New Brunswick, NJ Bankruptcy Lawyer
Bankruptcy is a process through which you can get a handle on the debt that has been causing you financial distress in New Brunswick.
After evaluating your finances, debt, income, assets, and other information, our lawyers will determine which bankruptcy chapter you should file. In most cases, it will either be Chapter 13 or Chapter 7. Chapter 7 is liquidation bankruptcy, meaning you will have to use federal or state liquidation exemptions to ensure certain assets are not lost during bankruptcy. Chapter 13 requires repayment over time, according to a pre-determined schedule devised by our lawyers and based on your debt, income, and expenses. If you are at risk of losing your home because of mortgage foreclosure, getting your wages garnished, or being sued by your creditors, bankruptcy might be right for you.
Call Young, Marr, Mallis & Associates at (609) 755-3115 to have our New Brunswick, NJ bankruptcy lawyers review your case for free.
Filing for Bankruptcy in New Brunswick, NJ
Bankruptcy is a complicated federal system designed to assist individuals and businesses overwhelmed with debt. There are various types, or “chapters,” of bankruptcy available that provide a range of benefits from eliminating debt to providing the tools to restructure your financial liabilities. The chapter that is right for you will depend on the specific facts of your situation.
The first time you meet with one of our seasoned bankruptcy lawyers, they will review your financial situation, work with you to establish reasonable goals, and fully explain the bankruptcy process. Deciding to file for bankruptcy is not always easy We recognize the anxiety associated with economic distress and the idea of bankruptcy. However, after evaluating your debt, monthly income, monthly expenses, family size, and assets, we will confidently guide you through the decision-making process and advise you on whether filing for bankruptcy would be right for you.
You can enter into bankruptcy regardless of the amount of debt you have. Before filing in New Brunswick, you will have to take a credit counseling course. This course will provide you with useful tips and tricks regarding financial management that you can apply to your life after bankruptcy.
There is no statute of limitations to file for bankruptcy in New Jersey. That said, it will be helpful to file before your debt grows too much, as that will mean you have an easier time repaying creditors.
While almost anyone can file for bankruptcy in New Brunswick, that does not mean that bankruptcy is a fallback option in all situations. For example, there are mandatory waiting periods in between bankruptcy filings. So, it will be important to fully address your debt in bankruptcy so that you do not have to file again in the near future.
Filing for Chapter 7 in New Brunswick, NJ
Chapter 7 tends to be the most popular chapter of bankruptcy among consumers, designed for people who have limited assets and income. The process is relatively short, usually taking five to six months to complete, and it allows you to eliminate the majority of your debt.
You may have read online that Chapter 7 is a “liquidation bankruptcy,” requiring you to sell your property to pay your creditors. This is technically accurate: a court-appointment trustee could take control of your assets and liquidate them to pay your debt. However, state and federal liquidation exemptions usually allow debtors to keep certain property. Our experienced attorneys are familiar with these exemptions and know how to utilize them to protect your property in New Brunswick.
Once you receive your discharge at the end of the bankruptcy proceedings, the vast majority of your debt will be eliminated, including medical bills, personal loans, and credit card debt. However, not all debt is dischargeable. As a matter of public policy, the government has designated certain debts, like most taxes, alimony, child support, and criminal restitution, as non-dischargeable.
Student loans are treated differently in bankruptcy. While generally non-dischargeable, a separate lawsuit could be filed petitioning the court to discharge that debt. The requirements for obtaining a discharge in this manner are stringent, and this kind of discharge is rarely granted.
Filing for Chapter 13 in New Brunswick, NJ
The significant difference between Chapter 7 and Chapter 13 is the requirement to submit a bankruptcy repayment plan in Chapter 13 bankruptcy. You will have to pay all or a portion of your debt back over a three- to five-year period during a Chapter 13 bankruptcy. The amount you must pay will depend on the type of debt, your income, and other factors. Our attorneys will review the details of your case to propose a feasible plan that meets all requirements.
When a debtor’s income is too substantial to qualify for Chapter 7, they will have to file for Chapter 13 instead. Even though you might be required to pay your unsecured debt, Chapter 13 could still be more beneficial than loan consolidation or settlement negotiations with your creditors. The Bankruptcy Code uses a complex calculation based on your monthly income and allowed expenses that will be used to determine what you should pay towards your unsecured debt. In many cases, this is substantially less than the total amount you owe. Also, if your reason for filing Chapter 13 was simply to stop a mortgage foreclosure, there might be no requirement to pay unsecured creditors.
When your home is in foreclosure or scheduled for a sheriff sale, Chapter 13 could be the only option to save your house. Filing for bankruptcy will stop any collection actions against you through a legal mechanism known as an automatic stay. This wall of protection prohibits any conduct by your creditors to collect on your debt, including moving forward with a foreclosure or selling your home at a sheriff’s sale.
After Chapter 13 stops your sheriff’s sale or mortgage foreclosure, you will be required to begin making payments to your lender. Unusually, your proposed bankruptcy plan will consist of two provisions related to your mortgage default. The first will require you to make your regular monthly mortgage payment directly to your lender, and the second provision will require a monthly payment to a court-appointed trustee to cover your mortgage delinquency.
Why Filing for Bankruptcy in New Brunswick, NJ May Be Right for You
There are many reasons why a debtor might consider filing for bankruptcy in New Brunswick. If the majority of your debt is dischargeable, bankruptcy can effectively erase it, leaving you with no debt to repay. Other reasons to enter into bankruptcy include facing mortgage foreclosure, lawsuits from creditors, wage garnishment, and having unmanageable debt.
You Have Dischargeable Debt
Debt is categorized as either dischargeable or non-dischargeable. If a debt is dischargeable, it will be erased during bankruptcy, giving debtors the opportunity to focus on more important, secured debts. Which debts are dischargeable in bankruptcy will depend on the chapter you file. Typically, Chapter 13 allows for more dischargeable debts than Chapter 7. However, certain debts, like medical and credit card debt, are dischargeable under both bankruptcy chapters. With Chapter 7 bankruptcies, dischargeable debts are erased relatively quickly into the process since Chapter 7 cases only take a matter of months. With Chapter 13 bankruptcies, dischargeable debts are erased once debtors have completed their repayment plans. When your debt is discharged, you do not have a responsibility to repay it to creditors in New Brunswick.
You Are Facing Mortgage Foreclosure
If you owe a significant amount of money to your mortgage lender, your home might be at risk of mortgage foreclosure in New Brunswick. Mortgage foreclosure can happen relatively quickly, as homeowners only need to miss a few mortgage payments for lenders to initiate the process. If you do not have a defense against mortgage foreclosure, bankruptcy might be your best option. When our bankruptcy lawyers file your initial petition for bankruptcy, an automatic stay will take effect. This will put a stop to any efforts from creditors to collect on any debts, including mortgage foreclosure. Furthermore, if your home has already been foreclosed upon and is about to be sold at auction, filing for bankruptcy will stop that process, allowing you to keep your home in New Brunswick.
Your Wages Are Being Garnished
In certain situations, creditors can actually garnish your wages, or take some of your income. When this happens, you might be unable to pay other important bills, leaving you and your family without sufficient income. Bankruptcy can put a stop to wage garnishment through the automatic stay. This can enable you to retain all of your income during bankruptcy and use it to focus on repaying your debts. Wage garnishment is typically a sign that creditors want repayment immediately, so bankruptcy might be the best course of action to address the situation.
You Are Facing a Lawsuit from Creditors
When creditors want debts repaid right away, they might file lawsuits against debtors. Should this happen, filing for bankruptcy can give you the opportunity to take charge of the situation so that you can settle your debts in a way that suits your needs. Lawsuits from creditors are debt collection efforts, meaning any lawsuits will be put on the back burner when you file your bankruptcy petition and get an automatic stay in New Brunswick. Bankruptcy can let you be in control of your debt repayment so that you can protect certain assets from liquidation or repossession.
You Have Unmanageable Debt
Debt can build up slowly, steadily consuming a debtor’s life. As debt becomes unmanageable, filing for bankruptcy may become a serious consideration. In addition to providing a pathway to repayment for debtors, bankruptcy provides relief in the sense that debtors no longer have to fear excessive interest accruing on their debts or receiving harassing calls or communications from debtors. After you file for bankruptcy, we will create a plan moving forward. This might include using liquidation exemptions if you filed for Chapter 7 or devising a repayment plan if you filed for Chapter 13. Although bankruptcy may be the solution for those with unmanageable debt, it can also help individuals with growing debt that has yet to become unmanageable.
Call Our New Brunswick Attorneys for a Free Consultation
Call (609) 755-3115 to schedule a free, confidential consultation with the bankruptcy lawyers of Young, Marr, Mallis & Associates.