Chapter 7 bankruptcy (or a straight bankruptcy) is a liquidation proceeding. The debtor turns over all property that is not exempt to the bankruptcy trustee who then sells it to raise cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".
One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.
Chapter 13 Bankruptcy (or a reorganization bankruptcy). Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. If you have non-exempt property you would like to keep this may be the chapter for you.
There will be more hoops to jump through and tougher regulations on Chapter 7 bankruptcy, forcing some people to have to file chapter 13, but in most cases you will be able to file chapter 7 with only a little bit more effort than before!
For more information please refer here.
Yes! Once you file bankruptcy papers creditors are required by law to stop harrassing you.
No, your spouse will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. However, In community property states, either spouse can contract for a debt without the other spouse's signature on anything, and still obligate the marital community. There are a few exceptions to that rule, such as the purchase or sale of real estate; those few exceptions do require both spouse's signatures on contracts.
Your bankruptcy lawyer will be able to guide you in this regard.
Bankruptcy filings are public records, so it is possible people may find out, but in ordinary cases no one will ever find out. Your bankruptcy will remain on your credit record for 10 years.
The most common reasons for filing bankruptcy are:
Unemployment, Large medical expenses, Seriously overextended credit and Marital problems. 50% of bankruptcies are caused by medical bills.
In a bankruptcy, assets in excess of your allowed personal exemption, or non exempt assets such as, real estate, automobiles and boats will be liquidated by the bankruptcy lawyer.
You may file bankruptcy again eight years after your previous filing.
Whether a debtor keeps credit cards after filing bankruptcy is up to the credit card company. If you are discharging a credit card they will cancel the card unless you reaffirm the debt. Even if you have a zero balance the credit card company might cancel the card.
You can apply for a "Secured Credit Card" to improve your credit rating.
3 - 5 months after bankruptcy is filed. At that time all debts (with some exceptions) are written off.
No, you will not. It will cost you less money and you will rebuild your credit rating faster if you file Chapter 7 or Chapter 13.
(Secured Credit Card)
Yes! A number of banks now offer "Secured Credit Cards" where a debtor (you) puts up a certain amount of money (as little as $200) in an account at the bank to guarantee payment. Usually the credit limit is equal to the security given and is increased as the debtor proves his or her ability to pay the debt. Two years after a bankruptcy discharge, debtors are eligible for mortgage loans on terms as good as those of others with the same financial profile, who have not filed bankruptcy.
No!
Please refer to our Exemptions page
Individuals may file chapter 13 bankruptcy petitions if they:
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Reside, have a domicile, a place of business, or property in the United States, or a municipality;
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Have a source of regular income; and on the date the petition is filed owe less than $307,675 in unsecured debts and less than $922,975 in secured debts. Note: These amounts adjust regularly to keep up with the cost of living.
Corporations and partnerships may not file a chapter 13 bankruptcy petition. If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition and should check 11 U.S.C. sec. 109(g).
Most unsecured debt is erased in a bankruptcy
except for:
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Child support and alimony, DUI related judgments, student loans, and recent income taxes. Check with your lawyer for a full list.
It costs $299 to file a Chapter 7 bankruptcy. A bankruptcy lawyer's fees vary but should be in the range of $1,000 to $2,000. Many bankruptcy lawyers will give you a free initial consultation. You can keep the fees down by being well organized and well prepared. You may also be able to keep the fees down by not requiring the lawyer to attend the meeting of creditors with you. Check this with your lawyer. In some states such as Massachusetts, attorneys must attend the Section 341 meeting with the debtors otherwise attorneys are deemed to have NOT represented the debtors. (The 341 Meeting).
According to the US Census the average family incomes in New Jersey are:
Family Size / Average Income
| 2-person families |
63,026 |
| 3-person families |
80,999 |
| 4-person families |
94,441 |
| 5-person families |
92,225 |
| 6-person families |
94,004 |
|
