When you hear the word “bankruptcy,” you probably imagine frightening scenarios such as automatic foreclosure or repossession. In reality, bankruptcy can actually help protect certain property from creditors while simultaneously eliminating many of your largest debts, giving you a clean slate. By lifting your debt burdens and granting you a fresh start, bankruptcy can also financially reposition you to start building good credit for your future.
While bankruptcy affords debtors numerous legal and financial benefits, it can also be a highly complex process fraught with potential for error. It is critically important that you have the benefit of skilled and experienced representation to guide you through the New Jersey bankruptcy process if you are considering filing for Chapter 7 or Chapter 13. Let the attorneys of Sadek & Cooper Law Offices put our years of experience handling thousands of bankruptcies to work on your Chapter 7 or Chapter 13 case. To get started with a free consultation, call our law offices at (856) 354-3310 today.
Should You File for Chapter 7 (Liquidation) or Chapter 13 (Reorganization)?
You are probably familiar with reports of businesses declaring Chapter 11 bankruptcy. For individuals, most bankruptcy cases fall into one of two categories: Chapter 7 bankruptcy, which is also called “liquidation” or “straight” bankruptcy, and Chapter 13, which is also known as “reorganization” or a “wage earner’s plan.” While both are ultimately designed to help the filer get overwhelming debt under control, these two unique chapters of bankruptcy involve very different procedures and requirements.
Chapter 7 is a relatively quick process, with most cases resolving in as little as four to six months. In Chapter 7 bankruptcy, an official known as a trustee, who is appointed by the bankruptcy court handling your case, will sell some of your property to help repay your creditors. However, you can protect much of your property by strategically utilizing exemptions, and in addition, many of your costliest debts will be wiped out at the end of your case.
Chapter 13 is a longer and more elaborate process, but for many debtors is the more constructive and appropriate option. Chapter 13 is called reorganization because it requires the filer to, with approval from the bankruptcy court, create a reorganization plan to pay off certain portions of certain debts. In exchange, the filer is allowed to keep their property, and when the case ends, the debtor is released from liability for various debts. Additionally, both types of bankruptcy share a feature called the “automatic stay,” which temporarily halts collection actions while the case is in progress.
Ultimately, there is no single answer about the “best” form of bankruptcy. It all depends on your income, your assets, and the goals you hope to achieve. Our knowledgeable and experienced bankruptcy lawyers in New Jersey can assess your resources and analyze your objectives to make a determination about whether Chapter 7 or Chapter 13 is the better financial fit for your needs.
Which Debts Are Eliminated When You Declare Bankruptcy in New Jersey?
Debts can be categorized in many different ways. One of the most important ways debts are categorized in a New Jersey consumer bankruptcy case is their designation as dischargeable or non-dischargeable.
Put simply, a dischargeable debt is a debt for which the filer’s liability can be eliminated when the bankruptcy is discharged: in short, a debt that can be wiped out upon completion of the bankruptcy. Conversely, a non-dischargeable debt is a debt for which the filer’s liability remains unaffected by bankruptcy, meaning he or she is still responsible for paying the debt after the case is over.
Fortunately, both forms of consumer bankruptcy treat most types of debt as dischargeable debt. A few major examples of dischargeable debt in a Chapter 7 or Chapter 13 New Jersey bankruptcy case include, but are not limited to, the following:
- Business Debt
- Credit Card Debt
- Medical Debt
- Past Due Rent
- Past Due Utility Bills
- Personal Loan Debt
- Social Security Overpayments
With narrow exceptions, the following debts are generally non-dischargeable in Chapter 7 or Chapter 13 cases in New Jersey:
- Alimony Debt
- Child Support Debt
- Student Loan Debt
- Tax Debt
South New Jersey Bankruptcy Attorneys Serving Atlantic, Camden, and Ocean County
Filing for bankruptcy in New Jersey doesn’t have to be a negative experience. On the contrary, bankruptcy can be the turning point that finally gives you the clean financial slate you have been dreaming of. For many New Jersey residents who feel the daily pressures of living with debt, declaring bankruptcy is the first step on the rewarding journey toward financial freedom and relief from stress and anxiety.
If you or one of your loved ones is worried about foreclosure, repossession, or other consequences of debt which has grown unmanageable, it may be time to speak with a qualified attorney about the benefits of filing for Chapter 13 or Chapter 7 bankruptcy in New Jersey. The attorneys of Sadek & Cooper Law Offices are ready to review your case in a free and confidential consultation to see if bankruptcy in New Jersey is a good fit for you. We can also assist you with various bankruptcy alternatives, such as debt consolidation, if we determine that neither Chapter 7 nor Chapter 13 is suited to addressing your financial resolutions.
The efficient, effective, and experienced bankruptcy lawyers of Sadek & Cooper Law Offices handle individual and joint filings under Chapter 7 and Chapter 13 throughout South Jersey, including but not limited to locations in Atlantic County, Burlington County, Camden County, Gloucester County, Ocean County, and Salem County. To talk about filing for bankruptcy in a free legal consultation, call our law offices today at (856) 354-3310.