There is an unnecessary stigma surrounding bankruptcy.
Instead, think of it as an opportunity for a fresh start. 

Bankruptcy can offer you a fresh start if your financial situation has become unmanageable due to a loss of job, medical bills, or mountains of credit card debt you can’t get out from under. 


The most common type of bankruptcy is liquid bankruptcy.
This is also known as a straight bankruptcy, or Chapter 7 bankruptcy. Chapter 7 refers to the chapter in the United States bankruptcy code that governs this type of bankruptcy case. 

In a Chapter 7 bankruptcy, the debtor’s existing assets are sold, or liquidated. The net proceeds are distributed to the creditors pro rata, or proportionally. While the bankruptcy process is pending, creditors are prohibited from attempting to collect on any of their claims from the debtor. This protects you from harassment from debt collectors. 

Compared to other types of bankruptcies, Chapter 7 bankruptcy is usually a simple and straightforward process if you’re working with an experienced legal advocate. It costs less than other forms of bankruptcies and is well suited for those with little or no assets. 


What kinds of debt are covered by Chapter 7 bankruptcy?
Chapter 7 bankruptcy can eliminate most or all of your unsecured debt. However, debts like student loans, child support, and taxes are non-exempt. 


What assets will be liquidated?
Your personal property like household goods and clothing, as well as any public benefits or personal injury damages you’ve accumulated in a bank account are exempt from liquidation. You may also be allowed to keep motor vehicles up to a certain value and a portion of the equity in your home. 

In fact, many Chapter 7 cases are called “no asset cases” because there are no non-exempt assets to collect.

You will need to surrender stocks and bonds, investments, and cash and bank accounts to pay your debtors. Your bankruptcy trustee, an independent party, administers the orderly collection and distribution of your assets to creditors.  


Considering a debt consolidation or debt relief company?
Before you, your clients, or your friends consider debt consolidation or debt relief from companies like Freedom Debt Relief, New York Debt Relief, or National Debt Relief, please call us and we will determine whether or not you would benefit from such debt relief companies. If we cannot help you with our legal services, we will recommend alternative solutions. 

We are here for you. 

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation. 

Additional Resources

 Want to read the actual legal code governing Chapter 7 bankruptcy? Find it here. 

Take action now to reduce your expenses. Learn to trim your household costs and prioritize spending.   

Do you need unemployment benefits? Read our recent article on unemployment in the time of COVID-19.


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We are a Debt Relief Agency. We Help People file for Bankruptcy under the Bankruptcy Code.


The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

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