The month of January can be a difficult time for financially for anyone. They may have acquired even more debt due to holiday spending and are reaching the point where they have to choose between paying the rent and paying their credit card bill. People stuck in this situation may benefit from Chapter 7 bankruptcy.

Most New Yorkers who file for Chapter 7 bankruptcy undergo what is known as a no-asset case. This means that you don’t have any non-exempt money or property that can be taken and sold to satisfy the claims of your creditors.

“No-asset bankruptcy” is not a legal definition: it is a description of a Chapter 7 case where a state or federal exemption protection everything you own or that any nonexempt assets have no cash value. It doesn’t mean that you are completely broke, homeless, or living below the poverty line.

For example, if you chose the New York state bankruptcy exemptions and own a motor vehicle worth $12,000 that you still owe $9,000 on, then your trustee cannot take the vehicle because state exemptions allow you to protect up to $4,425. If you owed less than this amount, then the car could be subject to seizure and sale. In some instances, you may be able to keep a nonexempt asset if you pay the bankruptcy trustee an amount equal to its value, although this approach won’t usually apply to more expensive items.

Benefits of a no-asset bankruptcy include:

  • You receive a discharge sooner. When there are no assets to appraise and sell, your Chapter 7 case moves more quickly.
  • Even debts from unlisted creditors will be eliminated. When you file for Chapter 7 bankruptcy, all creditors must be listed. If you had nonexempt property that could be sold and you forgot to list a creditor, then you are not protected from their future claim. With a no-asset bankruptcy, federal and many state bankruptcy laws will consider the omitted creditor’s debts discharged because they would not have received anything anyway.

If you have too many assets that you stand to lose in a Chapter 7 bankruptcy case, then it may make more sense to file for Chapter 13, which allows you to keep practically all of your property by entering into a payment plan to repay your debts over a three-to-five-year period.

When you are struggling financially, and bankruptcy appears to be the only viable option for avoiding creditor lawsuits, contact a New York bankruptcy attorney to review your situation and make an appropriate recommendation for your circumstances. Every year thousands of Americans use Chapter 7 to start over financially, and it may be a viable solution for you. Jayson Lutzky is a Bronx bankruptcy attorney who can help you get the fresh financial start that you need. If you are struggling with debt, then set up a free initial in-office consultation to review your financial situation with Mr. Lutzky. He will help determine if a personal bankruptcy is your best option. Visit to learn more and call 718-514-6619 for an appointment.