How to File Bankruptcy in NY: Chapter 7 vs 13, Means Test, Exemptions

To file bankruptcy in NY, you choose between Chapter 7 and Chapter 13, confirm you qualify, complete a pre-filing credit counseling course, gather your financial records, and submit your petition to the federal bankruptcy court for the district where you live. A Chapter 7 case typically wraps up in three to four months. A Chapter 13 case runs three to five years because it’s built around a repayment plan. The paperwork is unforgiving, so the work you do before filing matters as much as the filing itself.

Choose Between Chapter 7 and Chapter 13

Chapter 7 is a liquidation. A court-appointed trustee looks at your assets, sells anything that isn’t protected by an exemption, and uses the proceeds to pay creditors. In return, most remaining unsecured debts, credit cards, medical bills, and personal loans, are wiped out. Most Chapter 7 filers actually keep everything they own because their property fits within New York’s exemption limits.

Chapter 13 is a repayment plan. Instead of selling assets, you propose to pay back some or all of what you owe over three to five years out of your regular income. It works well if you’ve fallen behind on a mortgage or car loan and want to catch up without losing the property. Remaining eligible unsecured debts are discharged when you finish the plan.

Chapter 13 has its own eligibility ceiling. Your noncontingent, liquidated secured debts cannot exceed $1,580,125, and your unsecured debts cannot exceed $526,700. Exceeding either number rules Chapter 13 out.1Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor

Confirm You Qualify for Chapter 7: The Means Test

Not everyone can file Chapter 7. Eligibility turns on whether your household income falls below New York’s median for a family your size, measured by your average monthly income over the six months before filing.2United States Department of Justice. Means Testing

For cases filed on or after April 1, 2026, the New York annual income thresholds include $73,272 for a one-person household and $139,040 for a four-person household. These figures are updated periodically.3United States Department of Justice. Census Bureau Median Family Income By Family Size

Below the threshold, you pass. Above it, you’re not automatically out. The test moves to a second phase that subtracts allowable expenses like rent, food, medical costs, and childcare from your income. If your remaining disposable income is low enough, you can still file Chapter 7. If not, Chapter 13 is likely your only option.

Know What You Get to Keep

Exemptions are the laws that protect your property during bankruptcy. In a Chapter 7 case, anything that isn’t exempt can be sold by the trustee. In a Chapter 13 case, exemptions affect how much you have to repay through your plan.

New York does not let you pick between the state and federal exemption systems. Under the state’s Debtor and Creditor Law, filers must use New York’s exemptions.4New York State Senate. New York Debtor and Creditor Law DCD 282

Personal Property

New York’s Civil Practice Law and Rules Section 5205 protects several categories:

  • One motor vehicle with up to $4,000 in equity above any loans, or up to $10,000 if the vehicle has been equipped for a disabled owner. This exemption does not apply to debts for child support, spousal support, or when the state is the creditor.
  • Necessary furniture, one refrigerator, one TV, one computer and accessories, one cellphone, cookware, and tableware.
  • 90% of wages earned for personal services within the 60 days before an income execution or court motion.
  • Work tools, professional instruments, and related items up to $3,000.
  • A watch, jewelry, and art up to $1,000 in combined value.
  • A cash wildcard of up to $1,000 in personal property, bank funds, or cash, available only if you do not claim a homestead exemption.
5New York State Senate. New York Code CVP 5205 – Personal Property Exempt From Application to the Satisfaction of Money Judgments

Homestead

The homestead exemption under CPLR Section 5206 protects equity in your primary residence. The amount varies by county. The highest protection applies to the New York City boroughs and Long Island (Kings, Queens, Bronx, New York, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam counties). Moderate amounts cover counties like Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster. Lower amounts apply to the remaining counties. Married couples filing jointly can double the exemption. These amounts are adjusted periodically, so confirm the current figure for your county before filing.

Gather Your Documents and Complete Credit Counseling

A bankruptcy petition demands extensive paperwork. Start collecting these well before you plan to file:

  • Pay stubs from the last six months
  • Federal and state tax returns for the two most recent years
  • Bank statements for all accounts
  • A complete list of everything you own and its approximate value
  • A complete list of every creditor, with account numbers and balances
  • Statements for any loans, mortgages, or car financing

Before you can file, you must complete a credit counseling course from an agency approved by the U.S. Trustee Program. The session reviews your finances and covers alternatives to bankruptcy, and you’ll receive a certificate of completion to include with your petition. The course usually costs between $15 and $50, and you must finish it within 180 days before your filing date.6United States Department of Justice. Credit Counseling and Debtor Education Information

File Your Petition in the Right District

Your petition goes to the federal bankruptcy court in the district where you’ve lived for the greater part of the last 180 days. New York has four:

  • Southern District: Manhattan, Bronx, Westchester, and surrounding counties.
  • Eastern District: Brooklyn (Kings), Queens, Staten Island (Richmond), Nassau, and Suffolk counties.
  • Northern District: Albany and counties in the upper part of the state.
  • Western District: Buffalo, Rochester, and surrounding counties.
7United States Bankruptcy Court. Eastern District of New York Bankruptcy Court

The petition includes schedules listing every asset, every debt, your income, and your expenses. You sign everything under penalty of perjury, so accuracy matters. Errors or omissions can get your case dismissed, or in serious cases result in criminal charges for bankruptcy fraud. If you’re filing without a lawyer (known as filing pro se), you submit all documents directly to the clerk’s office.

Understand the Fees

The court filing fee is $338 for Chapter 7 and $313 for Chapter 13. If you can’t pay all at once, you can apply to pay in installments using Official Form 103A. Installments are available for both chapters. If your income is below 150% of the federal poverty line and you can’t manage even installments, you can apply for a complete fee waiver using Official Form 103B, but that waiver is only available in Chapter 7 cases.8Office of the Law Revision Counsel. 28 USC 1930 – Bankruptcy Fees

Beyond the court fee, expect to pay for the two required courses (credit counseling before filing and debtor education after), which together run roughly $30 to $100. If you hire a bankruptcy attorney, fees for a straightforward Chapter 7 in New York typically range from about $1,000 to $3,000 depending on complexity and location, with New York City fees toward the higher end. Many bankruptcy lawyers offer payment plans, and some legal aid organizations provide free representation for low-income filers.

What Happens After You File

The moment your petition is filed, a federal protection called the automatic stay takes effect. Creditors cannot call you, garnish your wages, repossess your car, foreclose on your home, or continue civil lawsuits to collect a debt.9Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay

The stay has limits. It does not stop criminal proceedings, and it won’t halt collection of domestic support obligations like child support or alimony. If you’ve had a prior bankruptcy case dismissed within the past year, the stay may be limited to 30 days or may not go into effect at all. Creditors can also ask the court to lift the stay, for example when a mortgage lender argues the property isn’t adequately protected.

A few weeks after filing, you’ll attend the meeting of creditors, commonly called the 341 meeting. Despite the name, creditors rarely show up. The meeting is run by your bankruptcy trustee, not a judge. You answer questions under oath about your finances and the documents you submitted, and it usually takes about ten minutes if your paperwork is in order.10United States Department of Justice. Section 341 Meeting of Creditors

At least 14 days before the meeting, you must provide the trustee with a copy of a government-issued photo ID and proof of your Social Security number. Show up without proper identification and the trustee will reschedule, which delays your entire case.

You also have to complete a second course after filing, called debtor education or financial management. It’s separate from the pre-filing credit counseling, and you cannot take both at the same time. In a Chapter 7 case, you generally need to complete this course within 60 days after the first date set for your 341 meeting, then file the certificate (Official Form 423) with the court. Skip it and the court will not issue your discharge.6United States Department of Justice. Credit Counseling and Debtor Education Information

Debts Bankruptcy Cannot Erase

Bankruptcy is powerful, but it doesn’t touch every debt. Federal law specifically excludes several categories:11Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge

  • Child support and alimony survive.
  • Student loans are not dischargeable unless you can prove repaying them would cause undue hardship, a standard that is difficult to meet.
  • Income tax debts can sometimes be discharged, but only if the return was due more than three years before filing, was actually filed more than two years before filing, and the tax was assessed at least 240 days before filing. Taxes from a fraudulent return or willful evasion are never dischargeable.
  • Debts obtained through false pretenses or a materially false financial statement survive.
  • Consumer debts over $500 for luxury goods charged to a single creditor within 90 days of filing are presumed nondischargeable.
  • Debts for death or personal injury caused by driving while intoxicated cannot be discharged.
  • Criminal fines, penalties, and restitution survive.
  • Debts from intentional and malicious harm to another person or their property are not dischargeable.

If you’re filing primarily to deal with a debt that falls into one of these categories, talk to a lawyer first. Filing when your main debt is nondischargeable wastes time and money.

How Long It Takes and What It Costs Your Credit

In a Chapter 7 case, the discharge order typically arrives about 60 to 90 days after the 341 meeting, assuming no one objects and you complete the debtor education course on time. Filing to discharge usually runs three to four months.

Chapter 13 is different. Your discharge comes at the end of the three-to-five-year repayment plan, after you’ve made all required payments. If your circumstances change during the plan through job loss or a medical emergency, you can ask the court to modify the plan or convert to Chapter 7.

A bankruptcy filing stays on your credit report for up to 10 years from the date of filing.12Consumer Financial Protection Bureau. How Long Does a Bankruptcy Appear on Credit Reports The practical impact fades well before the notation disappears. Many people see credit score improvements within a year or two of discharge, because the debt-to-income ratio drops sharply and rebuilding can start with a secured credit card or small installment loan.