This type of bankruptcy is considered to be a “fresh start” because you can wipe out your debts and start anew. Chapter 7 is a liquidation bankruptcy. Should you decide to file for chapter 7 bankruptcy, a trustee will collect all of your assets and sell any that are not exempt. Our attorney is aware of the exemptions in New York State and under federal law.
After the sale of all non-exempt assets, the proceeds are distributed to your creditors with a commission taken by the trustee for carrying out the distribution. Keep in mind that this type of bankruptcy will only wipe out debts from unsecured assets. Secured assets, like your home and vehicle (assuming they are not paid off), will still have their loans attached to them. However, as long as you keep up with the payments for these loans, you should be able to keep the property.