Bankruptcy FAQ

Will I lose my house?

Almost certainly not. The New York state homestead exemption protects approximately $204,000 of equity (current figure, varies by county) in a primary residence, doubled to roughly $408,000 for married couples filing jointly. Most New York homeowners have less equity than that and keep the home as a matter of course. In Chapter 13, even debtors who are behind on the mortgage keep the home by curing the arrears through the plan. See our exemptions page for the full breakdown.

Will I lose my car?

Almost always no. New York's motor vehicle exemption protects approximately $5,150 of equity in one vehicle ($4,800 under the federal scheme). For a financed car, the analysis runs to equity above the loan balance, which is usually zero. We typically reaffirm the loan in Chapter 7 (keeping the car and continuing to pay) or pay through the plan in Chapter 13.

Will I lose my retirement accounts?

No. Qualified retirement assets — 401(k), 403(b), 457, traditional pensions, IRAs, Roth IRAs — are fully exempt up to a high statutory cap. Do not withdraw retirement funds to pay creditors before filing. Retirement assets that would be exempt in bankruptcy are often less protected once they have been distributed.

Will my employer find out?

Unlikely. Bankruptcy filings are public records, but employers do not routinely check the bankruptcy docket. Exceptions: jobs that require security clearances, some financial services positions, and certain government positions involve background checks that surface filings. We talk through employment concerns at the consultation.

Can my employer fire me for filing bankruptcy?

No. Section 525 of the Bankruptcy Code prohibits an employer from terminating an employee solely because of a bankruptcy filing. Government employers face additional anti-discrimination protections. Private employers cannot refuse to hire someone based on a discharged bankruptcy alone, though they can consider broader credit history.

Will my spouse have to file too?

Not necessarily. Individuals can file separately even when married. Whether to file jointly depends on the spouses' separate property, debts, and exposure. Joint filing is often more economical for couples with shared debt, but it can hurt the means test for couples with a high-earning spouse. We run the comparison at the consultation.

How much does bankruptcy cost?

Court filing fees:

• Chapter 7: $338
• Chapter 13: $313
• Chapter 11: $1,738 (regular) or $1,738 (Subchapter V)

Plus credit counseling and financial management course fees (typically $25-$50 each). Attorney fees vary by case complexity. Chapter 7 attorney fees in New York typically range from $1,500 to $3,500 for routine consumer cases. Chapter 13 attorney fees are higher and a portion can be paid through the plan rather than up front. Chapter 11 fees are case-specific. We quote an all-in fee at engagement.

How long does the process take?

Chapter 7: roughly four to six months from filing to discharge. Chapter 13: three to five years (the plan period). Chapter 11 / Subchapter V: variable, typically six to twelve months to plan confirmation.

What debts cannot be discharged?

The main non-dischargeable categories:

• Domestic support obligations (child support and most spousal support).
• Most student loans (absent an undue-hardship adversary proceeding).
• Recent income taxes and trust-fund taxes.
• Debts for fraud, embezzlement, or willful and malicious injury.
• Criminal restitution and most government fines.
• Debts not listed on the schedules in some circumstances.

What happens to my credit score?

By the time someone is filing bankruptcy, their score has usually already been damaged by delinquencies and charge-offs. The filing itself rarely lowers the score further, and most clients see scores climb within months of discharge. See rebuilding credit after bankruptcy for the longer answer.

How long does bankruptcy stay on my credit report?

Chapter 7: up to ten years from the petition date. Chapter 13: up to seven years. The impact diminishes sharply over time with good post-bankruptcy credit behavior.

Can I file bankruptcy without a lawyer?

You can. It is rarely a good idea outside the simplest no-asset Chapter 7. The schedules are unforgiving, the look-back periods are long, the exemption choice matters, and an error in the petition can lose property the debtor would otherwise have kept. We have inherited cases from pro se filers and the cleanup is almost always more expensive than getting it right the first time.

What is the automatic stay?

The automatic stay is a federal injunction that takes effect the moment a bankruptcy petition is filed. It halts virtually all collection activity — calls, lawsuits, judgments, garnishments, levies, repossessions, foreclosure sales. Creditors who violate the stay can be sanctioned. See our creditor harassment page for details.

Can I file again later?

Yes, with timing limits:

• Chapter 7 to Chapter 7: 8 years between filing dates.
• Chapter 13 to Chapter 13: 2 years between filing dates.
• Chapter 7 to Chapter 13: 4 years from prior Chapter 7 filing to current Chapter 13 filing for a discharge.
• Chapter 13 to Chapter 7: 6 years, with exceptions.

Can I keep some credit cards?

Generally no. All credit cards must be listed in the schedules, and once the issuer receives notice of the bankruptcy, the card is almost always closed. Cards with zero balances are sometimes left open at the issuer's discretion. You will be able to open new accounts after discharge.

What if I am embarrassed about filing?

Bankruptcy is a legal tool, not a moral failing. Roughly one in every 270 American households files bankruptcy each year. The Bankruptcy Code exists precisely because Congress recognized that financial circumstances can outrun any individual's ability to recover without legal protection. Albert has filed cases for doctors, lawyers, executives, small business owners, and W-2 employees of every income level. There is no profile that "should not" file.