Welcome to Aronow Law, P.C.
At Aronow Law P.C., we recognize that financial hardship can affect anyone. Whether caused by job loss, medical expenses, or other financial challenges, bankruptcy is a legal tool — not a failure. Our experienced bankruptcy attorneys help clients determine whether Chapter 7 bankruptcy or Chapter 13 bankruptcy is the best fit for their situation. We guide you through every step of your bankruptcy filing, ensuring full compliance with bankruptcy law while protecting what matters most.
Understanding Bankruptcy Options
The U.S. Bankruptcy Code provides several forms of relief, but for most individuals, the choice is between Chapter 7 and Chapter 13.
- Chapter 7 Bankruptcy: Also known as “liquidation,” it eliminates most unsecured debts quickly, often in a few months.
- Chapter 13 Bankruptcy: A “reorganization” option that allows you to repay part of your debts through a structured 3–5 year plan while keeping your property.
Both stop collections, garnishments, and lawsuits immediately through the automatic stay.
Eligibility: Who Qualifies for Each Chapter
Chapter 7 bankruptcy is income-based and requires passing the means test:
- If your income is below the New York state median, you generally qualify.
- If it’s higher, you can still qualify by deducting certain living expenses to determine your disposable income.
Chapter 13 bankruptcy is available to individuals with regular income, including wages, self-employment, or retirement benefits. It’s best suited for people who want to keep assets like a home or car and are willing to commit to a repayment plan.
What Debts Can Be Discharged
Both chapters discharge most unsecured debts, such as:
- Credit card debt
- Medical bills
- Personal loans
Certain debts cannot be discharged, including:
- Child or spousal support
- Most tax debts
- Criminal fines or restitution
- Most student loans
However, Chapter 13 allows you to repay priority debts (like taxes or support arrears) through your plan, often with reduced penalties or interest.
Chapter 7 Bankruptcy: Quick Relief and a Clean Slate
Chapter 7 provides immediate debt relief and is ideal for individuals with lower income and few non-exempt assets. After filing, collections stop, and a bankruptcy trustee reviews your case.
Despite being called a “liquidation,” most Chapter 7 filers keep all their assets thanks to New York’s generous bankruptcy exemptions, which protect:
- Home equity up to a certain amount
- A modest vehicle
- Personal belongings and household goods
- Qualified retirement accounts and public benefits
If you can’t afford to keep a particular property, you can surrender it and discharge the debt. Or, through redemption, you can pay the property’s current value and erase the remaining balance.
Within months, eligible debts are discharged, freeing you from financial burdens and giving you a genuine fresh start.
Chapter 13 Bankruptcy: Protecting Your Home and Assets
Chapter 13 is designed for individuals with a steady income who need to reorganize their debt while retaining their assets. It lets you create a repayment plan lasting three to five years based on your income, expenses, and disposable income.
This option helps you:
- Catch up on missed mortgage or car payments
- Prevent foreclosure or repossession
- Pay off back taxes and support arrears
- Restructure secured debts through a cramdown or lien stripping
Unlike Chapter 7, Chapter 13 allows you to keep all property, including non-exempt assets, as long as your plan passes the “best interests” test — meaning unsecured creditors receive at least as much as they would under Chapter 7.
When Chapter 13 Wins — Even If You Qualify for Chapter 7
Even if you pass the means test for Chapter 7, Chapter 13 may be the better option when you need to:
- Catch up on mortgage or car arrears that have accumulated over several years.
- Protect valuable assets beyond exemption limits.
- Shield co-signers through the co-debtor stay (unique to Chapter 13).
- Repay tax debts or other priority obligations under court supervision.
For example:
- A renter with only a credit card and medical debt may benefit most from Chapter 7.
- A homeowner facing foreclosure may need Chapter 13 to stay in their home.
- A retiree with significant home equity can use Chapter 13 to protect their house while repaying only a portion of their debt.
The “Best Interests” and Feasibility Tests
Your Chapter 13 plan must meet two standards:
- Best Interests Test: Unsecured creditors must receive at least as much as they would in a Chapter 7 case.
- Feasibility Test: Your income must be sufficient to support consistent, affordable monthly payments to complete the plan successfully.
Our firm carefully calculates both before filing to ensure your plan is approved and your assets stay protected.
Co-Signers, Cars, and Collateral
- Chapter 13 Co-Debtor Stay: Protects co-signers on consumer debts while your plan pays the claim.
- Reaffirmation (Chapter 7): You can reaffirm certain loans, such as a car, to keep making payments and retain the property.
- Redemption (Chapter 7): Pay the current market value in one lump sum to discharge the remaining balance.
- Cure in Chapter 13: Catch up on missed car or mortgage payments through your plan — often more affordable than replacement or refinancing.
Exemptions and Property Protection in New York
New York lets filers choose between state and federal exemptions, depending on which offers better protection for your property.
- State exemptions often protect higher home equity.
- Federal exemptions can better protect savings, vehicles, or “wildcard” assets.
We analyze your property, title structure, and debts — including tenancy by the entirety if you’re married — to help maximize protection.
Managing Taxes, Support, and Other Special Debts
Not all debts are treated equally:
- Support arrears: Not dischargeable but can be repaid through Chapter 13.
- Recent taxes: Can be repaid over time under court protection, preventing new penalties.
- Older income taxes: May qualify for discharge depending on when returns were filed and assessed.
We review every debt type to determine what’s dischargeable, what must be repaid, and how to handle each efficiently.
How Bankruptcy Affects Your Credit
Both chapters appear on credit reports (10 years for Chapter 7, 7 years for Chapter 13), but your credit score can recover much sooner. Many clients see improvement within a year because bankruptcy resets their debt-to-income ratio and clears collection accounts. Regular plan payments under Chapter 13 or responsible new credit use after Chapter 7 both help rebuild credit over time.
Why Choose Aronow Law P.C.
Aronow Law P.C. provides experienced legal counsel for all bankruptcy cases in New York. We handle the complex bankruptcy forms, interact with the bankruptcy court, and design strategies that secure debt relief and long-term stability. Whether you need immediate discharge under Chapter 7 or structured recovery under Chapter 13, our attorneys ensure your rights and assets are protected every step of the way.
Book Your Free Consultation Today!
Take the first step toward financial freedom. Aronow Law P.C. is here to help you stop collections, protect your property, and find lasting debt relief.
Contact us today to schedule your free consultation and start rebuilding your financial future.
Frequently Asked Questions
When should I pick Chapter 13 even if I qualify for Chapter 7?
If you’re behind on your mortgage or car loan, want to protect valuable assets, or need to catch up on taxes or support payments, Chapter 13 offers more control and protection.
What is the “best interests” test in Chapter 13?
Your plan must pay unsecured creditors at least what they’d receive in a Chapter 7 liquidation. We calculate this before filing to make sure your plan meets all legal standards.
How does Chapter 13 stop foreclosure?
Once you file, the automatic stay halts foreclosure proceedings. You can then repay arrears through your 3–5 year plan while staying current on new payments.
Can I keep my car if I’m behind on payments?
Yes. Chapter 13 allows you to catch up over time, and in some cases, cram down the balance to the car’s current value. Chapter 7 allows you to keep your car if the payments and equity are within exemption limits or if you redeem it by paying the fair market value.
Will bankruptcy affect my co-signer?
Chapter 13 includes a co-debtor stay, which pauses collection actions against co-signers while you’re in the repayment plan. Chapter 7 doesn’t offer that protection.
Should I use New York or federal exemptions?
It depends on your assets. New York exemptions may offer more protection for home equity, while federal exemptions are more beneficial for those with vehicles or personal savings. Our attorneys analyze both to maximize your safety.
Can I convert from Chapter 13 to Chapter 7 if my income changes?
Yes. If your financial situation worsens and you can no longer afford plan payments, you may be able to convert from Chapter 13 to Chapter 7. This allows you to discharge eligible debts sooner, but the court will review your income, expenses, and nonexempt assets before approving the conversion.
How soon can I rebuild my credit after bankruptcy?
Many people begin rebuilding credit immediately after discharge. By making on-time payments, keeping credit use low, and monitoring your credit reports, you can often qualify for new credit or loans within one to two years. Bankruptcy gives you a clean foundation to rebuild responsibly.
