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Frequently asked questions about Bankruptcy
in New Jersey 

This section will explore questions that people wish to ask New Jersey Bankruptcy Lawyers.  Of course, when an individual comes in for a free Bankruptcy Consultation, these, as well as other questions are asked.   The following are general questions most NJ Bankruptcy Lawyers get asked the most.  Hopefully, we can answer some basic questions that you may have.  

Some frequently asked questions about Bankruptcy

1. Can I save my home?


Under New Jerseybankruptcy law, the answer simply is yes if your situation meets certain requirements. New Jersey Lawyers know that saving a home in New Jersey, depending on the amount of equity in the home, is entirely possible. In a Chapter 13 NJ Bankruptcy, the amount of Equity a debtor has does not matter. Chapter 13 is a wage earner’s plan that allows the debtor to catch up with the arrears they have. Thus, the Chapter 13 debtor is allowed to pay his back payments as long as he can keep up with his current ones. Chapter 7 Bankruptcy in New Jersey allows the debtor to keep their home if they do not have too much equity. The debtor can eliminate unsecured debt as long as he is current on the mortgage and keep his home.




2. From start to finish, how long does a Bankruptcy take in New Jersey?


In a Chapter 13 Bankruptcy, the time period for a Bankruptcy is 36 to 60 months. The Chapter 13 rules will dictate if the plan will be for 36 or 60 months. A Chapter 7 Bankruptcy in New Jersey will usually be between 4 to 6 months from the filing date till the discharge. The time from the Meeting of Creditors till discharge is 60 days.




3. Will I lose all my assets if I file Bankruptcy?


No. This is one of the major worries most potential bankruptcy clients have. That is why it is so important to get good legal advice. Ask any bankruptcy Lawyer, whether they are a bankruptcy Lawyer in New Jersey or not, and you will be relieved with the answer. bankruptcy law firms have the expertise to relieve your worry and bring peace to you. Within the bankruptcy Rules, debtors are allowed exemptions that can cover most of, if not all,of their assets. So, in a Chapter 7 bankruptcy in New Jersey, the debtor typically can protect the vast majority, if not all of their assets. If the debtor wants to protect an asset they are in danger of losing, they can always convert over to a Chapter 13 New Jersey bankruptcy to make sure all their assets are safe. In a Chapter 13 NJ bankruptcy, the debtor can protect their assets and pay any back money they owe. The debtor sort of reorganizes their affairs and repays the arrears in order to catch up. Their assets are protected and after either the 36 or 60 month payment plan period, the debtor is all caught up and has all their assets in tact.




4. Basically, what is a Chapter 7 Bankruptcy anyway?


In a Chapter 7 bankruptcy in NJ, the debtor is wiping out their unsecured debts. The debtor can retain secured assets if the exemptions protect them. If not, the debtor can always convert to a NJ Chapter 13 bankruptcy and protect all their assets with the Chapter 13 reorganization plan.




5. Should I file Bankruptcy?


If you are having the typical financial issues that most people experience when in financial trouble, then you should consider Bankruptcy. If you have lost your job and cannot keep up with your bills, or are being harassed by creditors, Bankruptcy may be right for you. Other things to look for are wage garnishments and creditors trying to foreclose your home. Bankruptcy will help you get out of your credit jam and in a better place financially by providing you the Fresh Start that Bankruptcy Law is famous for. Call us for a Bankruptcy Consultation at no charge to find out if Bankruptcy is right for you.




6. If married, do both spouses have to be part of the New Jersey Bankruptcy?


Simply, both spouses do not have to be part of the NJ Bankruptcy if the majority of the debts are in only the one spouse’s name. The non-participating spouse can save their credit rating by going this route.




7. What’s the difference between Chapter 7 and Chapter 13 Bankruptcy petions?


In a Chapter 7 Bankruptcy, the individual (Debtor) can eliminate or extinguish most types of debt. Credit cards, medical bills and all sorts of unsecured debt are eliminated using Chapter 7. Unsecured debt is debt that is not tied to a physical asset such as a home or a car,which are considered secured assets. However, even if you have a secured asset such as a home or car, you could possibly seek relief using Chapter 7 if the amount of equity you have in the asset is low enough to be protected by the Chapter 7 rules. If not, and you have too much equity in the secured asset, the individual debtor can simply use the remedy of filing a Chapter 13 Petition. By using Chapter 13, the individual debtor will not lose their asset because Chapter 13 protects the asset and allows the individual debtor the opportunity to catch up on back payments. The debtor is given a payment plan to catch up on their back payments. These payment plans last either 36 or 60 months.Thus, this is how many individuals save their home or cars from repossession.




8. Can I ever get credit again?


The purpose of the Bankruptcy system is to give the debtor a Fresh Start. It is certainly possible to rebuild your credit after Bankruptcy. During your representation by our firm, we go over some techniques that can help. Our goal in representing the debtor is to not only eliminate your debts, but to show you how to achieve and retain good credit long term.




9. Can loans be modified?


Yes, mortgage loans can be modified. In appropriate situations, our office can help you modify your mortgage loan and possibly eliminate the need for Bankruptcy all together. At our office, our concern is guiding the client towards the best outcome. Often, Bankruptcy is not the only option and we help the client using other methods as well.




10. Can I save my car?


Yes. A car is a secured asset. Back payments can be made up using Bankruptcy. Also, if the value of the car is below the loan balance, Bankruptcy allows the individual to adjust or restructure the car loan. Thus, the car loan balance is lowered to match the value of the car, which can save a lot of money.




11. Are tax debts dischargeable in Bankruptcy?


There are a great many tax debts that are not dischargeable. However, if the tax debt is for income tax, it may be possible if the Debtor can meet certain strict requirements of the Bankruptcy Code.




12. Is my pension or retirement account safe in a Bankruptcy or will I lose it?


Generally speaking, most forms of retirement accounts are protected in Bankruptcy. Thus, 401Ks, 403s, ERISA and IRAs are safe and will not be touched by creditors if you file for Bankruptcy.