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There are few things more overwhelming in life than facing large amounts of debt. If you are drowning in debt and aren’t sure when you’ll be able to breathe again, our experienced New Jersey bankruptcy attorney at the law office of Scott J. Goldstein can help. Our attorney will guide you through your options, explain how bankruptcy works and the different types of bankruptcy filings, and represent your best interests every step of the way. To learn more about New Jersey bankruptcy rules and whether filing for bankruptcy may be a good option for you, call Attorney Scott J. Goldstein today.
What Is Bankruptcy?
Bankruptcy is a legal, court-facilitated process wherein a debtor repays some or all of their debts or/and seeks relief from some or all of their debts. Because it is a legal process that is facilitated by the court, there are many rules and requirements associated with filing for bankruptcy. What’s more, the outcome of a bankruptcy case is legally binding. You may be required to repay some or all of your debts as ordered by the bankruptcy court; creditors are also obligated to forgive debts as ordered by a bankruptcy court.
Types of Personal Bankruptcy
If you are an individual who is thinking about filing for bankruptcy, it’s important that you know that there are two different common types of bankruptcy for individuals: Chapter 7 bankruptcy and Chapter 13 bankruptcy.
Chapter 7 bankruptcy. Chapter 7 bankruptcy, also called liquidation bankruptcy, is designed for debts who have limited assets and have limited income and therefore pass the “means test.” The means test is a way to determine whether the debtor has enough income to pay back a portion of their debts and should therefore enter into a repayment plan (via a Chapter 13 bankruptcy filing). Usually, if your household income is below the state’s median income, you will pass the means test though every case is unique.
In a Chapter 7 bankruptcy, your non-exempt assets will be liquidated, and the proceeds will be used to pay back your creditors to the extent possible. A Chapter 7 bankruptcy filing will remain on your credit report for 10 years.
- Chapter 13 bankruptcy. If you have the income to do so, filing for a Chapter 13 bankruptcy has some advantages over a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, also known as a wage-earner’s plan, you will enter into a repayment plan with your creditors that lasts for 3-5 years. At the conclusion of the repayment plan, your remaining debts will be forgiven. One of the biggest advantages of a Chapter 13 filing is that you typically get to keep more assets, including a home, than you might not be able to keep in a Chapter 7 filing. In addition, a Chapter 13 bankruptcy can allow you to fix problems that are not solveable in a Chapter 7 case, such as support arrears, tax arrears or arrears on a mortgage or a car. A Chapter 13 bankruptcy will stay on your credit report for seven years.
Do I Need to File for Bankruptcy?
If you are unsure about whether bankruptcy is right for you, it’s important to talk to a professional. Filing for bankruptcy is a huge decision that can have a big impact on your life. You should think about filing for bankruptcy if you have already exhausted other debt-relief options, including:
- Debt settlement. This process involves negotiating a settlement with your creditors in which you will pay them a single lump-sum payment in exchange for forgiveness of the remaining debt.
- Debt negotiation. Debt negotiation is similar to debt settlement. In some cases, you may be able to negotiate your debt and enter into a repayment plan at a lower interest rate, or a repayment plan that ultimately leads to you repaying a portion of the debt.
- Debt consolidation. Debt consolidation involves combining all of your debts into a single payment. This can improve debt management and may be available at a lower interest rate.
- Mortgage refinancing. If you are at risk of losing your home, you should talk to your mortgage lender about various options.
Why Work with a New Jersey Bankruptcy Attorney?
Bankruptcy can be an overwhelming legal process. Your attorney can help by explaining the bankruptcy types, determining your eligibility for bankruptcy, managing your bankruptcy filing, representing you at the bankruptcy hearing, and more. An experienced bankruptcy attorney can streamline the process and improve its outcome.
Call the Law Office of Scott J. Goldstein Today
At the Law Offices of Scott J. Goldstein, our New Jersey bankruptcy attorney is experienced and knowledgeable in the bankruptcy process. To learn more about filing for personal bankruptcy in New Jersey, call us today at 973-453–2838.