy judge in a typical no-asset Chapter 7 case. If your case requires court hearings (objection litigation, lien avoidance motions, reaffirmation hearings, or other contested matters), your attorney handles them.

How long does Chapter 7 take?

From the date of filing to discharge, a typical no-asset consumer case runs three to four months. The case stays open for a brief period after discharge while the trustee files a final report and the court closes the case. Cases involving asset liquidation, dischargeability disputes, or other complications take longer.

Will I lose everything if I file Chapter 7?

No. New York and federal exemptions together protect a substantial range of property — homestead equity, vehicles, household goods, qualified retirement accounts, tools of trade, and more. The vast majority of consumer Chapter 7 cases in New York are no-asset cases in which the debtor keeps everything. We run the exemption analysis before filing so there are no surprises.

Can Chapter 7 stop a foreclosure sale?

Chapter 7 stops a foreclosure sale immediately upon filing, by operation of the automatic stay under 11 USC § 362. The stay holds for the duration of the case. However, Chapter 7 does not let you cure mortgage arrears — if you are behind on payments and want to keep the house long-term, Chapter 13 is the better tool. Chapter 7 buys time and discharges other debt; Chapter 13 saves the house.

Can Chapter 7 stop wage garnishment?

Yes. The automatic stay halts wage garnishment immediately upon filing. Garnishments collected within the 90 days before filing may be recoverable as preferential transfers under 11 USC § 547 if the amount exceeds the statutory threshold. We analyze pre-filing garnishments as part of the case workup.

Can I file Chapter 7 if I’ve filed before?

You can file Chapter 7 again, but discharge timing rules apply. Under 11 USC § 727(a)(8), a Chapter 7 discharge is unavailable if the debtor received a Chapter 7 discharge in a case filed within the prior eight years. Different timing rules apply for prior Chapter 13 cases. We check filing history before recommending a chapter.

Are student loans dischargeable in Chapter 7?

Most federal and private student loans survive Chapter 7 discharge under 11 USC § 523(a)(8) absent a showing of “undue hardship,” which requires a separate adversary proceeding and is difficult to win in most circuits. The Department of Justice has issued guidance loosening its position on hardship discharge requests in recent years, and the law in this area continues to evolve. We assess hardship discharge viability case by case.

What if my income is mostly Social Security?

Social Security income is excluded from the means test calculation under 11 USC § 101(10A). Many debtors who appear to be over the income threshold qualify for Chapter 7 once Social Security is removed from the analysis. The same exclusion applies in Chapter 13 means-test plan calculations.

Will Chapter 7 affect my spouse’s credit?

Filing Chapter 7 affects your credit report only — not your spouse’s, unless the spouse is a co-filer or co-signer on specific accounts. Joint debts on which both spouses are liable will continue to show on the non-filing spouse’s credit report after one spouse’s Chapter 7 discharge, because the discharge operates only as to the filing spouse’s personal liability.

Why Choose Ronald S. Cook, P.C.

Attorney Ronald S. Cook has practiced law in New York for over 25 years. He holds a J.D., dual LL.M. degrees in Bankruptcy and Taxation, and an MBA. He has been recognized by Super Lawyers. The dual LL.M. structure is unusual in consumer bankruptcy practice — it lets the firm handle the tax-debt dischargeability, transfer analysis, and exemption-planning issues that arise in real Chapter 7 cases at a level of detail most consumer practitioners cannot match. The firm has over 3,000 client testimonials across Google, BBB, Trustpilot, and other review platforms.

Contact Us

Call toll-free: (888) 275-2620. Available 24/7.

Suffolk County Office: 12 Bank Avenue, Smithtown, NY 11787

Nassau County Office: 1225 Franklin Avenue, Suite 325, Garden City, NY 11530

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Last reviewed by Attorney Ronald S. Cook — November 2026

Client reviews and ratings reflect individual experiences and do not guarantee a similar outcome. Prior results do not guarantee future results.

This page is for informational purposes only and does not constitute legal advice.