Ocean County, NJ Bankruptcy Lawyer

Many small business owners, entrepreneurs, and ordinary citizens dread the word “bankruptcy.” Bankruptcy is often linked with poor finance management, lack of business sense, or frivolous spending. In reality, financial hardships can happen even when people do everything they are supposed to do for their business or home finances. For example, many businesses filed for bankruptcy during the 2020 COVID-19 outbreak because of circumstances outside their control. Bankruptcy can be seen as a way to regain control of a situation that could get out of hand.

If you or your business are considering declaring bankruptcy, we can help. We can help guide you through effectively filing for bankruptcy so that you are able to get a fresh start and get back to what you want to be doing.

Call our bankruptcy lawyers from Young, Marr, Mallis & Associates at (609) 755-3115 for a free analysis of your situation.

Why Should I File for Bankruptcy in Ocean County, NJ?

Bankruptcy tends to have a stigma attached to it in general conversation. However, this reputation is mostly unearned. A bankruptcy filing should not be an indication that everything in your life is coming crashing to the ground. Instead, it is better to think of bankruptcy as a reset button. It is a way to manage your debts so that you can come out on the other side ready to continue your life rather than be destitute.

If you are in significant debt, filing for bankruptcy is one way to pay off those debts while retaining as much of your assets as possible. Filing for bankruptcy can prevent creditors from foreclosing on your home or seizing your business’s inventory.

“Automatic Stays” in Ocean County, NJ Bankruptcy Proceedings

Historically, when people went into debt, they got thrown into prison. Colonists in what would become the United States did not like that system. Consequently, bankruptcy laws and proceedings across the United States are less focused on punishing debtors and more focused on facilitating a way for them to pay creditors back without facing financial ruin.

One of the reasons this is possible is through something called “automatic stay.” When you or your business declare bankruptcy, courts place an injunction, called a “stay,” that prevents creditors from trying to collect debts from you in any way. This happens as a matter of course, hence why it is an automatic stay. While the stay is active, creditors cannot file lawsuits against you, garnish your wages, or even do things as simple as calling you to collect a debt.

“Liquidation” in Ocean County, NJ Bankruptcy Proceedings

The way that debts are paid in bankruptcy is through the “liquidation” of assets. Liquidation means the transformation of physical things into cash. One example of liquidation would be selling your car for a lump sum. In bankruptcy, things like business inventory, stocks, real estate, or other possessions could be liquidated to help satisfy debts. However, you should not think that liquidation is done without care or consideration. In many forms of bankruptcy, you will be able to earmark certain assets as “off limits” and protect them from creditors who may wish to take the assets for themselves.

Types of Bankruptcy in Ocean County, NJ

There are many types, or “chapters,” of bankruptcy that you can file. Different chapters of bankruptcy are tailored to assist debtors in different situations, so you should discuss your case with our bankruptcy lawyers to figure out which chapter of bankruptcy is best for your situation. For example, you would file a different chapter of bankruptcy as an individual than as a business. We will go over some of the more common bankruptcy chapters people file below.

Chapter 7

Chapter 7 is usually the easiest to understand type of bankruptcy. During proceedings for Chapter 7, your assets are sold off to pay your debts.

Chapter 7 proceedings might be the best option for individuals or businesses with few assets. One advantage of Chapter 7 bankruptcy proceedings is that they are streamlined, so you will be able to get on with your life faster than with other kinds of bankruptcy proceedings. You can also protect certain assets that will not be sold off. However, if you have too much by way of income or assets, you might not qualify for bankruptcy under Chapter 7.

Chapter 11

Chapter 11 bankruptcy is perhaps the most well-known chapter of bankruptcy in the United States. Chapter 11 bankruptcy is exclusively for business entities; individuals cannot file for bankruptcy under Chapter 11. However, there are other chapters of bankruptcy that are similar to Chapter 11 but more suited to the needs of individuals.

Chapter 13

Chapter 13 bankruptcy is like Chapter 7 bankruptcy, but it allows you to keep more assets. For Chapter 13 bankruptcy, you must submit a repayment plan detailing how you are going to pay off your debts. Additionally, you must also submit a list of any properties you own as well as your monthly expenses. This information informs the court’s plan for you to deal with your debts.

One of the benefits of Chapter 13 bankruptcy over Chapter 7 is that it allows you to keep more of your assets. If you have significant assets and holdings, Chapter 13 might be a better fit for you than Chapter 7. However, the main downside of Chapter 13 bankruptcy is that it takes much longer for proceedings to resolve. It is possible for Chapter 13 bankruptcy proceedings to take years, with the average being somewhere between three and five years.

Speak with an Ocean County, NJ Bankruptcy Lawyer Today

Young, Marr, Mallis & Associates’ bankruptcy lawyers can be reached at (609) 755-3115. To help with your case.