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Chapter 7 Bankruptcy Eliminates Credit Card Debt

Petition for bankruptcyThe filing of a Chapter 7 bankruptcy will usually eliminate all of a debtor’s credit card debt. In addition, it also eliminates other non-secured debts such as personal loans, debts to doctors, hospitals and other individuals and banks.

The Bankruptcy Case

The filing of a Chapter 7 bankruptcy requires the submission of a Bankruptcy Petition, statements of financial affairs and schedules with the bankruptcy court. These documents deal with the debtor’s assets and liabilities. In addition, the debtor usually has to file proof of filing of income tax returns. Bank statements and other invoices belonging to the debtor also will need to be filed.

Credit Counselling Course

A debtor seeking to file bankruptcy must take a pre-filing credit counselling course. This can be done either by telephone or on the internet. Once the debtor filed the Chapter 7 bankruptcy he or she will receive an automatic stay from the Federal Bankruptcy Court which stops all creditors from taking all legal action against the debtor. It can also stop wage garnishments and cause release of bank accounts that have been tied up.

The Creditors Meeting

If you file the Chapter 7 bankruptcy approximately 3 to 4 weeks after the filing you will have to attend a creditors meeting and give testimony before a Chapter 7 bankruptcy trustee. The trustee’s job is to analyze the debtor’s petition to determine whether the debtor has satisfied all the requirements with regard to filing the Chapter 7 bankruptcy. In most cases the Chapter 7 trustee finds there are no assets to be distributed to creditors.

Bankruptcy Exemptions

Under New York State Law there is a homestead exemption in certain areas of New York State protecting the client’s residence in the amount of $150,000.00 for each person owning and living in the residence. The individual filing the bankruptcy has the choice of either using the New York State bankruptcy exemptions or the federal exemptions. The federal exemption gives the homeowner a wild card exemption of $12,500.00 per debtor to be used to protecting any personal item or personal property belonging to the debtor.


At the end of a Chapter 7 bankruptcy the debtor receives a discharge. The means all of the debtor’s debts are forgiven and the debtor is entitled to a fresh start to rebuild his or credit again.

Elliot Schlissel

Elliot S. Schlissel is the managing partner of Schlissel DeCorpo LLP. He has been involved with more than 1,000 bankruptcy cases. He can be reached at 800-344-6451 or e-mailed at: for a free consultation.

Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick, Bellmore

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