Mercer County, NJ Bankruptcy Lawyer
Every year, thousands of individuals across Mercer County, New Jersey decide to take control of lives by filing for some form of consumer bankruptcy. According to Mercer County consumer filing statistics compiled by the United States Bankruptcy Court for the District of New Jersey:
- 2017: 991 filings (626 Chapter 7, 365 Chapter 13)
- 2018: 983 filings (619 Chapter 7, 364 Chapter 13)
- 2019: 993 filings (571 Chapter 7, 422 Chapter 13)
Bankruptcy is a versatile and powerful tool when it comes to managing and restoring your financial independence, and its benefits start working right away. From the moment you file a petition for consumer bankruptcy, you gain protection from any continued contact or collection efforts by your creditors. During the course of your bankruptcy, you can erase many of your greatest debts, or create a reasonable plan for gradual repayment which will allow you to keep valuable possessions, such as your car. Once your bankruptcy is discharged (completed), you can begin the process of steadily restoring your credit to healthy levels.
Do You Need an Attorney to File for Bankruptcy in Mercer County, New Jersey?
Bankruptcy has numerous advantages to offer, but successfully filing without the guidance of an experienced bankruptcy attorney is next to impossible. This is because the New Jersey and federal laws dealing with bankruptcy rules and procedures are highly complicated, and sometimes, they even come into conflict with one another. For example, approximately half of the states in America currently allow petitioners to choose between federal and state exemptions, including New Jersey. Depending on which set of exemptions you decide to adhere to, the assets you keep or lose change dramatically.
The U.S. Bankruptcy Court explicitly advises against filing for bankruptcy on your own, formally known as making a pro se filing. The Court’s website issues the following warnings:
While individuals can file a bankruptcy case without an attorney or “pro se,” it is extremely difficult to do it successfully. […]Bankruptcy has long-term financial and legal consequences — hiring a competent attorney is strongly recommended. […]Debtors are strongly encouraged to obtain the services of competent legal counsel.
At the law offices of Young, Marr, Mallis & Associates, we have been serving the men and women of New Jersey for decades. Our skilled team of Mercer County, New Jersey bankruptcy attorneys has 20 years of experience handling both Chapter 7 bankruptcy and Chapter 13 bankruptcy, including matters of secured and unsecured debt, foreclosure and repossession actions, and the debtor protection granted by the automatic stay. If your quality of life is suffering from excessive debt and harassment from creditors, you may be a suitable candidate for bankruptcy. The bankruptcy lawyers at Young, Marr, Mallis & Associates can help at every step of the way, from initial filing to final discharge.
What Filing for Bankruptcy in Mercer County Can Accomplish for You
Last year, more than a thousand people filed for bankruptcy in Mercer County alone. Statewide, there were nearly 30,000 filings in New Jersey. As the statistics make clear, bankruptcy is a popular mode of recourse when it comes to reversing bad credit and reducing or obliterating unmanageable debt. Part of the reason filings are so common is that, for those who are good candidates, bankruptcy can make numerous positive changes to a petitioner’s life in both the short-term and the long-term.
Debts Bankruptcy Can Erase
In bankruptcy, debts are divided into two categories:
- Dischargeable Debt
- Nondischargeable Debt
Basically, if a debt is dischargeable, you can get rid of it. If a debt is nondischargeable, you are stuck with it. Therefore, if the bulk of your debt is of a nondischargeable nature, bankruptcy may not be the best remedial action for you to take. Fortunately, most debts are classified as dischargeable, including:
- Medical Debt
- Utility Bills
- Personal Debt
- Overdue Rent
- Credit Card Debt
- Social Security Overpayments
This is especially good news considering the fact that studies have shown medical bills are the number one source of debt for Americans. A Harvard University study showed that almost 62% of all consumer bankruptcies were filed for medical-related reasons. Furthermore, 78% of filers did have some form of health insurance.
However, there are several types of debt that bankruptcy cannot eliminate. Bankruptcy cannot discharge the following debts:
- Student Loans
- Child Support
- Alimony Payments
- Most Tax-Related Debt
How Bankruptcy Stops Your Creditors in Mercer County
In addition to the financial pressures of crushing debt, many bankruptcy clients say that one of the most stressful aspects of daily life is being constantly pursued by creditors attempting to make collections. When you dread answering your phone or checking your mail, your happiness suffers. However, thanks to bankruptcy, you gain immediate relief from creditors.
As soon as you file, you become protected by an injunction referred to as the automatic stay, so named because it “kicks in” immediately. The automatic stay forces creditors to stop contacting you for payments while the bankruptcy is in effect. The automatic stay also puts a freeze on utility service shut-offs and attempts to foreclose or repossess. Finally, if your wages are being garnished, the automatic stay returns your full paycheck into your pocket.
The Difference Between Chapter 7 and Chapter 13 Bankruptcies in Mercer County, NJ
When a potential bankruptcy petitioner comes into our office, our Mercer County bankruptcy attorney will assess what type of bankruptcy will be most beneficial. However, there are certain legal restrictions that could prevent a person from filing for the kind of bankruptcy they desire.
Chapter 7 Bankruptcy
Sometimes referred to as a “liquidation bankruptcy,” Chapter 7 is what people think of when they think about bankruptcy. Designed for petitioners with limited income and substantial unsecured debt, Chapter 7 allows a person to eliminate a vast amount of their financial obligations in five to six months.
As great as it sounds, there are some potential issues to consider. First, everyone does not qualify for Chapter 7. If your household income is too much, you will not be eligible. However, many people who do not believe they do not qualify, actually do. Therefore, it is crucial to have our office review your income.
Another fear people have is that they will lose their property, especially their home and car. A Chapter 7 trustee might take and sell some of your possessions. However, there are protections, or exemptions, available that allow a debtor to keep their property. In most cases, our office will be able to protect your assets with the available bankruptcy exemptions. Just because you own a home does not mean you are unable to file for Chapter 7.
When people file for bankruptcy, there are doing so for a reason. Sometimes it is just because they have an overwhelming amount of debt. In other cases, they are trying to save their homes from foreclosure or their car from repossession. Filing for Chapter 7 is helpful for the former but does not provide any relief for the latter. If you are trying to keep you home, you should consider filing for Chapter 13.
Chapter 13 Bankruptcy
Chapter 13 is significantly different than Chapter 7. In addition to lasting much longer, three to five years, a petitioner will file a reorganization plan in their Chapter 13 bankruptcy. The reorganization plan will list a petitioner’s creditors along with how much each creditor will be paid.
While Chapter 13 might not sound as beneficial as a Chapter 7 bankruptcy, it is a vital step towards getting back on a firm financial footing. In many cases, a petitioner is able to accomplish much more by filing for Chapter 13.
For example, if your home is in foreclosure, a Chapter 13 bankruptcy not only stops the legal proceedings, it forces your mortgage company to accept a payment plan to bring your mortgage current. In situations where a mortgage company was unwilling to negotiate, a bankruptcy requires them to accept payments through the plan.
If you had property you did not want the trustee to sell in a Chapter 7 bankruptcy, you could keep it while paying its fair market value through a Chapter 13 plan. For many people, this is a preferable option that still often allows them to discharge a substantial portion of their debt.
Other Benefits of Filing for Bankruptcy in Mercer County
While most people might know that they can eliminate debt or stop a foreclosure by filing for bankruptcy, there are other possible benefits available.
Removing Judgment Liens
If you have a judgment lien on your home, it is another secured debt like your mortgage. At some point, perhaps when you sell your home, you will be required to satisfy this lien. In some instances, our Mercer County bankruptcy attorney could have this lien removed, or avoided. Once the judgment lien is avoided, it becomes an unsecured debt and is either discharged or partially paid through a Chapter 13 plan.
Eliminating Second and Third Mortgages
Petitioners who file for Chapter 13 might be able to eliminate a second or third mortgage through their bankruptcy. While rare, there are situations where the value of a person’s home is less than their first mortgage. If your home has depreciated over time and you have additional mortgages on your property, it might be possible to have those liens removed and the obligation reclassified as unsecured debt.
Cramming Down Auto Payments
In bankruptcy, you are typically not permitted to change the terms of a secured loan. However, there are circumstances where you could lower your car payment. If you purchased your vehicle 910 days before filing for bankruptcy, you might be able to cramdown your payment.
Cars start losing value the minute you drive them off the lot. If your vehicle is worth less than you owe, and you qualify under the 910-day rule, you might be able to pay the value of your car through your bankruptcy plan and discharge the remaining unsecured balance. Be sure to review your car payment with our Mercer County bankruptcy attorney. In some cases, lowering a car payment often makes bankruptcy more manageable for a petitioner.
Managing Student Loans
The student loan crisis in this country is real. Many people are working hard just to pay their student loans. While it is very difficult, if not impossible, to discharge a student loan through bankruptcy, you could still utilize Chapter 13 to manage your payments.
When you file for Chapter 13, your payment is either based on the debt you must pay, your previous six-months of income, or your available income after subtracting your reasonable monthly expenses from your income. Additionally, you are protected from your creditors while in bankruptcy. This means that, under certain circumstances, you could pay your student loans through a much lower bankruptcy plan payment. While not ideal, because your interest will continue to accrue, it may offer a solution to individuals completely overwhelmed by their student loan payment.
Our Mercer County Bankruptcy Attorneys Can Help
Every year, bankruptcy helps millions of Americans and thousands of people in New Jersey and Mercer County manage their finances and regain their independence. If you would like to speak with one of our experienced Mercer County, New Jersey bankruptcy lawyers about how bankruptcy may be able to help you, call the law offices of Young, Marr, Mallis & Associates at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania, or contact us online. Your case evaluation is guaranteed to be confidential and comes at no cost to you.