Pennsauken, NJ Bankruptcy Lawyer
Sometimes in a person’s life, their debts and financial instability have become such that they need a restart. While filing for bankruptcy cannot make these issues disappear, it can significantly help you to begin rehabilitating your financial well-being.
In these post-Covid times, there are numerous reasons why an individual might consider filing for bankruptcy. Filing for bankruptcy can help put a stop to creditors’ calls and any pending litigation against you regarding your financial circumstances. Depending on your income and assets at the time of filing, you can apply for either Chapter 7 bankruptcy or Chapter 13.
Our bankruptcy lawyers in Pennsauken can help you get on the road to financial recovery. For a free case evaluation, call Young, Marr, Mallis & Associates at (609) 755-3115.
Reasons to File Bankruptcy in Pennsauken, NJ
While filing for bankruptcy can be one of the most terrifying decisions a person will need to consider, there are many reasons why it could be the right choice for you and your financial future. Most people consider filing for bankruptcy in Pennsauken because they feel as if they are being crushed under high debts and lack of income. Many people feel embarrassed if they even have to consider filing for bankruptcy, but there is no reason to be. Bankruptcy is a perfectly valid way to address your financial difficulties and shows maturity in dealing with a serious situation.
High debts are at the heart of most bankruptcy cases. Contrary to popular belief, however, these debts only sometimes arise out of financial irresponsibility. Times can get incredibly tough on people, and some need to rely on credit cards to get them through. For instance, if you were injured or sick or laid off from your job, you might have compiled debts that you cannot handle on your own.
Another important reason to file for bankruptcy in Pennsauken is to protect your property from being repossessed by your creditors if you cannot make your scheduled payments. While bankruptcy is not a magic wand that can wave all your debts away, it can provide you significant room to begin repairing your financial circumstances. Our bankruptcy lawyers can explain the benefits of filing for bankruptcy in your case and the best way to protect your assets.
How to Start a Bankruptcy Case in Pennsauken, NJ
People talk about filing for bankruptcy as if it is some singular action. Like many other forms of legal action, filing for bankruptcy is more complex than simply filing paperwork. Your first step is to contact an experienced bankruptcy attorney in New Jersey who can walk you through this process and make the whole thing easier.
Your second step is to gather documentation. Contrary to what some people might assume, you cannot simply walk into court and declare bankruptcy. You must show that you meet the criteria to even be eligible for bankruptcy. This may require documentation of your debts, assets, accounts, income, and anything else pertaining to your finances. If you are not sure whether you need something, include it anyway. Our bankruptcy attorneys can review this information with you and determine what is necessary.
Next, we can help you prepare your bankruptcy petition. The petition should include information about your finances and explain which bankruptcy chapter you are filing under. As explained in greater detail below, many people file under either Chapter 7 or 13. If you have a business filing for bankruptcy, you might select an entirely different chapter.
Once the paperwork is prepared and in order, we can help you file your petition with the appropriate bankruptcy court. Even though we are filing the case in New Jersey, bankruptcy is largely a federal matter. Special bankruptcy courts hear these kinds of cases, not ordinary state courts. We can help you figure out which court to take your case to.
Types of Bankruptcy You Can File in Pennsauken, NJ
Most people tend to think that there is only one process when you file for bankruptcy. However, there are actually two types of bankruptcy individuals can file for in Pennsauken: Chapter 7 and Chapter 13 bankruptcy. Each type of bankruptcy claim is intended to help individuals in different ways, and each has its own consequences once the request has been approved. Speak with our bankruptcy lawyers to learn which type of bankruptcy is appropriate for your financial circumstances.
Chapter 7 Bankruptcy
Commonly referred to as “liquidation bankruptcy,” Chapter 7 bankruptcy is one of Pennsauken’s most commonly filed types of bankruptcy. While individuals usually utilize it, businesses in financial trouble can also claim Chapter 7 bankruptcy. Chapter 7 is called liquidation because some of your assets will be sold off, or “liquidated,” so the proceeds can be used to pay the debts that caused you to file bankruptcy.
The main benefit of filing for Chapter 7 bankruptcy is that the process moves relatively fast. In most cases, your assets will be liquidated, and certain debts discharged within a couple of months. However, it is possible that you will lose property that you would rather not, like houses, cars, and other property that could be sold to satisfy your debts.
If you have a high amount of debt compared to a low amount of income and do not own private property, filing Chapter 7 bankruptcy might be the right move for you. To qualify for Chapter 7, you must pass a means test showing that your annual household income is lower than the average income for all households in New Jersey. Factors like your and your spouse’s income, and any children or dependents you can claim, will be used to determine your annual household income. If that number is lower than the New Jersey average, your Chapter 7 bankruptcy claim will be approved. Our bankruptcy lawyers can help determine if filing for Chapter 7 bankruptcy will provide you with the financial relief you need.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy tends to be a better option for those individuals with private property and other assets that they do not want to be repossessed to pay down their debts. Chapter 13 bankruptcy does not require liquidating your assets like Chapter 7. Instead, individuals filing for Chapter 13 bankruptcy must develop a repayment plan detailing how they will pay off their debts over a certain number of years.
Many of these repayment plans range from two to five years, but you can expect to be on your plan for a considerable amount of time. Keep in mind, though, that any repayment plan you devise will need to be approved by the court before it can go into effect. The court will usually assess your household income to ensure you can maintain the scheduled payments in your plan and still afford to live and eat. If it seems likely that you will miss a payment or the plan is unreasonable in light of your finances, the court will most likely reject your claim for Chapter 13 bankruptcy. Our bankruptcy lawyers can help you determine if filing for Chapter 13 bankruptcy is appropriate in your situation and craft a repayment plan that secures you and your family’s financial future.
How to Protect Assets and Property When You File for Bankruptcy in Pennsauken, NJ
Protecting property and assets is one of the biggest concerns for people filing for bankruptcy. There is often a risk of losing assets, depending on which chapter you file under and your specific circumstances. Our team can help you figure out if there is a way to protect some of your assets. Often, people may claim certain exemptions that allow them to shield certain assets or property during the bankruptcy process.
Since bankruptcy is a federal process, many exemptions are enshrined within federal law. One very important thing to note is that if you choose to use federal bankruptcy exemptions in New Jersey, you may only use federal exemptions. The state exemptions explained below may not be applied to your case. If you would rather use state exemptions, all federal exemptions are off the table.
One important federal exemption is the homestead exemption. This allows bankruptcy filers to protect a certain amount of equity in their home from the bankruptcy process. Under 11 U.S.C. § 522(d)(1), you may exempt up to $27,900 of equity in your primary residence.
Other federal exemptions protect personal property. Under 11 U.S.C. § 522(d)(2), you may exempt up to $4,450 for your vehicle. Other federal exemptions may apply to things like jewelry, tools you use for your job, and medical or health aids.
New Jersey State Exemptions
While some exemptions offered by the State of New Jersey are similar to federal exemptions, they are not all the same. For example, New Jersey does not offer any homestead exemption. If you want to protect equity in your home, you need to select federal exemptions.
New Jersey allows you to exempt a certain value of personal property. Under N.J.S.A. § 2A:26-4, you may exempt up to $1,000 of your personal belongings. This might include sentimental items, family heirlooms, jewelry, or anything else you want to retain.
New Jersey also allows you to exempt disability benefits, certain health insurance, and life insurance proceeds. Talk about what assets you have that you want to protect with your attorney. They can help you decide whether state or federal exemptions suit you.
Do I Need an Attorney to File for Bankruptcy in Pennsauken, NJ?
Technically, you are not required to have a lawyer help you file for bankruptcy. As with many legal proceedings, the courts may allow you to proceed on your own. However, doing so is not a good idea. The bankruptcy process can be complicated, and the outcome might have a significant impact on your finances for years to come.
An attorney can help you gather the information and documents needed to start your case. This is often a difficult and frustrating step in the bankruptcy process, as many filers do not know where to even start looking for the right documents.
Your attorney can also assist you in selecting the bankruptcy chapter for your case. While Chapters 7 and 13 are common, they are not the only available chapters. Your financial situation might necessitate an entirely different chapter. For example, businesses filing for bankruptcy would not file under Chapters 7 and 13. Your debts and assets may determine how you file, which is why it is important to talk about them with a lawyer.
Your attorney can also help you protect yourself during the bankruptcy process. There is a lot on the line here, and many people lose almost everything they have because they do not know how to protect certain assets. Your attorney can go over things like exemptions with you to better protect yourself and your financial future.
Our Pennsauken, NJ Bankruptcy Lawyer Can Help
Our bankruptcy lawyers are ready to provide you with a free case review to see what options are available to you. Contact Young, Marr, Mallis & Associates today at (609) 755-3115.