Filing for bankruptcy can feel overwhelming, especially when you’re already dealing with financial stress. At Macco & Corey P.C., we make the process as clear and manageable as possible. With over 60 years of combined experience, we’ve helped thousands of Long Islanders regain control through Chapter 7, Chapter 13, and other debt solutions. With the right strategy and guidance, you can move forward with clarity and confidence.
What Is Bankruptcy?
Bankruptcy is a legal process that provides relief to individuals and businesses who can no longer meet their debt obligations. When debts accumulate and income can’t keep up, bankruptcy offers a structured way to eliminate or reorganize debt under court supervision. The goal of bankruptcy is not to punish debtors, but to give them a second chance; something that’s clearly reflected in both the spirit and the structure of U.S. bankruptcy law.
Bankruptcy is governed by federal law, specifically the U.S. Bankruptcy Code, and administered through specialized federal bankruptcy courts. This means that the core bankruptcy rules are consistent across all states, but each state, including New York, has its own set of exemptions that determine what property you can keep.
Depending on your situation, you may be able to:
- Discharge unsecured debts like credit cards or medical bills
- Stop foreclosure and keep your home
- Halt vehicle repossession and wage garnishments
- Prevent creditor lawsuits and harassment
- Create a long-term repayment plan for priority debts
- Eliminate certain tax liabilities under specific conditions
Bankruptcy also puts an immediate stop to collections through what’s called the automatic stay. As soon as you file your bankruptcy petition, creditors are legally required to stop calling, mailing, suing, or garnishing your wages. This breathing room can be a lifeline for many families under pressure.
When Does Bankruptcy Make Sense?
Deciding whether bankruptcy is right for you depends on multiple factors, including:
- Your monthly income compared to your monthly debt payments
- The type of debts you owe (secured vs. unsecured, dischargeable vs. non-dischargeable)
- The value of your assets and whether they’re protected under New York’s exemption laws
- Whether you’re trying to eliminate debt or catch up on missed payments
- Your long-term financial goals, saving your home, keeping a vehicle, or getting a clean slate
At Macco & Corey P.C., we take the time to evaluate each client’s unique circumstances before recommending a course of action. Bankruptcy isn’t one-size-fits-all. For some, Chapter 7 may offer a quicker, cleaner break from debt. For others, Chapter 13 may be the best way to protect assets and catch up without losing everything they’ve worked hard to build.
The Role of a Bankruptcy Attorney
Filing bankruptcy without a lawyer (a process called “pro se”) is technically allowed, but not advisable. Bankruptcy is a legal proceeding involving complex rules, detailed paperwork, and strict deadlines. Missing a step can result in delays, dismissals, or loss of important legal protections.
At Macco & Corey P.C., our job is to make this process as smooth as possible. We’ll help you:
- Choose the right chapter for your needs
- Complete all required forms accurately
- Protect your assets using New York’s exemption laws
- Handle communications with the trustee and court
- Represent you at the 341 creditors’ meeting
- Negotiate repayment plans, if applicable
- Address objections from creditors or other parties
Most importantly, we’re here to stand by your side and ensure that you’re not facing this alone. Bankruptcy might seem like a last resort, but for many of our clients, it becomes the first step toward a more stable and empowered financial future.
Understanding Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common type of bankruptcy for individuals in the U.S. It’s designed for people who are struggling with unmanageable debt and limited income, giving them the chance to wipe the slate clean and get a fresh financial start.
Often referred to as “liquidation bankruptcy,” Chapter 7 allows the bankruptcy court to eliminate most of your unsecured debts. These typically include:
- Credit card balances
- Medical bills
- Personal loans
- Past-due utility bills
- Collection accounts
- Deficiency balances from repossessed vehicles
However, despite the word “liquidation,” most people who file Chapter 7 don’t lose their homes, cars, or personal possessions. This is because federal and New York State laws provide exemptions that protect certain categories of property. For example, you may be able to keep your car, retirement accounts, household goods, and a certain amount of home equity, depending on your unique financial situation.
Who Qualifies for Chapter 7?
Eligibility for Chapter 7 is primarily determined by the means test, which evaluates your household income and expenses. If your income is below the state median based on your household size, you generally qualify.
If your income is above the median, you’ll have to complete a more detailed calculation comparing your disposable income to allowed expenses. If your remaining income is low enough, you may still be eligible.
Other Chapter 7 qualifications include:
- You haven’t filed for Chapter 7 in the past eight years
- You haven’t filed for Chapter 13 in the past six years (in some cases)
- You’ve completed an approved credit counseling course within 180 days of filing
- You’re filing in good faith and disclosing all assets and liabilities truthfully
At Macco & Corey P.C., we guide every client through the means test and help determine whether Chapter 7 is not only available but also advisable for their specific circumstances.
What’s the Process Like?
The Chapter 7 process typically takes about three to six months from start to finish. First, you’ll complete a brief credit counseling course from an approved provider. Then, we’ll help you file your petition, which includes all your financial details. Once filed, an automatic stay goes into effect, stopping collections, lawsuits, and wage garnishments. A court-appointed trustee will review your case and oversee a short meeting known as the 341 meeting of creditors, where you’ll answer basic questions under oath. If you have non-exempt assets (which is rare), the trustee may liquidate them to repay creditors. Otherwise, your case moves toward completion. Within about two to three months of that meeting, you’ll receive a discharge order, wiping out most unsecured debts and giving you a fresh financial start.
Benefits of Chapter 7 Bankruptcy
For many clients, the benefits of Chapter 7 are immediate and profound:
- Fast debt relief – Most cases are completed within months, not years.
- No repayment plan – You’re not obligated to make ongoing payments once debts are discharged.
- Powerful legal protection – The automatic stay halts collections, garnishments, and creditor harassment.
- Emotional relief – For many clients, bankruptcy brings an immediate sense of peace and a renewed sense of control over their lives.
Drawbacks to Consider
Of course, Chapter 7 isn’t ideal for everyone. Some things to keep in mind:
- Non-exempt assets may be sold – If you own property above exemption limits, it could be liquidated.
- Doesn’t cover all debts – Student loans, child support, alimony, and certain tax debts usually remain.
- Credit impact – The filing stays on your credit report for 10 years, though many clients begin rebuilding credit quickly with the right strategies.
- No catch-up options – Chapter 7 doesn’t allow you to cure mortgage or car loan arrears. If you’re behind on these payments and want to keep the asset, Chapter 13 might be a better option.
Understanding Chapter 13 Bankruptcy
Chapter 13 bankruptcy is often referred to as a “wage earner’s plan” because it’s designed for individuals with a steady income who want to repay part or all of their debts through a court-approved plan. Instead of liquidating assets like in Chapter 7, Chapter 13 allows you to reorganize your debt into manageable monthly payments over three to five years.
The core idea is simple: if you earn enough to pay your living expenses and still have some money left over each month, Chapter 13 can help you catch up on delinquent accounts, protect your assets, and reduce or eliminate some debts along the way.
This type of bankruptcy is especially helpful for people who:
- Are behind on mortgage payments but want to keep their home
- Owe back taxes or child support that can’t be wiped out in Chapter 7
- Have assets they would lose in a Chapter 7 liquidation
- Want to consolidate debt into a single, predictable monthly payment
- Need time to repay creditors in a structured way
Who Qualifies for Chapter 13?
To file for Chapter 13, you must show that you have regular income and the ability to make monthly payments under a proposed plan. This doesn’t mean you have to be employed full-time; you may qualify with income from self-employment, Social Security, retirement, or disability benefits.
There are also debt limits for Chapter 13. As of recent figures, your unsecured debts must be less than $465,275, and your secured debts (like mortgages or car loans) must be below $1,395,875. These limits are adjusted periodically, so it’s essential to verify the most up-to-date numbers when filing.
Other eligibility requirements include:
- You must be current on your tax filings.
- You cannot have had a bankruptcy case dismissed within the last 180 days due to willful failure to appear or comply with court orders.
- You must complete a credit counseling course before filing.
At Macco & Corey P.C., we carefully review each client’s financial picture to determine whether Chapter 13 is feasible and beneficial, and we help create a realistic plan that aligns with your income and obligations.
How the Process Works
Chapter 13 takes longer than Chapter 7, but it provides powerful tools to reorganize debt while protecting your assets. The process begins with a short credit counseling course, followed by filing your bankruptcy petition and a proposed repayment plan. As soon as you file, an automatic stay kicks in, halting collections, foreclosures, and lawsuits. Next, you’ll attend a brief 341 meeting where a trustee reviews your plan. A bankruptcy judge must then approve the plan, and if necessary, adjustments are made to confirm it. Once approved, you’ll make monthly payments to the trustee for a period of three to five years. After completing the plan, any remaining eligible debt is discharged, giving you a clean financial slate.
Benefits of Chapter 13
Chapter 13 offers several advantages that can make it the right choice for many individuals and families:
- Save your home from foreclosure – You can stop foreclosure proceedings and catch up on missed mortgage payments over time.
- Keep your property – Unlike Chapter 7, you won’t have to worry about losing valuable non-exempt assets.
- Repay non-dischargeable debts – Priority debts, such as child support, alimony, and tax debt, can be included in your plan and paid off gradually.
- Consolidate debt – Instead of juggling multiple bills, you make one monthly payment based on your income and living expenses.
- Protection from creditors – As long as you comply with your plan, creditors cannot take collection actions against you.
Challenges to Keep in Mind
While Chapter 13 provides powerful tools, it’s not without challenges:
- Long-term commitment – You’ll need to stay on budget and make regular payments for up to five years.
- Income requirements – If your income drops or becomes unstable, your case may need to be modified or dismissed.
- Plan approval isn’t guaranteed – The court must be satisfied that your plan is feasible and complies with the law.
- Credit reporting – A Chapter 13 filing stays on your credit report for seven years, though many filers can still rebuild credit during or after their case.
Chapter 7 vs. Chapter 13: Choosing the Right Bankruptcy Path
While both Chapter 7 and Chapter 13 bankruptcy aim to provide financial relief, they do so in different ways. Chapter 7 offers a faster route to debt discharge through liquidation, which is best suited for individuals with limited income and few assets. Chapter 13, on the other hand, allows individuals with steady income to catch up on missed payments and reorganize their debt over time, making it ideal for those who want to protect their home or car.
At Macco & Corey P.C., we help clients weigh the pros and cons of each option, considering factors such as income, debt type, asset protection, and long-term goals, to ensure they choose the path that aligns best with their financial recovery plan.
How Macco & Corey P.C. Can Help You Navigate Bankruptcy
Whether you’re just starting to explore your options or are already overwhelmed by debt collectors, working with a qualified bankruptcy attorney can make all the difference. At Macco & Corey P.C., we believe in more than just filing paperwork. We believe in giving our clients the knowledge, support, and strategy they need to reclaim their financial future.
Personalized Bankruptcy Guidance
Every client comes to us with a unique story—job loss, medical bills, divorce, business failure, or simply years of trying to stay afloat. That’s why we offer personalized bankruptcy services and planning rather than a one-size-fits-all approach. During your consultation, we’ll take a detailed look at:
- Your income and employment status
- The types of debt you’re facing (credit cards, taxes, mortgage, etc.)
- Your assets and property
- Any legal actions currently in progress (lawsuits, garnishments, repossessions)
If bankruptcy is the right choice, we’ll guide you through every stage with compassion, clarity, and unmatched legal skill.
Full-Service Bankruptcy Support
At Macco & Corey P.C., we provide comprehensive legal support at every stage of your bankruptcy case. From preparing your petition and calculating exemptions to representing you in court and negotiating repayment plans, we handle the details so you can focus on moving forward. We also help protect your assets, address creditor concerns, and offer guidance on rebuilding your credit after discharge, because our commitment doesn’t end when your case does.
Frequently Asked Questions About Bankruptcy
Will I lose my home or car if I file for bankruptcy?
Not necessarily. Many Chapter 7 filers retain their home and vehicle by utilizing New York’s generous exemption laws, especially if they’re current on their payments. In Chapter 13, even if you’re behind, you can catch up over time and avoid foreclosure or repossession.
Can bankruptcy stop creditor harassment?
Yes. The moment your case is filed, the automatic stay takes effect. This court order immediately stops all collection calls, wage garnishments, foreclosure actions, and pending lawsuits. Creditors who violate the stay can face legal penalties.
How long does bankruptcy stay on my credit report?
Chapter 7 remains on your credit report for 10 years, while Chapter 13 stays for 7 years.
Will everyone know I filed?
Bankruptcy filings are public records, but unless someone is specifically looking for your name in court dockets, it’s unlikely they’ll find out.
Can I file without a lawyer?
You can, but it’s a risky move. Bankruptcy law is highly technical, and mistakes, such as undervaluing assets or missing a filing deadline, can result in delays, dismissals, or even the loss of property.
What if I filed before?
You may still be eligible, depending on the type of bankruptcy you previously filed and how long it’s been since that discharge. We can review your case history and advise on your eligibility.
Take the First Step Toward Financial Freedom
You don’t have to live under the weight of debt forever. Bankruptcy may not be an easy choice, but it can be a powerful one. Whether you’re considering Chapter 7, Chapter 13, or just trying to make sense of your options, we’re ready to sit down with you, answer your questions, and develop a plan that works.
Contact Macco & Corey P.C. today to schedule a confidential consultation and take control of your financial future.