Automatic stay
An injunction that automatically stops lawsuits, foreclosures, garnishments, and most collection activities against the debtor the moment a bankruptcy petition is filed.

Bankruptcy estate
All interests of the debtor in property at the time of the bankruptcy filing. The estate technically becomes the temporary legal owner of all of the debtor’s property.

Bankruptcy petition
A formal request for the protection of the federal bankruptcy laws. (There is an official form for bankruptcy petitions.)

Bankruptcy trustee
A private individual or corporation appointed in all Chapter 7 and Chapter 13 cases to represent the interests of the bankruptcy estate and the debtor’s creditors.

Chapter 13
The chapter of the Bankruptcy Code providing for the adjustment of debts of an individual with regular income, often referred to as a “wage-earner” plan. Chapter 13 allows a debtor to keep property and use his or her disposable income to pay debts over time, usually three to five years.

Chapter 13 trustee
A person appointed to administer a Chapter 13 case. A Chapter 13 trustee’s responsibilities are similar to those of a Chapter 7 trustee; however, a Chapter 13 trustee has the additional responsibilities of overseeing the debtor’s plan, receiving payments from debtors, and disbursing plan payments to creditors.

Chapter 7
The chapter of the Bankruptcy Code providing for “liquidation,” that is, the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors. In order to be eligible for Chapter 7, the debtor must satisfy a “means test.” The court will evaluate the debtor’s income and expenses to determine if the debtor may proceed under Chapter 7.

Chapter 7 trustee
A person appointed in a Chapter 7 case to represent the interests of the bankruptcy estate and the creditors. The trustee’s responsibilities include reviewing the debtor’s petition and schedules, liquidating the property of the estate, and making distributions to creditors. The trustee may also bring actions against creditors or the debtor to recover property of the bankruptcy estate.

Claim
A creditor’s assertion of a right to payment from a debtor or the debtor’s property.

Confirmation
Approval of a plan of reorganization by a bankruptcy judge.

Consumer bankruptcy
A bankruptcy case filed to reduce or eliminate debts that are primarily consumer debts.

Consumer debts
Debts incurred for personal, as opposed to business, needs.

Credit counseling
Generally refers to two events in individual bankruptcy cases: (1) the “individual or group briefing” from a nonprofit budget and credit counseling agency that individual debtors must attend prior to filing under any chapter of the Bankruptcy Code; and (2) the “instructional course in personal financial management” in chapters 7 and 13 that an individual debtor must complete before a discharge is entered. There are exceptions to both requirements for certain categories of debtors, exigent circumstances, or if the U.S. trustee or bankruptcy administrator have determined that there are insufficient approved credit counseling agencies available to provide the necessary counseling.

Creditor
A person to whom or business to which the debtor owes money or that claims to be owed money by the debtor.

Debtor’s plan
A debtor’s detailed description of how the debtor proposes to pay creditors’ claims over a fixed period of time.

Discharge
A release of a debtor from personal liability for certain dischargeable debts. Notable exceptions to dischargeability are taxes and student loans. A discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents the creditors owed those debts from taking any action against the debtor or the debtor’s property to collect the debts. The discharge also prohibits creditors from communicating with the debtor regarding the debt, including through telephone calls, letters, and personal contact.

Dischargeable debt
A debt for which the Bankruptcy Code allows the debtor’s personal liability to be eliminated.

Disposable income
Income not reasonably necessary for the maintenance or support of the debtor or dependents. If the debtor operates a business, disposable income is defined as those amounts over and above what is necessary for the payment of ordinary operating expenses.

Exempt assets
Property that a debtor is allowed to retain, free from the claims of creditors who do not have liens on the property.

Exemptions, exempt property
Certain property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors. For example, in some states the debtor may be able to exempt all or a portion of the equity in the debtor’s primary residence (homestead exemption), or some or all “tools of the trade” used by the debtor to make a living (i.e., auto tools for an auto mechanic or dental tools for a dentist). The availability and amount of property the debtor may exempt depends on the state the debtor lives in.

Fresh start
The characterization of a debtor’s status after bankruptcy, i.e., free of most debts. (Giving debtors a fresh start is one purpose of the Bankruptcy Code.)

Lien
A charge on specific property that is designed to secure payment of a debt or performance of an obligation. A debtor may still be responsible for a lien after a discharge.

Liquidated claim
A creditor’s claim for a fixed amount of money.

Liquidation
The sale of a debtor’s property with the proceeds to be used for the benefit of creditors.

Means test
Section 707(b)(2) of the Bankruptcy Code applies a “means test” to determine whether an individual debtor’s chapter 7 filing is presumed to be an abuse of the Bankruptcy Code requiring dismissal or conversion of the case (generally to chapter 13). Abuse is presumed if the debtor’s aggregate current monthly income (see definition above) over 5 years, net of certain statutorily allowed expenses is more than (i) $10,000, or (ii) 25% of the debtor’s nonpriority unsecured debt, as long as that amount is at least $6,000. The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income.

Motion to lift the automatic stay
A request by a creditor to allow the creditor to take action against the debtor or the debtor’s property that would otherwise be prohibited by the automatic stay.

Nondischargeable debt
A debt that cannot be eliminated in bankruptcy. Examples include a home mortgage, debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime. Some debts, such as debts for money or property obtained by false pretenses and debts for fraud or defalcation while acting in a fiduciary capacity may be declared nondischargeable only if a creditor timely files and prevails in a nondischargeability action.

Objection to dischargeability
A trustee’s or creditor’s objection to the debtor being released from personal liability for certain dischargeable debts. Common reasons include allegations that the debt to be discharged was incurred by false pretenses or that debt arose because of the debtor’s fraud while acting as a fiduciary.

Objection to exemptions
A trustee’s or creditor’s objection to the debtor’s attempt to claim certain property as exempt from liquidation by the trustee to creditors.

Plan
A debtor’s detailed description of how the debtor proposes to pay creditors’ claims over a fixed period of time.

Priority
The Bankruptcy Code’s statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full.

Priority claim
An unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid.

Proof of claim
A written statement describing the reason a debtor owes a creditor money, which typically sets forth the amount of money owed. (There is an official form for this purpose.)

Property of the estate
All legal or equitable interests of the debtor in property as of the commencement of the case.

Reaffirmation agreement
An agreement by a debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession.

Redemption
A procedure in a Chapter 7 case whereby a debtor removes a secured creditor’s lien on collateral by paying the creditor the value of the property. The debtor may then retain the property.

Schedules
Lists submitted by the debtor along with the petition (or shortly thereafter) showing the debtor’s assets, liabilities, and other financial information. (There are official forms a debtor must use.)

Secured creditor
A secured creditor is an individual or business that holds a claim against the debtor that is secured by a lien on property of the estate. The property subject to the lien is the secured creditor’s collateral.

Secured debt
Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans and tax liens.

Statement of financial affairs
A series of questions the debtor must answer in writing concerning sources of income, transfers of property, lawsuits by creditors, etc. (There is an official form a debtor must use.)

Statement of intention
A declaration made by a chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate.

Trustee
The representative of the bankruptcy estate who exercises statutory powers, principally for the benefit of the unsecured creditors, under the general supervision of the court and the direct supervision of the U.S. trustee or bankruptcy administrator. The trustee is a private individual or corporation appointed in all chapter 7, chapter 12, and chapter 13 cases and some chapter 11 cases. The trustee’s responsibilities include reviewing the debtor’s petition and schedules and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. In chapter 7, the trustee liquidates property of the estate, and makes distributions to creditors. Trustees in chapter 12 and 13 have similar duties to a chapter 7 trustee and the additional responsibilities of overseeing the debtor’s plan, receiving payments from debtors, and disbursing plan payments to creditors.

Undue hardship
The most widely used test for evaluating undue hardship in the dischargeability of a student loan includes three conditions: (1) the debtor cannot maintain – based on current income and expenses – a minimal standard of living if forced to repay the loans; (2) there are indications that the state of affairs is likely to persist for a significant portion of the repayment period; and (3) the debtor made good faith efforts to repay the loans.

Unsecured claim
A claim or debt for which a creditor holds no special assurance of payment, such as a mortgage or lien; a debt for which credit was extended based solely upon the creditor’s assessment of the debtor’s future ability to pay.

Our fees for representation of clients start at $1,500 plus court filing fees. We file cases in the Eastern and Southern Districts of New York. Our office is conveniently located in Downtown Brooklyn.

Most people facing financial distress resist filing for Chapter 7 bankruptcy protection for months or even years because they think the process will be complicated, that they will lose, that they will never be able to get their credit score fixed after filing, that they cannot keep their home or car if they file.

Legal process will lead to a significant reduction in debt and an increase in financial freedom.

Bring 10 plus years of Chapter 7 bankruptcy law legal experience to your case, ensuring that the maximum amount of debt is discharged.
Work to ensure that your legal process is smooth, fast and efficient. Complete the required forms, file them, attend the 341 Meeting of the Creditors and minimize your exposure to the hassles of the legal process.
Lessen your anxiety by keeping you informed at each step of the proceedings

Chapter 7 bankruptcy is often called the “fresh start” bankruptcy because it provides just that: it can “reset” your finances so that you no longer live under the crushing burden of unmanageable debt.

Chapter 7 bankruptcy doesn’t involve a complicated repayment plan like Chapter 13 bankruptcy can. Instead, in its simplest form, it allows for the discharge, or “forgiveness”, of non-exempt debt. This debt can include:

• Medical-related debt
• Credit card debt
• Debt owed directly to specific retailers
• Pay day loans
• Utility bills
• Cell phone bills
• Deficiency balances from foreclosures and repossession

The filing of a Chapter 7 petition will impose an automatic stay which means the filing will:

• Release your frozen bank accounts
• Stop harassment by creditors
• Stop all wage garnishments
• Stop any Foreclosure proceedings
• Stop eviction (if certain requirements are met)