To file bankruptcy in NYC, you choose between Chapter 7 and Chapter 13, complete a pre-filing credit counseling course from an approved provider, gather the required financial records, and file your petition in the federal bankruptcy court that covers your borough. Manhattan and the Bronx fall under the Southern District of New York; Brooklyn, Queens, and Staten Island fall under the Eastern District.1United States Bankruptcy Court. United States Bankruptcy Court for the Southern District of New York The federal framework is the same everywhere in the country, but New York’s exemptions and the city’s cost of living shape which chapter makes sense and what you get to keep.
Chapter 7 or Chapter 13
Chapter 7 is liquidation. A court-appointed trustee reviews what you own, sells anything not protected by an exemption, and uses the proceeds to pay creditors. Qualifying debt that remains is wiped out through a discharge, usually about four months after filing.2United States Courts. Discharge in Bankruptcy – Bankruptcy Basics Most consumer Chapter 7 cases are “no-asset” cases, meaning the trustee finds nothing worth selling and the filer keeps everything.
Chapter 13 is a repayment plan funded by your future income. The plan runs three to five years, depending on whether your income is below or above New York’s median for your household size.3United States Courts. Chapter 13 – Bankruptcy Basics You make monthly payments to a trustee, who distributes the money to creditors. Remaining eligible debt is discharged when you finish the plan.
Chapter 13 is the usual path for people behind on a mortgage or car loan who have enough income to catch up over time, because the plan payments come from earnings instead of asset sales and you keep your property. Chapter 7 fits people with limited income and few non-exempt assets who need a clean break. Often the means test makes the decision.
Who Qualifies to File
Venue
You can file in a district where you’ve lived for the greater portion of the last 180 days, which in practice means at least 91 of the prior 180 days.4Office of the Law Revision Counsel. 28 USC 1408 – Venue of Cases Under Title 11 If you’ve been in NYC that long, you file here, in the Southern or Eastern District depending on your borough.
The Means Test for Chapter 7
Chapter 7 is not open to everyone. Filers must pass the means test, which compares your average monthly income over the six months before filing against New York’s median income for your household size.5United States Department of Justice. Means Testing The thresholds in effect through early 2026 are:
- One earner: $71,393
- Household of two: $90,520
- Household of three: $112,616
- Household of four: $135,475
Below the threshold, you pass and can proceed with Chapter 7.6United States Department of Justice. Median Family Income Table – November 2025 Above it, you may still qualify after deducting certain allowed expenses, but many above-median filers end up in Chapter 13. The figures are updated periodically, so check the U.S. Trustee’s website before filing.
Pre-Filing Credit Counseling
Every individual filer must complete a credit counseling course from a provider approved by the U.S. Trustee Program within 180 days before filing. The court will dismiss your petition if you skip this step or let the certificate expire before you file.7United States Department of Justice. Credit Counseling and Debtor Education Information Most approved providers offer sessions online or by phone for about $25 to $50, and the session takes about an hour.
What You Can Keep: New York Exemptions
Exemptions protect certain property from being taken to pay creditors. New York has opted out of the federal exemption system, so filers here use the state’s own exemptions.8New York State Senate. New York Debtor and Creditor Law 282 – Permissible Exemptions in Bankruptcy They protect equity, not an item’s full value. If you owe $15,000 on a car worth $17,000, your equity is $2,000, which fits well within the vehicle cap.
Homestead
For the five NYC boroughs, the homestead exemption protects up to $150,000 per person in equity above any mortgage or liens in your primary residence.9New York State Senate. New York Civil Practice Law and Rules 5206 – Real Property Exempt From Application to the Satisfaction of Money Judgments It covers houses, condos, co-ops, and mobile homes where you actually live. A married couple filing jointly who both own an interest effectively doubles the protection to $300,000.
Vehicle, Benefits, and Other Property
- Motor vehicle: up to $4,000 in equity in one vehicle, or $10,000 if the vehicle is equipped for a person with a disability.
- Benefits: Social Security, unemployment compensation, public assistance, veterans’ benefits, and disability payments are fully protected.
- Retirement accounts: 401(k), IRA, 403(b), and similar qualified plan funds are generally shielded from the bankruptcy estate.
- Personal injury payments: up to $7,500 for personal bodily injury awards, excluding pain and suffering.
- Rent-stabilized leases: your interest in a rent-stabilized apartment is specifically protected, which matters in NYC where those leases carry real economic value.
Household furniture, clothing, and tools of your trade are also exempt from creditor claims under CPLR Section 5205.
Debts Bankruptcy Won’t Erase
Federal law carves out categories that survive discharge in either chapter:10Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge
- Child support and alimony.
- Most student loans, unless you can prove “undue hardship” in a separate proceeding. Recent DOJ guidance focuses on ability to repay, likelihood of future hardship, and good-faith past efforts, but the bar remains high.
- Recent income taxes, taxes where no return was filed, and taxes involving fraud.
- Debts obtained through fraud, false pretenses, or misrepresentation.
- Liability for death or injury caused by drunk driving.
- Criminal fines and restitution.
- Debts you fail to list, if the creditor doesn’t learn about the case in time to file a claim.
If most of what you owe falls into these categories, bankruptcy may cost you time and money without solving the core problem. Run through this list honestly before filing.
Documents and Forms
Federal law requires you to provide the court and the trustee with specific records:11Office of the Law Revision Counsel. 11 US Code 521 – Debtors Duties
- Pay stubs received within 60 days before your filing date, from every employer.
- Your most recent federal income tax return, delivered to the trustee no later than seven days before the 341 meeting of creditors. Any unfiled returns from the three years before your case must also be filed.
- An inventory of everything you own, with estimated values, from furniture and electronics to bank balances and retirement funds.
- A list of every creditor with mailing addresses and current balances.
These feed into the Official Bankruptcy Forms. Form 101, the Voluntary Petition for Individuals, is the main document, and you’ll also complete schedules covering property, income, expenses, and each type of claim against you.12United States Courts. Voluntary Petition for Individuals Filing for Bankruptcy Inconsistencies between your pay records and your disclosures can trigger fraud allegations or denial of discharge, so cross-check everything. When sending documents to the trustee, redact Social Security numbers and account numbers down to the last four digits.
Filing the Petition
Attorneys file electronically through the court’s case management system. If you file without a lawyer, the Eastern District offers a Pro Se Law Clerk who can answer procedural questions, though court staff cannot give legal advice.13United States Bankruptcy Court. Filing Pro Se – Without an Attorney Both districts have local rules and local forms on top of the federal forms, so check the court’s website before your filing date.
Filing without an attorney is risky. Pro se filers are held to the same procedural standards as lawyers, and mistakes in exemption elections, form completion, or means test calculations can cost you property you could have protected or get your case dismissed.14United States Courts. Filing Without an Attorney Non-lawyer petition preparers are legally prohibited from offering legal advice or explaining how to answer questions on the forms. Attorney fees for a straightforward NYC consumer bankruptcy typically run from about $1,000 to $3,000, depending on chapter and complexity.
The filing fee is $338 for Chapter 7 and $313 for Chapter 13. Both can be paid in installments with court approval. Chapter 7 filers with household income below 150% of the federal poverty guidelines who cannot afford installments can apply for a full fee waiver.15United States Bankruptcy Court. Filing Fees Fee waivers are not available in Chapter 13.
What Happens After You File
The Automatic Stay
The moment your petition is filed and assigned a case number, the automatic stay takes effect. This federal injunction stops most creditor actions, including lawsuits, wage garnishments, collection calls, and foreclosure proceedings.16Office of the Law Revision Counsel. 11 US Code 362 – Automatic Stay It is not absolute. Criminal proceedings, most tax audits, and domestic support collection continue. If you had a prior case dismissed within the past year, the stay may be limited to 30 days or not apply at all.
The 341 Meeting of Creditors
Roughly 20 to 40 days after filing, you attend the 341 meeting. The bankruptcy trustee runs it, places you under oath, and asks questions about your financial situation and the accuracy of your petition. Creditors rarely show up. In most consumer cases the meeting takes 10 to 15 minutes. Bring a government-issued photo ID and proof of your Social Security number. Failing to appear will get your case dismissed.
The Debtor Education Course
After filing but before you receive a discharge, you must complete a second course: a personal financial management class from a provider approved by the U.S. Trustee Program. This is separate from the pre-filing credit counseling. If you don’t file the certificate of completion, the court will close your case without discharging your debts.17United States Courts. Credit Counseling and Debtor Education Courses The two courses are often confused; they are not interchangeable.
Discharge
In Chapter 7, the discharge typically arrives about four months after filing, assuming no complications or objections. Chapter 13 cases end with discharge only after you finish all plan payments, which takes three to five years. Missing plan payments without seeking a modification can lead to dismissal or conversion to Chapter 7.
Tax and Credit Effects
Forgiven debt is normally taxable income. Bankruptcy is the major exception: debt discharged in a bankruptcy case is excluded from gross income under federal tax law, so you won’t owe tax on the forgiven amounts.18Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness You may still receive 1099-C forms from creditors reporting canceled debt; those amounts should be excluded on your return by filing IRS Form 982.
A bankruptcy filing stays on your credit report for up to 10 years from the filing date, whether Chapter 7 or Chapter 13.19Consumer Financial Protection Bureau. How Long Does a Bankruptcy Appear on Credit Reports Many people who file already have severely damaged credit from missed payments, collections, and judgments. The discharge stops the bleeding and gives you a fixed timeline for rebuilding.