Chapter 7 is the fastest path to debt relief. Most unsecured debts are eliminated in 3-4 months. Here is what New York residents need to know.
Chapter 7 discharges most unsecured debts including credit cards, medical bills, personal loans, and old utility bills. It does not discharge student loans (in most cases), recent taxes, child support, alimony, or debts incurred through fraud.
Chapter 7, sometimes called "liquidation bankruptcy" or a "fresh start," eliminates most unsecured debts. A court-appointed trustee reviews your assets. If you have non-exempt property, the trustee may sell it to pay creditors - but most Chapter 7 cases are "no-asset" cases where the filer keeps everything.
In New York, the vast majority of Chapter 7 filers keep all their property because it falls within New York exemption limits.
To file Chapter 7, you must pass the means test. This compares your household income to the state median:
The median income figures are updated periodically. For a single filer in New York, the current median is approximately $67,000/year. These figures increase with household size.
Exemptions determine what property you keep. New York gives you the choice between state and federal exemptions. Many filers choose state exemptions because of the higher homestead protection, but federal exemptions offer a more generous wildcard.
| Property | New York Exemption |
|---|---|
| Homestead | $179,975 - $215,550 (varies by county) equity |
| Vehicle | $4,825 |
| Household goods | No per-item limit |
| Tools of trade | $3,000 |
| Retirement (IRA/401k) | Fully exempt |
| Public benefits | Fully exempt |
Chapter 7 discharges most unsecured debts including credit cards, medical bills, personal loans, and old utility bills. It does not discharge student loans (in most cases), recent taxes, child support, or debts from fraud. See section 523(a) for the full list.
The means test compares your household income to the New York median. If below, you qualify automatically. If above, a detailed calculation determines eligibility.
From filing to discharge, Chapter 7 typically takes 3-4 months. The 341 meeting occurs about 30 days after filing, and the discharge is usually entered about 60 days after that.
New York exemptions protect homestead equity up to $179,975 - $215,550 (varies by county), one vehicle up to $4,825, household goods, tools of trade, and retirement accounts. Full exemption details.
Use the free 1328(f) screener to check whether a prior discharge affects your eligibility.
Free Discharge ScreenerRelated New York Bankruptcy Resources
You May Also Find Helpful