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 Trenton, NJ bankruptcy attorneys in your corner are of the utmost importance. At Young, Marr, Mallis & Associates, our New Jersey bankruptcy lawyers have been practicing New Jersey bankruptcy law for over 20 years. With thousands of cases under our belts, we have seen virtually every technicality and obstacle that bankruptcy cases can present. No matter how difficult your financial situation may seem, our bankruptcy attorneys have the expertise to help. Contact our law offices online, or call us today at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania to see what we can do for you.
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’re 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, though this only occurs when a person cannot afford the mortgage payments and the 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, a bankruptcy will not affect their 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 Trenton, NJ bankruptcy attorney.
Fiction: Bankruptcy cannot make my creditors go away.
Fact: Constant contact from 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
Other Benefits of Filing for Bankruptcy in New Jersey
Many people realize that bankruptcy can be used to eliminate some debt or stop a foreclosure. However, many other benefits are not commonly known.
For example, many people are unaware that a debtor in Chapter 13 could cramdown 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.
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 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 analyzes 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.
Our Trenton, NJ Bankruptcy Attorneys Can Help
If you or a loved one is struggling financially, filing for a Chapter 7 or Chapter 13 bankruptcy in Trenton, NJ can be the first step on the path toward renewed independence and freedom. To speak with a bankruptcy attorney in a free and confidential consultation, contact the law offices of Young, Marr, Mallis & Associates online, or call us today at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania.