Trenton, NJ Bankruptcy Lawyer
While bankruptcy has helped countless residents of Trenton and New Jersey to recover from debt and move on with life, filing for bankruptcy is not easy. The laws surrounding bankruptcy are complex and prone to continual change.
Missing a deadline, forgetting a piece of information, or incorrectly filling out any one of the many bankruptcy forms required by the New Jersey and federal government can cause a petitioner to miss out on the savings they would otherwise be entitled to. In the worst-case scenario, your case could even be dismissed. If you want to get the most out of your bankruptcy, having a skilled and experienced team of bankruptcy attorneys in your corner is of the utmost importance.
For a free case review with our bankruptcy lawyers, contact Young, Marr, Mallis & Deane today at (609) 755-3115.
When You Should File for Bankruptcy in Trenton, NJ
Many individuals might feel embarrassed when considering filing for bankruptcy in Trenton. However, there is no need to feel ashamed as bankruptcy is a common solution used by many to regain financial stability. Our team of bankruptcy lawyers can guide you through this process, helping you to make informed decisions and ensuring your rights are protected. Bankruptcy is a legal tool specifically created for this purpose, allowing you to take a step back and figure out the next best steps while creditors are held at bay.
If you are facing financial difficulties in Trenton, filing for bankruptcy could be a viable solution. By doing so, you can eliminate numerous debts that have been causing you stress. Although some of your assets may need to be sold to pay off debts, there are strategies to safeguard specific properties from being sold off.
We can provide valuable information about the different types of bankruptcy claims available in Trenton and offer guidance on which one would be most appropriate for your unique situation. Once your bankruptcy petition is approved, you will also benefit from an automatic stay that will prevent creditors from contacting you or attempting to collect payments.
New Jersey Bankruptcy: Fact vs. Fiction
Bankruptcy is surrounded by a host of stubborn myths and misconceptions. Sometimes, false ideas about the nature of bankruptcy can even discourage people from filing.
Fiction: My Credit Will Be Ruined Forever
Fact: Bankruptcy is the first step toward restoring healthy credit. When people file for bankruptcy, they are usually coming from a situation where they are behind on their bills and, as a result, already have bad credit. Petitioners emerge from a successful bankruptcy with a clean financial slate to start from, which makes rebuilding good credit that much easier.
Fiction: I Will Still Have Most of My Debts Anyway
Fact: While there are differences in which debts can be eliminated or discharged, depending on which type of bankruptcy a person files for, consumer bankruptcy eliminates the vast majority of debts. Common debt types which most bankruptcies classify as dischargeable include credit card debt, utility bills, medical bills, and personal loans.
Fiction: I Will Lose My House and Car
Fact: Many people fear that when they file for bankruptcy, they will lose their possessions, most notably their house and car. Fortunately, this is usually not the case. While there are times that a person will lose their home, this only occurs when a person cannot afford the mortgage payments, and bankruptcy frees them from any personal obligation. However, there are a number of federal and state exemptions available that help debtors keep their property, including their home and car. In fact, many times, people file for bankruptcy to save their home or vehicle.
Fiction: I Will Never Be Able to Buy a Home If I File for Bankruptcy
Fact: Many creditable mortgage institutions will offer loans to people who filed for bankruptcy. However, they usually require a two- or three-year waiting period after your discharge. During that time, you can improve your credit. However, most people considering bankruptcy as an option would probably not qualify for a mortgage. In most situations, filing for bankruptcy is the most efficient way to eliminate your debt and start building your credit so you can purchase a home.
Fiction: Filing for Bankruptcy Will Ruin My Spouse’s Credit
Fact: Unless you have joint debts with your spouse, bankruptcy will not affect your credit. Many times, when filing for a couple, our Trenton bankruptcy attorney will recommend that only one spouse file, if possible.
Fiction: Discharging Taxes in Bankruptcy is Not Possible
Fact: While not all tax obligations are dischargeable in bankruptcy, certain ones can be eliminated. In some cases, you might not be able to discharge your tax obligation, but you can eliminate any interest and penalties. The qualifications for the discharge of taxes are complicated, so you should review your tax situation with our experienced attorneys.
Fiction: Bankruptcy Cannot Make My Creditors Go Away
Fact: Constant contact with creditors is one of the most stressful aspects of life for many people who are considering bankruptcy. The good news is, under an automatic stay, creditors are actually prohibited from making further contact with debtors for the duration of the bankruptcy. As soon as a person files for bankruptcy, creditors must cease contact.
Bankruptcy is one of the most useful and powerful tools available to consumers who are struggling to get out of a financial hole. While bankruptcy may suffer from a nasty reputation, bankruptcy can actually be one of the very best ways to restore your credit, your independence, and your financial stability. Bankruptcy endows petitioners who have filed with the ability to:
- Manage, reduce, and eliminate debts
- Keep valuable assets that would otherwise be foreclosed on or repossessed
- Banish creditors
- End wage garnishment
- Delay service shut-offs
The Types of Bankruptcy in New Jersey
There are several different types of bankruptcy available to residents of Trenton. The most common types of bankruptcy are Chapter 7 (liquidation) and Chapter 13 (reorganization). Chapter 7 bankruptcies liquidate the bulk of debts and are prized for their ability to be rapidly completed, often in a matter of months. Chapter 13 bankruptcies call for more extensive repayments, which are made over the course of three to five years.
Chapter 7 Bankruptcy
As stated above, Chapter 7 is the most popular bankruptcy in Trenton. This is because, in four to six months, you can eliminate most of your debt without having to pay your creditors anything. Chapter 7 is designed for people facing overwhelming financial hardships who have limited assets. This does not mean that you are precluded from filing for Chapter 7 if you own a home or car. However, if your home does not have a mortgage or you owe very little on the property, you could be precluded from filing.
Chapter 7 is known as a “liquidation” bankruptcy because a court-appointed trustee has the right to take control of your property. A Chapter 7 trustee, or an agent, would sell your property and disburse the proceeds to your creditors. Fortunately, there are ways to keep your property under the Bankruptcy Code. There are many federal and state exemptions that our bankruptcy attorney will use to protect your assets. It is essential to review your property and income before filing for Chapter 7. Sometimes, a potential debtor will have to file a Chapter 13.
Chapter 13 Bankruptcy
Chapter 13 is similar but quite different from Chapter 7. While both types of bankruptcies share the same documents and schedules, a significant difference in Chapter 13 is the bankruptcy plan. Our Trenton bankruptcy attorney will propose a three to five-year plan that the Chapter 13 trustee and court must approve. The plan must comply with specific provisions in the Bankruptcy Code. Additionally, what you must pay through your plan will be impacted by your income, assets, and the type of debt.
Your creditors will be required to file claims with the court detailing the amount you owe and evidence that the debt is accurate. In some cases, a particular creditor might not have to be paid or will only be partially paid. However, if you are filing to stop a foreclosure, you will have to pay the full amount that your mortgage company claims. Our office will carefully review each claim filed to ensure they are accurate, comply with the Bankruptcy Code, and include all the necessary documents that evidence your debt. If there are any issues, our office could file an objection to the claim.
People in Trenton will file for Chapter 13 if their income is too high to qualify for Chapter 7, they have property they cannot protect but want to keep, or they are trying to stop a foreclosure or repossession.
The Means Test
While there are reasons to file one type of bankruptcy over another, petitioners cannot simply choose the type of bankruptcy they would like to pursue. Instead, the state of New Jersey utilizes Means Testing to determine which form of bankruptcy is the most appropriate for petitioners on a case-by-case basis. The major variable that Means Testing analysis is family size in relation to median income. However, as the economy fluctuates and calculations change, the median income is prone to shifting. At Young, Marr, Mallis & Associates, we vigilantly monitor New Jersey’s bankruptcy policies to ensure the best possible results for our clients.
Time Frames for the Bankruptcy Process in Trenton, NJ
When filing for bankruptcy in Trenton, the duration it takes for your debts to be cleared is a common concern. The time frame depends on the type of bankruptcy you qualify for. While some cases can be resolved within a few months, others may take several years. Regardless of your choice, our team can guide you on the estimated time for your debt-free status.
If you meet the requirements for Chapter 7 bankruptcy, your case will typically be resolved more quickly than a Chapter 13 filing. The timeline, however, will be determined by the amount of debt you need to pay off and the assets you must liquidate in order to do so. If you possess enough property to pay off your debt, your case may be resolved within six months or even sooner in some instances.
When going through Chapter 13 bankruptcy, the process might take longer due to the repayment plan that is put in place to satisfy your debt. In Trenton, it is common for these cases to last anywhere from three to five years.
How Our Lawyers Can Support Your Bankruptcy Case in Trenton, NJ
If you are facing financial difficulties, you may be considering bankruptcy as a solution. It is a tough decision to make, and you may not know where to turn for help. Our team of bankruptcy attorneys in Trenton can guide you through the process and assist you in making the right choices for your situation. We will assess your case and determine the best course of action, including which bankruptcy claim is appropriate for you. We will also help you understand which debts can be discharged and which cannot. You may be worried about losing your property, but we can help you protect your assets through available exemptions. Do not hesitate to reach out to us for assistance in getting your financial affairs in order.
File Your Bankruptcy Claim
If you are in Trenton and facing bankruptcy, there are several options to consider based on your situation. Chapter 7 bankruptcy is often suggested for those without sufficient funds to pay off their debts but who possess assets that can be liquidated to satisfy their liabilities. Nonetheless, opting for this approach may result in the loss of your home or other valuable assets.
Determining Which Debts Can Be Discharged
It is important to understand which debts can be eliminated through bankruptcy. Typically, medical bills, credit card bills, homeowners association fees, and some private loans can be discharged. However, it is important to note that child support and alimony debts cannot be discharged. Additionally, whether or not student loans can be discharged depends on the type of bankruptcy you are filing. Once your debts are discharged, they are considered erased.
Once your bankruptcy filing is approved, you will receive immediate relief from creditor harassment through the issuance of an automatic stay. This means that creditors will not be able to contact you through any means or initiate new collection attempts. With an automatic stay in place, you can take a breath and focus on organizing your financial affairs. If there are any pending lawsuits related to your debts, they will be put on hold. Additionally, if your bank accounts have been frozen, they will be unfrozen.
Choosing Which Exemptions to Apply to Your Case
You will also need to decide between two sets of bankruptcy exemptions: the state or federal exemption system. Opting for the New Jersey exemptions means you can protect up to $1,000 in general personal property through a wildcard exemption. On the other hand, choosing federal exemptions allows you to apply $1,475 to any property and any unused portion of a homestead exemption up to $13,950. The set of exemptions you choose may also determine which types of property creditors cannot touch.
If you happen to be married, it is possible for you to benefit from both alternatives. In Trenton, couples who are filing for bankruptcy jointly are entitled to claim a complete set of exemptions individually. Collaborating with our proficient bankruptcy lawyers will provide you and your loved ones with a favorable opportunity to utilize your exemption choices to the fullest.
Other Benefits of Filing for Bankruptcy in New Jersey
Many people realize that bankruptcy can be used to eliminate some debt or stop foreclosure. However, many other benefits are not commonly known.
For example, many people are unaware that a debtor in Chapter 13 could cram down a car payment. When you purchase a new car, its value quickly depreciates. It is not uncommon for a person to owe more on their vehicle than it is actually worth – especially if the car is older and has experienced mechanical problems. If you purchased your car 910 days before filing for bankruptcy, you might be able to lower your car payment.
Through your bankruptcy plan, you could pay the fair market value of your car while discharging the remaining balance due under your loan. To illustrate this, imagine your car has a Blue Book value of $5,000, but you still have $10,000 remaining on your car note. Our Trenton bankruptcy attorney will propose paying $5,000, or the fair market value, instead of the amount due under your existing contract.
If your house has a second mortgage, you might be able to strip it through a Chapter 13 bankruptcy. Every homeowner is not entitled to this option – your property must be worth less than or close to what you owe on your first mortgage. In some situations, a person who qualifies for Chapter 7 will file for Chapter 13 to take advantage of this option. Our office will thoroughly review your mortgages and your home’s value to determine if you could benefit from this provision of the Bankruptcy Code.
Our Trenton, NJ Bankruptcy Lawyers Can Help
Call Young, Marr, Mallis & Deane at (609) 755-3115 for a free case assessment with our bankruptcy attorneys.