Chapter 7 Bankruptcy New York: 3 Things You Need to Know

If you're dealing with debt, not knowing what steps to take can be pretty overwhelming. Therefore, we've created this article to help you understand your options. If Chapter 7 bankruptcy or possible alternatives are something you're interested in, we'll lay out all the details you'll need to know. However, before delving into things, there are a few key points to understand:
Information in this article does not constitute legal advice, it is for informational purposes only, and may not constitute the most up-to-date information. Readers should contact their attorney for advice on any particular legal matter.

New York may have quite a few filings, but it can still be a process to learn and go through. Let's talk about three things you may want to know when considering to file Chapter 7 Bankruptcy in New York.

  1. Do you know if you're eligible for Chapter 7 bankruptcy? And if so, how much might something like that cost?
  2. Are there any other alternatives that may fit your situation better?
  3. Are there any specific details about filing in New York that differ from those in other states?

We'll make sure to answer all these questions below and much more. However, if you'd like to get straight to the point, we also have a calculator to help you estimate your qualifications and cost. Feel free to click below and get started with that as well.

1) How Chapter 7 Bankruptcy Works in New York

How Fast Do You Get Relief in A Chapter 7 Bankruptcy in New York

It usually takes around 120 days to wrap up a no-asset Chapter 7 case in the state from start to finish. A "no-asset" bankruptcy means that you don't own any fancy houses or other valuable assets that might exceed the New York bankruptcy exemptions. So, if you're in a situation where you don't have an excess of assets, you could be looking at a relatively speedy resolution to your bankruptcy case.

How Much Does It Cost To File Chapter 7 Bankruptcy in New York

Bankruptcy fees depend on three main factors—location, your lawyer's experience, and the difficulty of your specific case. Generally, Chapter 7 bankruptcy fees cost between $500 and $3,000.

In New York, however, those fees can also drastically change from one city to another. For example, it might cost $895 in Buffalo but up to $2,400 in Ozone Park.

That said, you could also reduce these fees with the help of a filing fee waiver. To determine eligibility, we encourage you to visit this website and learn more about the New York filing fee waiver.

How Do I Qualify For Chapter 7 Bankruptcy in New York?

When reviewing whether you qualify for Chapter 7, you may want to check the Chapter 7 Bankruptcy New York Income Limits. This test determines if you're eligible for a bankruptcy discharge (another way of saying your debts will be forgiven). If you pass the means test (you can estimate it below), Chapter 7 will cover most of your unsecured debts. Unsecured debts don't have any collateral, such as medical bills, personal loans, certain old income tax debts, old utility bills, credit card debts, and most personal judgments.

What about secured debts in Chapter 7?

If you want to wipe out secured debts such as car loans and mortgages, Chapter 7 bankruptcy might still be the answer. But the catch is that you'll have to give up the asset to the creditor, and the creditor will consider it as full payment for what you owe.

IMPORTANT: Chapter 7 Qualification via New York Means Test

A tool to help you determine your eligibility for Chapter 7 bankruptcy in New York is the Bankruptcy Means Test. This form will help calculate your average annual income based on your last six months of gross income. It will then compare that number to the median income of other households in New York. If your median income turns out to be below the New York median income, you might qualify for a Chapter 7 bankruptcy discharge.

Feel free to use the calculator below:

My Income Exceeded The Chapter 7 Means Test Allowable in New York

If your income is higher than the median income in your state, you might need to dive into part 2 of the means test or explore an alternative option. We encourage you to check out this helpful resource: passing the Chapter 7 means test when income exceeds the median.

Chapter 7 Bankruptcy New York Income Limits

If you're filing for bankruptcy in New York on or after April 1, 2024, here are the limitations for income based on household size:

# of PeopleAnnual Income

Will I lose my belongings if I file Chapter 7 bankruptcy? Understand New York bankruptcy exemptions.

Bankruptcy exemptions help safeguard assets against being seized by creditors. The principal exemption, your household, varies widely depending on the county in New York. In Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam counties, the exemption stands at $179,950. In Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties, the exemption is $149,975. Lastly, in all other counties, the exemption is $89,975.

The second most crucial exemption, the motor vehicle exemption, depends on whether or not you are a disabled user. If you are not disabled, the exemption is $4,825. But if you are disabled, the exemption jumps up to $11,975.

There are also federal bankruptcy exemptions you could choose from. In New York, the state allows you to choose between state or federal exemptions. Therefore, it's essential to conduct your research and determine which makes the most sense for your situation.  

Chapter 7 Bankruptcy New York Pros and Cons


  • The speed at which you can receive a discharge: In just about 120 days, you could be debt-free and on your way to building a fresh start.
  • Property exemptions: If you meet the threshold for exemptions, filing for Chapter 7 bankruptcy may allow you to keep a good percentage of your personal property.
  • Stopping debt collection lawsuits: Once you file, the court will issue an automatic stay, preventing legal action against you, including calls and letters from collectors.
  • Loan deficiency: When you owe more on a loan than the collateral is worth, you may be stuck with a deficiency. But with bankruptcy, that burden could be lifted.


  • Income requirements for qualification: To be eligible for Chapter 7 bankruptcy, you must meet specific income requirements.
  • Potential loss of home and belongings: If your assets exceed the exemption limit, there is a chance that you may have to part ways with some of your property.
  • Negative impact on credit report: Filing for Chapter 7 bankruptcy can have a lasting effect on your credit report. It stays on record for a decade, making securing future loans or favorable interest rates challenging.
  • Non-dischargeable debt: It's important to note that not all debts may be discharged through Chapter 7 bankruptcy. Specific obligations, such as student loans and child support payments, are typically not eligible for discharge.

2) Alternatives to Chapter 7 Bankruptcy in New York

a) Chapter 13 Bankruptcy

If you earn more than the income limit for Chapter 7 bankruptcy, there's still a way to get some debt relief through Chapter 13 bankruptcy. A Chapter 13 Bankruptcy in New York allows you to restructure your debts into a more manageable monthly plan. This restructuring can help you keep your home and vehicles, help stop foreclosure, and prevent repossession of your belongings. Furthermore, you might be able to reduce any unpaid child support, alimony, and car loan payments.

Can you afford Chapter 13 bankruptcy?

If you are considering a Chapter 13 bankruptcy, you can use this calculator to help estimate whether you can manage the monthly payment.

b) Debt Settlement/Relief

Debt settlement may also be another option aside from Chapter 7 and Chapter 13 bankruptcy. Once you pursue this option, the debt settlement company negotiates a lower amount on your total debt, saving you money in the long run. However, consider its impact on your credit score and research correctly to choose a well-reputable and transparent debt settlement company.

c) Debt Management

Another option is debt management. Whereas debt settlement companies work to lower the total amount of debt you owe, debt management companies work to lower your interest rates. These programs usually last 3 to 5 years and are pricier than debt settlement. Not all creditors may be willing to work with a debt management company.

However, if you're dealing with a bunch of high-interest credit card debt, this option may reduce that interest by around 10-20%. This could translate to an eventual 30-50% savings on the debt you currently owe and allow you to pay off these debts more efficiently. Considering your situation and determining which option makes the most sense financially is essential.

d) Debt Payoff Planning

The last alternative we'll mention is debt payoff planning. This strategy does take some effort and will require you to cut your expenses and save excess income to pay down as much debt as possible. However, you can make tangible progress every month by choosing the appropriate debt payoff plan. Another thing to remember is that as you begin to pay off your debts, you will be able to compound those payments towards the remaining debts, allowing you to pay things off faster and faster.


After reading this article, we hope you're feeling more informed about Chapter 7 bankruptcy and its alternatives. Please refer to our calculator below if you would like an estimate of your eligibility and the possible cost.

Last, there is also the option of filing Chapter 7 bankruptcy alone. Doing so can allow you to save on filing fees. To explore this option, we encourage you to read the following resource: filing bankruptcy without an attorney.

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