Step-by-Step Guide to Bankruptcy in New Jersey

New Jersey bankruptcy might be an option to eliminate your debt

Please do not hesitate to call one of our bankruptcy lawyers in New Jersey to discuss your bankruptcy case.

Many of us may find ourselves in debt quickly due to unforeseeable circumstances.

Larger installments, such as mortgage payments, auto loans and unexpected medical expenses, can quickly add up, making it difficult for people to get out of debt.

With a plan and a trusted attorney, bankruptcy can help you get rid of any lingering debts or payments.

Bankruptcy can seem scary to anyone who is dealing with debt.

Bankruptcy may be an option in some cases to reorganize and structure your debt so that debt payments are more affordable for both you and your creditor.

In these cases, a bankruptcy attorney can be crucial in helping you navigate through this financial unexpected and challenging situation.

Based on your circumstances, BankruptcyHQ can help you decide the best way for you to file bankruptcy. We can deal with all types of bankruptcy, unlike other companies.

Bankruptcy Types for New Jersey

If you’re facing financial problems in your personal or professional life, you might consider declaring bankruptcy. “

It is crucial to know the basics of bankruptcy law, and when bankruptcy should be filed. It is essential to understand bankruptcy law and when you should file bankruptcy.

Our experienced bankruptcy lawyers are dedicated to giving you the best advice possible. After listening to your concerns, we will discuss your options for debt relief.

There are many forms of bankruptcy. It can make a big difference in your life and your long-term recovery. We are here to answer all your questions and help you make the best decision about your bankruptcy case.

What’s a Chapter 7 bankruptcy?

Chapter 7 refers to a liquidation bankruptcy.

Many types can be eliminated, wiped off, or discharged by a chapter 7

Unsecured debts such as medical bills and credit cards can be forgiven. Individuals, married couples, companies, and partnerships can all file Chapter 7 bankruptcy if eligible.

Chapter 7 filers often have trouble meeting their monthly recurring payment.

People filing Chapter 7 bankruptcy do not have any assets.

Debtors must pass the “means test” to be eligible for Chapter 7 bankruptcy.

If you fail to meet these requirements, bankruptcy filings will be required. If you fail to meet these criteria, bankruptcy filings won’t be possible.

Chapter 7 bankruptcy allows debtors to keep some assets while the rest are distributed among creditors pro-rata to partially pay the debt.

  • Stop garnishment of salaries and tax liens to avoid repossession of a vehicle.
  • Organize your financial affairs.
Credit Harassment must be stopped immediately

The bankruptcy chapter allows the debtor to keep all their assets (home, vehicle, and 401K) without them being liquidated. The debtor can then be freed from all financial obligations.

All collection activities against you must stop immediately after you file Chapter 7.

Your credit file will be kept for ten (10) years after a bankruptcy filing. There are many options to rebuild your credit.

The bankruptcy court appoints a trustee to evaluate the debtor’s assets and divide them into exempt and nonexempt properties during a Chapter 7 liquidation proceeding.

The trustee can either sell the property that is not exempt or give the proceeds to unsecured creditors. Secured debt cannot be liquidated because the secured creditor can take the collateral. The debtor will not be required to pay any unsecured obligations, such as hospital expenses or credit card debts.

What is Chapter 11 Bankruptcy, and how does it work?

Chapter 11 bankruptcy is the most common option for companies, partnerships, and single-proprietorships looking to reorganize and liquidate their debts while negotiating payment arrangements and terms with creditors.

Chapter 11 protection is possible for those who owe more than $1 million in secured debts or more than $330,000 unsecured debt.

What can Chapter 11 offer?

Chapter11 bankruptcy (corporation by the debtor) does not put shareholders’ personal property in danger.

A sole proprietorship (owner/debtor) has its own identity. A sole proprietorship (owner/debtor) has a distinct identity. The partners may be required to file for bankruptcy protection.

The debtor in possession assumes the fiduciary role and has all rights and powers of a Chapter 11 trustee. The Bankruptcy Code and the Federal Rules of Bankruptcy Procedure outline the duties and responsibilities of the debtor in possession.

These authorities and responsibilities include reviewing and objecting to claims and accounting for the property. They also have the power to submit information reports, as required by the court and United States trustees. This includes the ability to hire appraisers, auctioneers, and accountants to help the debtor in bankruptcy proceedings.

Other duties include filing tax returns and other reports as ordered by the court.

What is Chapter 13 bankruptcy?

Chapter 13 allows debtors to enter into an interest-free repayment plan.

The bankruptcy plan typically lasts between 3 and 5 years. In most cases, the debtor will pay less of their obligations. The debtor’s assets, median income, and outgoings will determine the amount and length of the plan. 

Creditors are forbidden from engaging in collection efforts or bringing any litigation during the case. If the petition is granted, these creditors will be dismissed and wiped out. Chapter 13 bankruptcy is highly effective because it allows debtors to avoid foreclosures, sheriff sales, repossessions, and utility shutoffs while still catching up on secured debt.

Chapter 13 bankruptcy is where the debtor proposes a plan for repaying all creditors over a time period, usually from future income. However, it must adhere to the restrictions o bankruptcy laws.

Chapter 13 cases can be advantageous because they allow the debtor the opportunity to catch up on auto loans or mortgages without the fear of repossession or foreclosure. It also allows the debtor to keep both exempt and nonexempt property. 

The debtor’s plan describes how the debtor plans to pay current expenses and repay all outstanding debts. You might be able to, by filing Chapter 13: 

  • eliminate most of your credit card debt, restructure your payments
  • keep equity in your home 
  • keep your vehicle
  • stop wage garnishment or tax liens

Chapter 13 suits are filed by people who want to keep a house or other real estate from being foreclosed. This allows the debtor the option to either sell the house or make up any missed mortgage payments. 

A Chapter 13 petitioner can submit a 60-month plan for catching up or resolving mortgage payments. If you are behind on $60,000 in mortgage payment, you may suggest a $1,000 per-month payment plan for 60-months to catch up.

You may also be eligible to pay just 5% of the total credit card debt if you are behind on your mortgage payments. This depends on what plan you choose.

If you owe $100,000 on your credit card, for example, you might only be able to pay $5,000 throughout a 60-month agreement. Your plan payment may be enough to calculate your trustee’s commission. Our firm will also accept a portion of its legal fees as part of the restructuring plan.

The debtor is protected from creditors like mortgage holders and other lien holders as long as they make the scheduled payments. The plan calls for monthly payments of three to five years to the bankruptcy trustee. These payments can be made automatically by setting up payroll deductions.

Which Bankruptcy Option is Right for You?

After being in debt, we help individuals and businesses to regain control over their finances. Our New Jersey attorneys will assess your case and give you advice. Bankruptcy might not be the right choice for you. 

Our firm can help you decide which option is best for you. We will explain the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Sometimes it is better to avoid bankruptcy than to reach an out-of-court settlement with creditors. 

Our firm will talk with you about the possibility of an Assignment for Creditors, a New Jersey-based option to bankruptcy. The best way to ensure a successful bankruptcy case or an out-of-court settlement is to get the right advice right away. This tool will help you determine which chapter to submit your document under.

There are three types of bankruptcy. Chapter 7, Chapter 11, and Chapter 13. It can make a big difference in your life to know which option is right for you. BankruptcyHQ handles all types of bankruptcy cases. We can answer your questions about bankruptcy and recommend the best course for you. Here is a quick overview of the various debt reduction options available:

There are many options for declaring bankruptcy in New Jersey

Before deciding whether bankruptcy is right for you, it’s essential to weigh all options. There are four options for bankruptcy in New Jersey. Not all are appropriate for everyone.

Take Care of Your Creditors

First, and most importantly, contact your creditors to request a payment plan. Be honest about your financial situation and explain why you are unable to pay the amount. Many creditors will work with you to recover the money owed to them. They might be willing to reduce your payments, extend your payment term, or grant you an extension.

Weaknesses

Creditors might be willing to work with you if they are approached directly. You and them should reach an agreement. You will benefit significantly if they can work out an affordable payment plan, lower your interest rate, and agree to a smaller settlement than what you owe. 

This will save you money and protect your credit. This is a complicated and lengthy process. You should be prepared to speak on the telephone for hours, if not days, and use your negotiation skills. 

Remember that any settlement you make with creditors for less than what you owe could be considered taxable income according to IRS regulations. A $3,000 settlement of a $10,000 credit card debt could result in $7,000 in taxable income. You do not have to pay anything if you file bankruptcy. The debt that is wiped out or dismissed is exempt from tax.

Debt Consolidation

A type of consolidation loan, debt consolidation loans, allows you to consolidate all your debts into one loan.

Debt consolidation loans are another option. If you are approved for a New Jersey debt consolidation loan, you will be able to apply for a loan that will pay all your bills. This will allow you only to pay one bill per month. Consolidating debt with loans will save you money over the long-term affordable payment plan because they have lower interest rates than credit cards.

Weaknesses

A good credit score is required to be approved for a consolidation loan with a low-interest rate. Although any loan can reduce your monthly payments, a loan with high-interest rates, like 29 percent, may end up costing you more in the long term. You will need to do some math to determine if this will benefit you over the long term.

Credit counseling

Credit counseling could be an alternative to bankruptcy in New Jersey. If you sign up for credit counseling, your creditors might be more willing to accept lower interest rates and smaller payments. 

When you sign up for these programs, money is usually placed into an escrow account at the credit counseling agency. Your credit counselor will then use your deposits to pay your creditors under the payment plan. 

Your credit counseling agreement will require you to agree not to use or apply for additional credit until your credit counseling program has ended.

Weaknesses

Credit counseling can help improve your credit score, but it also comes with more significant dangers than filing bankruptcy. An automatic stay protects you from any legal action. It also prevents creditors repossessing or foreclosing upon your property if you file bankruptcy. 

The automatic stay is not available to you. However, the court can provide additional protection if a credit counseling agency comes up with a payment schedule. If you fail to make a payment during credit counseling, your creditors could take you to court. 

Some creditors might cooperate with credit counseling services, while others may refuse. Credit counseling can help you repay a more significant percentage or all of your debt. Bankruptcy will leave you with no or minimal has an obligation.

It is a bad habit for anyone to take no action

Some people choose to do nothing. If you don’t have any income or assets or are unable to value your assets, you may be “judgment-proof.” If you don’t have any purchases to repay creditors, legal judgments against you may be considered “judgment proof.” They may forgive your debt even if you don’t pay any. Your creditors could pursue you for payment if your financial situation changes, and you can repay some or all of the debt. Creditors will continue to try to get as much money from you as possible, and they might harass you.

Consult a New Jersey Bankruptcy Lawyer

Consult a New Jersey bankruptcy lawyer if you have financial difficulties and don’t know if bankruptcy is right for you. A New Jersey bankruptcy attorney will help you make the right decision. Contact BankruptcyHQ to schedule a consultation with a bankruptcy lawyer.

What is the New Jersey Bankruptcy Process?

Meeting with an Attorney

Setting up a meeting with a competent bankruptcy attorney in your state should be the first step in filing for bankruptcy. A list of all of your assets and obligations should be provided to your attorney. To put it another way, you should tell the attorney everything you possess and owe.

Documents Needed to File for Bankruptcy

The lawyer should request a list of papers about your financial situation. For example, your most recent two years’ tax returns; six months’ worth of paystubs or other evidence of income from any source; an appraisal or valuation on any property or real estate you own;

a list of the names and addresses of any creditors owed to you; statements from bank accounts, stock accounts, or other investment accounts; statements on 401K, pension, or retirement plans; and your spouse’s paternity certificate. This is a basic list of things that should be given, but more information may be required since everyone’s circumstances vary.

Bankruptcy Petition Preparation

The attorney drafts a bankruptcy petition after meeting with you and gathering all of the relevant financial facts. The bankruptcy petition may be filed under Chapter 7, Chapter 12, Chapter 13, or Chapter 11, depending on your circumstances. 

In a Chapter 7 bankruptcy, the processes described below are the general stages. The petition is a document that summarizes your current financial status, including a summary of your assets, obligations, current income, and disposable money (or budget situation).

A bankruptcy petition may now be filed online. Because the bankruptcy court requires electronic filing, the practicing bankruptcy lawyers and law firms must submit the petition electronically. 

The petition is converted into a PDF document and submitted electronically via PACER. Public Access to Court Electronic Records, or PACER, is an acronym for Public Access to Court Electronic Records.

341a Creditors’ Meeting

Following the bankruptcy petition filing, the court sends out a “Notice of Commencement of Case.” This notification will be sent to all of your creditors that you owe money to. 

The automatic stay prevents all of these creditors from suing or pursuing the debtor in any manner. The case number and the date, time, and location of the 341a creditors’ meeting are all listed on the form. 

This 341a conference is the first hearing in a bankruptcy case. The debtor and attorney meet with the court-appointed trustee to examine the petition and take evidence on the petition’s correctness and other financial problems concerning the debtor’s financial affairs. Any of the debtor’s creditors have the right to appear in court and interrogate them.

Get a Discharge Order

Creditors or the trustee have 60 days after the 341a meeting to submit a complaint objecting to the debtor’s discharge. Alternatively, creditors or the trustee may raise objections to the bankruptcy petition for a variety of reasons. 

If no one objects during the 60-day period, the debtor will be discharged. The discharge is the court’s final decision wiping away the person’s debts who filed for bankruptcy.

In a Chapter 7 bankruptcy, there are a few basic procedures to follow. If additional legal difficulties or problems emerge, the case may go in a very different direction. In Chapter 11, Chapter 13, and Chapter 12 bankruptcies, there are also other complex procedures. For additional information on different kinds of bankruptcy, see this link: The Differences Between Bankruptcy Chapters 7, 11, and 13.

When you’re thinking about filing for bankruptcy, the first step is to locate the finest New Jersey Bankruptcy Lawyer you can. We realize that life is unpredictably unpredictable here at BankruptcyHQ. 

We recognize that things don’t always go according to plan, and financial responsibilities may be out of control quickly. We understand that declaring bankruptcy wasn’t on your radar when you first started, but you’ve arrived and needed assistance.

The legal counsel you choose to assist you in making this tough choice may significantly impact how things end out.

We’re dedicated to assisting you in overcoming today’s obstacles in a manner that best prepares you and your family for the future. While filing for bankruptcy may be the best option for you to move ahead, understand how to file bankruptcy and which kind of bankruptcy is appropriate for you.

Your New Jersey Bankruptcy Lawyer should be able to educate you on all of your choices, attentively listen to you so that they know your position, and then be dedicated to keeping you informed at all times. 

At BankruptcyHQ, we want to make sure that you feel better when you leave our offices than when you came in. We understand that declaring bankruptcy is upsetting and stressful, and we want to help you get back on track as soon as possible.

The Most Common Bankruptcy Myths

Because their lives have spun out of control, most of our bankrupt clients have no option but to declare bankruptcy. Some of our customers have lost their jobs, are getting lower-income, have been severely sick or injured, have divorced, or have just gotten themselves into debt. 

Our customers are decent individuals who deserve to be protected by bankruptcy laws. Our bankruptcy lawyers are shocked by some misconceptions about bankruptcy that persist, particularly misunderstandings regarding the new bankruptcy rules adopted in 2005. 

The credit card industry spreads some of these misconceptions to frighten individuals away from bankruptcy. In our everyday practice of defending debtors in default, we have heard about several frequent misconceptions from our clients.

Myth #1: Because of the new laws, you are unable to file for bankruptcy.

The most common misconception nowadays is that you can no longer file for bankruptcy due to recent changes in the law. This isn’t correct. The Bankruptcy Reform and Consumer Protection Act (BAPCA) of 2005 did not prohibit individuals filing for bankruptcy. 

It only altered a few bankruptcy laws. Anyone who owes money may still apply for bankruptcy. You may file a new bankruptcy chapter after the one you already have. 

According to a survey conducted in our office, changes in the legislation impacted fewer than 5% of our current customers. As a result, the new rules have had less effect on the bankruptcy environment than expected.

Myth #2: Your Bankruptcy Will Be Publicized Throughout the World

Another bankruptcy myth is that the whole world learns about it. This isn’t correct. Because it is a public record, it will appear on your credit report. However, apart from your creditors and attorney, few individuals know that you have filed for bankruptcy.

Myth #3: If you file for bankruptcy, your wages will be garnished.

Another common misconception is that your wages will be withheld. This isn’t correct. In bankruptcy, your wages are not withheld; if they are, the bankruptcy will halt the garnishment.

Myth #4: Your credit score will never improve.

A fourth misconception is that your credit score will never improve. This isn’t correct. True, your bankruptcy will show up on your credit record for ten years. However, you may restore your credit long before the ten-year period expires. 

A year following release, we’ve seen customers buy a home and obtain a mortgage. Additionally, it is documented after the bankruptcy is finished and discharged, thereby erasing your prior credit history.

Myth #5: Bankruptcy may only be filed once.

One common misconception is that you may only declare bankruptcy once. This is untrue. Every eight years, you may submit a chapter 7. Depending on your circumstances, you may need to file Chapter 13 several times. Chapter 13 may be filed four years after chapter 7. 

As a result, you may declare a chapter 7 bankruptcy and have all of your debts forgiven. If you have financial difficulties again four years later, you may file a chapter 13 bankruptcy and have a significant amount of your debt discharged. 

These laws have numerous legal intricacies, so you should always check with an attorney in your state before deciding whether or not to file bankruptcy.

Myth #6: If you file for bankruptcy, you will lose all of your assets.

Another misconception is that when you file for bankruptcy, you lose everything. In a bankruptcy, the majority of my clients keep all of their exempt assets. You may wipe away all credit card debt and other unsecured obligations through a chapter 7 bankruptcy and start over. 

If your assets are worth more than your allowed exemptions, you may file a chapter 13 or chapter 11 reorganization plan to keep them. Contact one of our New Jersey or New York bankruptcy lawyers to learn more about your exemptions and what you may retain.

Do You Require the Services of a Bankruptcy Attorney?

  • Do you find yourself burdened by a mountain of debt?
  • Do you ever wonder whether there is a way to get out of debt?
  • Has bankruptcy crossed your thoughts or come up in conversation?

If you answered “yes” to any of these questions, it might be time to speak with a bankruptcy attorney. Nobody wants to file bankruptcy since life is full of surprises and curveballs. Still, our lawyers are here to assist you in understanding your choices and manage the bankruptcy process if it is appropriate for you.

There are many misconceptions and misunderstandings surrounding bankruptcy, and competent bankruptcy attorneys can assist you to begin to understand if bankruptcy is the best choice for you or if you have alternative options.

Our website is chock-full of helpful information on all aspects of bankruptcy. We have experience with Chapter 7 bankruptcy, Chapter 13 bankruptcy, and Chapter 11 bankruptcy, so we are prepared to explain all of your options.

As bankruptcy attorneys, we have a thorough knowledge of the kinds of problems that may lead you to contemplate bankruptcy, as well as a deep sympathy for those problems. As New Jersey bankruptcy attorneys, we are also highly familiar with the specific legal issues in our beautiful state.

Is it Possible for Me to File for Bankruptcy?

Eligibility for Bankruptcy in New Jersey

Filing for bankruptcy is an extensive choice, and you should only do so after getting professional advice and knowing all of your alternatives and possibilities. While we are ready to assist you if you have already decided that bankruptcy is the best choice for you, we are also here to ensure that you make the best decision possible (Chapter 7 Bankruptcy, Chapter 11 Bankruptcy, or Chapter 13 Bankruptcy). We also want to make sure that we discuss a better alternative for your circumstance with you.

What factors should I consider while deciding whether or not to file for bankruptcy?

If you can no longer make your credit card payments, it may be time to consider declaring bankruptcy. If your earnings are garnished as a result of a judgment, you might consider filing for bankruptcy. 

If you face foreclosure and are behind on your mortgage payments, bankruptcy may be the best option. If you’re drowning in debt of any sort and don’t see how you’ll be able to pay it off, it may be time to consider bankruptcy. 

If any of these apply to your present circumstances, please contact us to assist you in determining if bankruptcy is the right option for you.

Call us at (855) 756-2569 or set up a free appointment with a New Jersey bankruptcy attorney.

We can provide you with a no-obligation bankruptcy consultation over the phone to explore your alternatives.

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