Experienced NJ Bankruptcy Attorneys
Financial issues can develop for many reasons. Whether you are struggling to pay your bills due to loss of a job, poor investments, business failure, medical issues, or any other reason, you should know there are different legal solutions that can help you find some debt relief. An experienced bankruptcy attorney at the Maduabum Law Firm, LLC can evaluate your situation and help determine whether filing for bankruptcy is a viable solution for you and your family.
Chapter 7 Bankruptcy
The majority of consumers file for bankruptcy under Chapter 7 of the United States Bankruptcy Code. Under Chapter 7, you can petition the court to discharge any qualifying debts so you will no longer have to pay them. However, in exchange for the discharge, a bankruptcy trustee can seize certain property in order to pay as much as possible to your creditors before the discharge. For this reason, Chapter 7 is commonly referred to as the “liquidation bankruptcy.”
While it may not seem preferable to give up your property, there are many exemptions set out in both federal and New Jersey state law that allow you to protect certain types and amounts of property. In NJ, bankruptcy filers have the option of choosing between federal and state exemptions, and some property that may be partially or completely protected can include:
- Part of the equity in your home
- Part of the value of your motor vehicle
- Public benefits
- Child support and alimony
- Household goods, clothes, furnishings, etc.
- Life insurance payments
- Retirements account funds (up to a certain amount)
In addition, many exemptions can be doubled if you file for bankruptcy with a spouse. Too many people are not aware of how to make the most of the exemptions and an experienced bankruptcy attorney can help you determine which exemptions to use to best protect your property.
Once the liquidation part of the Chapter 7 bankruptcy is complete, the court should discharge certain debts. Some debts that qualify for discharge include:
- Credit cards
- Personal loans
- Medical bills
- Some tax debts
- Some legal judgments
- Collection accounts
- Other unsecured debts
- Debts of a sole proprietorship or partnership
- Past due rent and utility bills
Once your debts are discharged, you have no more liability to those creditors. For this reason, many consumers prefer to file under Chapter 7. Not everyone is eligible for this type of bankruptcy, however, as you must pass a test called the “means test” based on your income and expenses. A NJ bankruptcy lawyer can help you determine whether you are eligible and ensure that you complete the means test accurately for the best chance of qualifying.
Chapter 13 Bankruptcy
If you do not pass the means test to qualify for Chapter 7 bankruptcy, you have other options, such as filing under Chapter 13 of the Bankruptcy Code. Chapter 13 bankruptcy is known as the “reorganization bankruptcy” because it involves the reorganization of your debts into one monthly payment that you will be expected to make for three to five years. The amount of your payment and the duration of the payment plan are based on your income and expenses so they are significantly more affordable than your regular monthly payments. Because you are required to make payments toward your debts, you do not have to surrender any of your property for liquidation. This makes Chapter 13 bankruptcy more desirable for individuals or couples with significant assets or property.
Once you complete your payment plan, the court may discharge certain debts, such as your credit card debt or medical bills. The lower payments and discharged debts can help you to regain control of your financial situation so that you may maintain ownership of your home, vehicles, and other important property.
Call for a Consultation with a New Jersey Bankruptcy Lawyer Today
Filing for bankruptcy should be carefully considered and an experienced bankruptcy attorney can help you decide whether this is the most effective debt relief method for you. Furthermore, if you decide to file, a skilled lawyer can help you weigh your options between Chapter 7 and Chapter 13 to make sure that you select the type of bankruptcy filing that will leave you in the best financial situation possible. It is also critical to have an attorney who understands bankruptcy law guide you through every step of the process. At the Maduabum Law Firm, LLC, we have helped many clients in New Jersey start over financially, so please call our office today at 973-732-1490 to learn more about how we can assist you.