The Bankruptcy Process in New York

This page walks through what a bankruptcy case actually looks like, step by step, from the first consultation through the discharge order. The mechanics differ slightly between Chapter 7, Chapter 13, and Chapter 11, but the major milestones are the same.

Step 1 - Initial Consultation

The consultation is free and confidential. You will explain your situation, we will ask the questions we need to ask, and at the end of the meeting you will have a clear recommendation: which chapter (if any) is the right fit and what the case will cost. We do not push clients toward filings. If we think you don't need to file, we tell you.

Step 2 - Document Collection

Once we are engaged, we send a document checklist. The list typically includes:

Federal and state tax returns for the last two to four years.
Pay stubs covering the last six months.
Bank statements covering the last six months.
Profit-and-loss statements for any self-employment activity.
Mortgage statements and any foreclosure paperwork.
Vehicle loan statements and titles.
Statements for any retirement accounts.
A list of all creditors with addresses and account numbers.
Court paperwork for any pending or recent lawsuits, garnishments, or judgments.
Title documents for any real estate you own.
Most recent appraisal or market analysis for any real estate.

Step 3 - Pre-Filing Credit Counseling

Federal law requires every individual debtor to complete a credit counseling briefing from a court-approved provider within 180 days before the petition is filed. The briefing is short (typically 60 to 90 minutes) and inexpensive (typically $25 to $50). It can be done online. We provide a list of approved providers at the engagement.

Step 4 - Petition Preparation

The bankruptcy petition is a roughly 50-page package consisting of:

The petition. A short, signed cover document.
Schedules A through J. A detailed inventory of assets (A and B), secured claims (D), unsecured priority and non-priority claims (E and F), executory contracts and leases (G), co-debtors (H), and current income and expenses (I and J).
Statement of Financial Affairs. Disclosures about income, transfers, payments to creditors, lawsuits, and other financial history covering the past one to four years depending on the question.
Means test calculation (for Chapter 7 and Chapter 13).
Statement of Intention (for Chapter 7).
Chapter 13 plan (for Chapter 13 cases).

Albert personally prepares and reviews every petition. Before filing, we walk through the entire package with you line by line so that the schedules accurately reflect your situation and so that nothing is missed.

Step 5 - Filing

The petition is filed electronically with the U.S. Bankruptcy Court for the appropriate district — the Southern District of New York for clients in Manhattan, the Bronx, and Westchester; the Eastern District for clients in Brooklyn, Queens, Staten Island, Nassau, and Suffolk. The filing fee is paid online. The filing is timestamped to the second.

The moment the filing posts, the automatic stay attaches. Every creditor on the matrix gets notice within a few days. Collection activity stops.

Step 6 - Trustee Appointment and 341 Meeting

The U.S. Trustee's office assigns a Chapter 7 trustee (in Chapter 7 cases) or a standing Chapter 13 trustee (in Chapter 13 cases). The trustee reviews the petition and conducts the meeting of creditors under section 341.

The 341 meeting is held roughly 30 to 45 days after filing. It is conducted by the trustee, not by a judge, and creditors rarely attend in consumer cases. The trustee places the debtor under oath and asks a standard set of questions: identity verification, accuracy of the schedules, completeness of disclosures, transfers, anticipated tax refunds, and similar topics. Most consumer 341 meetings last under ten minutes. Albert attends with you.

Step 7 - Trustee Investigation (Chapter 7)

In Chapter 7, the trustee determines after the 341 meeting whether there are non-exempt assets to administer. In most consumer cases the trustee files a "no asset" report and the case proceeds to discharge. If there are non-exempt assets, the trustee will administer them — either by selling property, by allowing the debtor to buy back the trustee's interest, or by abandoning the property if it is not worth pursuing.

Step 8 - Plan Confirmation (Chapter 13)

In Chapter 13, the trustee and any objecting creditors review the plan. A confirmation hearing is held roughly 45 to 90 days after filing. If the plan satisfies the statutory requirements (best interests, disposable income, feasibility, good faith), the court enters a confirmation order and the plan binds creditors. Plans frequently require one or more amendments before confirmation.

Step 9 - Financial Management Course

Every individual debtor must complete a financial management course after filing. Like the pre-filing briefing, it is short, inexpensive, and can be done online. We provide the list of approved providers and confirm completion.

Step 10 - Discharge

In Chapter 7, the discharge is entered roughly 60 to 90 days after the 341 meeting, absent objections or adversary proceedings. In Chapter 13, the discharge is entered after the debtor completes all plan payments — three to five years from filing. The discharge order is a permanent injunction against any further collection of the discharged debts.

Step 11 - Case Closing

After the discharge, the case is closed administratively. The case file remains a public record, and the discharge remains on credit reports for up to ten years (Chapter 7) or seven years (Chapter 13) from the filing date.

How Long Does the Whole Thing Take?

Chapter 7: About four to six months from filing to discharge.
Chapter 13: Three to five years — that is the length of the repayment plan.
Chapter 11 / Subchapter V: Variable. Subchapter V plans are required to be filed within 90 days of the petition date. Confirmation typically follows within six to twelve months.

Filing Fees and Fee Waivers

The U.S. Bankruptcy Court charges a filing fee at the time the petition is submitted:

Chapter 7: $338
Chapter 13: $313
Chapter 11 (including Subchapter V): $1,738

Chapter 7 filers whose household income is below 150% of the federal poverty line can apply for a fee waiver under 28 U.S.C. § 1930(f). Filers who do not qualify for a waiver can pay the fee in up to four installments under Federal Rule of Bankruptcy Procedure 1006(b). Credit counseling and financial management course fees run another $25 to $50 each, with sliding-scale or fee-waiver options available through most approved providers.

The Automatic Stay in Detail

The automatic stay under 11 U.S.C. § 362(a) is one of the most powerful protections in federal law. The moment your petition is filed, virtually every form of collection activity is enjoined as a matter of statute, without any need for a separate court order. The stay reaches:

Lawsuits and the entry, enforcement, or collection of judgments.
Wage garnishments, bank levies, and CPLR 5222 restraining notices.
Foreclosure sales, repossessions, and most non-judicial collection efforts.
Demand letters, dunning calls, and other direct creditor contact.
Most tax assessments and collection efforts (though audits and certain non-collection IRS actions can continue).

The stay has exceptions — criminal proceedings, domestic-support actions, and certain regulatory enforcement actions are not stayed under § 362(b). It can also be modified on motion for cause, most commonly by a secured creditor seeking relief to proceed with a foreclosure on collateral that lacks equity. Willful violations of the stay expose creditors to actual damages, attorney's fees, and in appropriate cases punitive damages under § 362(k).

Adversary Proceedings

An adversary proceeding is a separate lawsuit filed within the main bankruptcy case. The most common categories in consumer cases are:

Section 523 non-dischargeability complaints, usually filed by credit card issuers alleging recent fraudulent charges or by ex-spouses asserting that an obligation arose from divorce-related fraud or property settlement.
Section 727 objections to discharge, filed by the trustee or a creditor where there is evidence of false oaths, concealment of assets, destruction of records, or failure to explain a loss of assets.
Section 522(f) lien-avoidance motions, used to strip judgment liens that impair an exemption.
Adversary proceedings to determine the dischargeability of student loans under the Brunner "undue hardship" standard.

Most consumer Chapter 7 cases proceed to discharge without any adversary proceeding. When one is filed, it is litigated on a compressed schedule with deadlines set by Federal Rules of Bankruptcy Procedure 4007 and 4004.

Reaffirmation, Redemption, and Surrender

For each secured debt, a Chapter 7 debtor must file a Statement of Intention under § 521(a)(2) within 30 days of the petition. The options are to reaffirm, redeem, or surrender the collateral.

Reaffirmation — a new contract under § 524(c) under which the debtor agrees to remain personally liable. Used most often for car loans on vehicles the debtor wants to keep.
Redemption — a lump-sum payment of the collateral's current value under § 722. Useful when a car is worth far less than the loan balance and the debtor has the cash or a third-party lender to fund the buyout.
Surrender — turning the collateral over to the lender. The personal liability is discharged.

Post-Discharge Cleanup

The discharge order is broad but not self-executing. Creditors occasionally continue collection efforts after discharge, either through error or by deliberate violation of the discharge injunction. Liens on real estate survive discharge unless avoided, and credit reports occasionally continue to show discharged debts as past due. We help clients address these issues by:

Sending the discharge order to creditors that continue to collect, with a demand to cease under § 524(a).
Filing motions to reopen the case and avoid judgment liens on real estate under § 522(f) where the lien was missed during the original case.
Disputing inaccurate post-discharge credit reporting with the three major bureaus under the Fair Credit Reporting Act.
Pursuing damages for willful discharge-injunction violations under § 524 and applicable case law.

For more on individual chapters, see Chapter 7, Chapter 13, and Chapter 11. For questions specific to your situation, call 212-233-1233.