Mount Holly, NJ Bankruptcy Lawyer
Consumer bankruptcy is more common in Mount Holly than you might think. People of every economic background face hardships now and then. If someone loses their job or incurs an unexpected medical expense, they can easily find themselves behind in their monthly bills. Because of much of the misinformation and misconceptions surrounding bankruptcy, many people do not consider it a viable option when dealing with their financial problems. However, bankruptcy was designed to help individuals get a fresh financial start. It was not meant to punish a person already overwhelmed with debt.
However, filing for consumer bankruptcy can be a confusing and complex process. The Mount Holly bankruptcy lawyers at Young, Marr & Associates have spent 20 years filing thousands of cases, giving us a thorough and intimate understanding of both federal and New Jersey bankruptcy law. We know how to maximize exemptions, protect assets, end creditor harassment, erase debts, and obtain discharges.
Why Should You File for Bankruptcy?
Bankruptcy may not be appropriate for everyone. For example, if you are struggling with debt primarily due to child support payments, bankruptcy is not going to offer relief, because child support debts are non-dischargeable under federal bankruptcy law. An experienced bankruptcy lawyer can help to evaluate whether bankruptcy is an appropriate recourse for you. Some of the most common reasons people in New Jersey opt to file for bankruptcy include:
- Relief from dischargeable debt (medical bills, utility bills, credit card debt, personal loans)
- Cessation of wage garnishment
- Banishing creditors from constant harassment
- Delaying foreclosure and eviction actions
- Preventing repossession of vehicles
Our experienced Mount Holly bankruptcy will thoroughly review your financial situation to help determine if filing for bankruptcy would provide the relief your need. Additionally, we will assist you in picking the type of bankruptcy that works best for you. In many cases, there might be several benefits available – including some that are not readily apparent.
Do You Need an Attorney to File for Bankruptcy in NJ?
Technically, people who wish to file for bankruptcy may do so independently, without hiring the services of a bankruptcy lawyer, in what is referred to as a pro se filing. While pro se filings may be legal, they are not particularly prudent, for several reasons. Bankruptcy law is extremely dense with financial and legal jargon. The procedure is time-sensitive and missing a deadline could ruin an entire case. If you make an error in filing, you provide the wrong documents, or you omit crucial information, your case could be dismissed.
Additionally, bankruptcy is more than the initial filing. If you file for Chapter 13, you will have to propose a bankruptcy plan that complies with the Bankruptcy Code, review proofs of claim, and deal with post-filing motions. Furthermore, it is not often obvious whether to choose the federal or state exemptions without the input of our experienced Mount Holly attorney.
How Does the Bankruptcy Process Work in New Jersey?
In conjunction with the overarching federal laws, each state also has its own rules governing the bankruptcy process, meaning the process of filing for consumer bankruptcy in New Jersey is different than it would be in another location. Here is how the bankruptcy process works in New Jersey.
First, it is important to know that prior to filing for a New Jersey bankruptcy, you must receive credit counseling through an approved credit counseling agency. Credit counselors can offer guidance about budgeting, money management, and of course, your credit. You will not be allowed to file for bankruptcy until you can provide proof of completion of a credit counseling course within the past six months. If you try filing without a certificate of completion or a waiver, your case will be dismissed. This could be disastrous if you were trying to prevent a sheriff sale.
Schedules and Documents
Once you complete credit counseling, you may file a petition for bankruptcy, which includes multiple forms. Whether you file Chapter 7 or Chapter 13, much of the required paperwork and documents are the same. In your bankruptcy paperwork, you will be required to disclose all of your secured and unsecured debts, your assets, expenditures, income, and other financial information. In addition to the federal forms, you may also need to supply local forms that are specific to a jurisdiction.
To prepare the bankruptcy schedules, you will need numerous financial documents, including six months of pay stubs or proof of other income, bank statements, mortgage statement, proof of homeowners and car insurance, and four years of federal tax returns. In fact, if you failed to file your federal or state tax returns for the previous four years, your case will likely be dismissed.
The type of bankruptcy you could file for is often determined by the Means Test, which calculates your median income. Our office will take the income you earned during the six months before the filing date and deduct a combination of actual expenses and federal deductions to determine your disposable monthly income. If this amount is below the family median for your geographical area, you will qualify for Chapter 7. If the number is above, you will most likely have to file Chapter 13.
The Means Test is used to assess whether you are a better fit for Chapter 7 bankruptcy (liquidation), or Chapter 13 bankruptcy (reorganization). Chapter 7 is need-based and lasts for three to six months, while Chapter 13 entails a long-term repayment plan made over the course of three to five years.
The 341 Meeting
Whether you file for Chapter 7 or Chapter 13, you will have to attend the Meeting of the Creditors, or a 341 meeting. While the name includes the word “creditors,” it is unlikely that any creditor will appear at your hearing.
The purpose of the 341 meeting is to have the trustee review your schedules and documents. After you provide proof of your identity, through a government-issued ID and your original social security card, you will be sworn in or affirm to tell the truth. Our office will have forwarded any documents the trustee required the week before your scheduled meeting. You might have to bring a recent pay stub and bank statement. Our attorney will review some of the basic questions you will be asked. Some of the questions might be included.
- Have you filed for bankruptcy before?
- Have you sold any property in the last two years?
- Do you have a pending lawsuit against anyone?
- Does anyone owe you money?
- Do you expect an inheritance in the next six months?
- How did you get into your financial situation? The trustee is not looking for a life story and your case will not hinge on your answer.
While the above questions will probably be asked in every case, the trustee might pose some questions based on the provided documents and your bankruptcy schedules. By taking the time to prepare your case properly, our office hopes to limit the number of questions and concerns the trustee might have.
Debtor Education Certificate
Finally, before you can be granted a discharge, you must receive debtor education. Like credit counseling, debtor education aims to give debtors the knowledge and information they need to make good financial decisions in the future and prevent additional bankruptcies. While this might seem like a small requirement, your case could be dismissed at the very end unless you complete your course on time.
What Type of Bankruptcy Should I File?
As stated above, there are two chapters of bankruptcy that an individual or couple will typically file in Mount Holly.
Chapter 7 Bankruptcy
The most common bankruptcy is Chapter 7. Chapter 7 is designed for people with limited income, lots of debt, and few assets. However, this does not mean you have to be unemployed or not own a home. While there is an income requirement, many people fail to realize that they qualify. The benefit of Chapter 7 is the ability to eliminate much of your debt in about five months. It is a quick and efficient means of getting your financial life back on track.
A common fear when filing for bankruptcy is that a person will lose their property, including their house and car. All your assets are included in the bankruptcy estate when you file for bankruptcy. In Chapter 7, this property is technically available to be sold by a court-appoint trustee. However, there are federal and state exemptions that allow a debtor to keep their property. Before our office would file Chapter 7 for you, we would carefully review your assets to ensure they could be protected. If not, we would recommend Chapter 13 or another alternative. In the vast majority of cases, Mount Holly residents can keep all their property.
Chapter 13 Bankruptcy
Chapter 13 is a reorganization of your debt. The significant difference between the two chapters is that a debtor will propose a three to five-year payment plan in Chapter 13. There are several reasons a person would file a Chapter 13 bankruptcy instead of Chapter 7. In some cases, a debtor’s income is too high to qualify for Chapter 7, but they could still benefit from paying their creditors through bankruptcy instead of negotiating with them. Other debtors might have non-exempt property they want to keep, so they are required to pay the value of the property to their creditors through their bankruptcy plan.
However, the most common reason an individual files for Chapter 13 is to stop a foreclosure or a scheduled sheriff sale. By filing for bankruptcy, a homeowner can place their home under the protection of an automatic stay. Additionally, a mortgage lender must accept a five-year payment plan for the mortgage arrears.
The Bankruptcy Code requires that a mortgage company, and any other creditor, to file a proof of claim that includes a detailed breakdown of what is owed along with documents that evidence the debt. Our Mount Holly bankruptcy lawyer will carefully review the proof of claim to ensure the amount you are required to pay is accurate.
Our Mount Holly, NJ Bankruptcy Attorneys Can Help
Filing for bankruptcy is not an easy decision to make, but it can help you fix your credit, eliminate your debts, and restore your independence. If you or a loved one is considering filing for Chapter 7 or Chapter 13 bankruptcy in Mount Holly, New Jersey, contact the law offices of Young, Marr & Associates online, or call us at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania for a free consultation with an experienced bankruptcy lawyer today.