Thousands of people in New Jersey and millions around the country are saddled with astronomical levels of debt. These debts may be in their name, or their business may owe money to lenders or other businesses. Either way, they may feel as if there is no way out and that they will be in debt forever.
Fortunately, bankruptcy laws in the United States allow for people in certain situations to declare that they will never be able to pay their debts. By following legally prescribed programs, indebted people and companies may be able to discharge their debt for a fraction of its value. If you are facing serious debt, a New Jersey bankruptcy lawyer could help you choose the plan of action that is best suited for your needs and put that plan into action.
United States bankruptcy laws provide for six separate forms of bankruptcy. However, for most people and companies, Chapter 7—known as liquidation—and Chapter 13—known as adjustment of debts—are the available options. An experienced bankruptcy lawyer in New Jersey could provide assistance with these two methods or any other made available under federal law.
Many people prefer Chapter 7 bankruptcy, since there is no debt limit to a Chapter 7 bankruptcy – as there is with Chapter 13. A Chapter 7 filing involves the liquidation of personal or business assets to pay off debtors.
Once a person declares Chapter 7 bankruptcy, the court assigns a trustee to the case who gathers all of that person’s non-exempt assets for the purpose of selling them. Once this is done, the proceeds are distributed to creditors.
Once these creditors are paid, they can not seek any additional payments. In addition, once a bankruptcy proceeding is initiated, creditors can no longer contact debtors for payment.
Chapter 13 bankruptcy applies only to individual people who have a regular source of income. Furthermore, there are limits as to the level of debt that a person may possess prior to taking advantage of this program.
In short, the trustee for a Chapter 13 case meets with the creditors and explains that the debtor is reorganizing their debts and income. The court then orders the debtor to make regular payments that are transferred to the creditors. Once the debtor does this for three years, the debts are forgiven.
The basic idea of bankruptcy is that a person declares they no longer have the means to pay their debts and acknowledges this fact before a court. If everything goes according to plan, the debts are discharged and creditors can no longer pursue the debtor for payment.
In general, a person or company may declare bankruptcy at any time. However, bankruptcy may require a person to sell many of their personal assets to pay off debtors. Bankruptcy will also appear as a negative mark on a person’s credit report. Most lenders will hesitate to provide credit to people with a bankruptcy on their record.
Still, bankruptcy could provide essential relief to someone’s finances and peace of mind in the right circumstances. A New Jersey bankruptcy attorney could help individual clients determine if this is the right choice for them.Learn More
The idea of not being able to pay the bills keeps many people up at night, fearful of the constant collection calls and the public stigma of being in debt. However, many of those people could turn to the United States bankruptcy courts for relief. These courts could establish payment plans to discharge debt, or even order the liquidation of a company’s assets to satisfy creditors.
A New Jersey bankruptcy lawyer could help with this process by meeting with you to discuss your potential options, choose the one that best fits your needs, and follow the plan through to completion. Contact a dedicated local attorney today to get started on your road back to financial stability.