Being able to start over financially by filing for bankruptcy may be the best option for you as an individual or for your business.
The process of bankruptcy is complicated and if you are unfamiliar with the law, it can be confusing to navigate through on your own. At Carluccio, Leone, Dimon, Doyle & Sacks, our attorneys will walk you through the entire process of bankruptcy and make sure you understand the differences and the expected outcome. Each bankruptcy case is unique but ultimately every goal for each of our clients is meeting their debt relief goals.
Our firm can assist you with:
- Terminating harassing creditors from continuing to hound you for money.
- Determining whether or not you should file for bankruptcy or consider an alternative to bankruptcy, such as debt consolidation or debt settlement.
- Deciding whether you should file for Chapter 7 or Chapter 13 bankruptcy.
- Defend you aggressively if you are being threatened with foreclosure.
- Guide you through the loan modification process.
- Making sure all of your legal documents and paperwork are filled out correctly and filed on time.
- Keeping your case on track and that the bankruptcy process goes smoothly.
- Resolving any problems that could prevent a successful discharge of your debts.
- Restoring your credit after you have file for bankruptcy.
Chapter 13 bankruptcy is a reorganization whereas Chapter 7 bankruptcy is a liquidation.
Chapter 7 Bankruptcy is a liquidation where the trustee collects all of your assets and sells any assets which are not exempt. The trustee sells the assets and pays you, the debtor, any amount exempted. The net proceeds of the liquidation are then distributed to your creditors with a commission taken by the trustee overseeing the distribution.
Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged. In most Chapter 7 cases, the debtor has large credit card debt and other unsecured bills and very few assets. In the vast majority of cases a Chapter 7 bankruptcy is able to completely eliminate all of these debts.
You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts. To do so, you must sign a voluntary “Reaffirmation Agreement”. If you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt (or wipe-out) that debt again for eight years. You will still owe that debt and you must continue to pay it just as you were obligated to continue to pay it before you filed bankruptcy. In order to reaffirm the debt, you must also bring it current.
Under Chapter 13 Bankruptcy a debtor proposes a 3-5 year repayment plan to the creditors offering to pay off all or part of the debts from the debtor’s future income. You can use Chapter 13 to prevent a house foreclosure; make up missed car or mortgage payments; pay back taxes; stop interest from accruing on your tax debt (local, New Jersey state, or federal); keep valuable non-exempt property (see New Jersey exemptions); and more. If you can stick to the terms of your repayment agreement, all your remaining dischargeable debt will be released at the end of the plan (typically three to five years). The amount to be repaid is determined by several factors including the debtor’s disposable income as is usually determined as part of the New Jersey Means Test. In addition, the total amount paid to creditors under the Chapter 13 plan must also be at least as much as creditors would have received if the debtor filed a Chapter 7 bankruptcy. To file Chapter 13 bankruptcy you must have a “regular source of income” and have some disposable income to apply towards your Chapter 13 payment plan.
Chapter 13 bankruptcy is generally used by debtors who want to keep secured assets, such as a home or car, when they have more equity in the secured assets than they can protect with their New Jersey bankruptcy exemptions.
If you are considering whether bankruptcy may be the right option for you contact us today to schedule a consultation or for more information on how we can help you.