Bankruptcy Lawyer in New Jersey
New Jersey Attorney Andrew J. Naideck has handled hundreds of bankruptcy cases with successful results. Most creditors are represented by attorneys looking after their own interests. It becomes important for you to work with a bankruptcy attorney with experience and knowledge to protect your financial interests. Our office will become your source for bankruptcy advice and representation.
What Is Bankruptcy?
Bankruptcy laws were enacted to provide good, honest, and hard-working individuals and businesses with a fresh start. The law allows people who cannot pay their bills the opportunity to eliminate their debt so they don’t have to live life with the stress of unpaid bills, creditor harassment, and the prospect of wage garnishments. If you are burdened with excessive debt and cannot move forward with your life, filing for bankruptcy protection may be the right option for you.
Chapter 7 Bankruptcy Protection
A Chapter 7 begins with the filing of a petition which, for the most part, initiates the “automatic stay.” This prevents creditors from taking any action against you to collect a debt without following strict rules. For the most part, they can’t call you, they can’t write you, they can’t sue you, and they can’t continue to sue you if they have already started a lawsuit, unless allowed to do so by the bankruptcy court.
Filing for bankruptcy protection automatically stays and brings to a grinding halt most lawsuits, repossessions, foreclosures, evictions, garnishments, attachments, utility shut-offs, and debt collection harassment. Call the Law Offices of Andrew J. Naideck today to schedule a free consultation to learn if filing for bankruptcy is the right option for you.
A Chapter 7 bankruptcy is designed for individuals who are unable to pay their unsecured debts. In many instances, the Debtor does not give up any assets. Businesses may also utilize Chapter 7 to discharge their liability on debts.
How Chapter 7 Bankruptcy Works
After filing for bankruptcy, a trustee evaluates the filer’s assets. The trustee’s job is to evaluate the debtor’s assets to determine whether there are assets not protected by available exemptions. At the time of your consultation with my office, I will carefully review your assets and exemptions to advise if any property would be available to the bankruptcy trustee for sale. Certain types of unsecured debt are not dischargeable, such as recent taxes, student loans, alimony, child support, fines and penalties, and criminal restitution.
Who Can File for Chapter 7 Bankruptcy?
Chapter 7 bankruptcy applies to individuals who seek to eliminate their debt by liquidating non-exempt assets. The value of your property is distributed among your creditors by a bankruptcy trustee, eventually leading to a discharge of indebtedness, which relieves the debtor of personal liability for those debts.
At the time our office prepares your bankruptcy petition, we will obtain information about your assets, debts, income, and prepare a list of the assets to be claimed as exempt. Various types of property are exempt up to certain values. The list of exempt property includes:
• Household Furniture & Furnishings
• Interests in Residential Real Estate
• Jewelry & Clothing
• Pensions and Qualified 401 K Plans
• Interest in Automobiles
• Tools of the Trade
• Certain Insurance Policies
A Chapter 7 bankruptcy allows you to:
• Keep all exempt property (house, car, etc.) if you are current on your payments
• Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.)
• Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
• Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
• Restore or prevent termination of utility service.
• Eliminate almost all unsecured (credit card) debt; medical bills; most personal loans; judgments; deficiency judgments associated with the repossession of a motor vehicle
• Eliminate all lawsuits or civil judgments
• Prevent any creditor from placing a lien on your home
• Have your driver’s license reinstated if it had been suspended due to having a car accident while your vehicle was uninsured or due to unpaid parking summons
Chapter 13 Bankruptcy Protection
A Chapter 13 bankruptcy allows you to:
• Reorganize and consolidate your debts and repay them interest free over a 36-month or 60-month period
• Stop foreclosure on your home if filed prior to sheriff sale
• Stop creditors from collecting any money from you
In order to qualify for a Chapter 13 bankruptcy, your repayment plan must be approved by the court. This approval will require gainful employment or some other verifiable source of consistent income. You must be able to demonstrate not only that you have the financial ability to pay the regular mortgage payment and your other living expenses, but also the economic ability to make an additional payment to the trustee to consolidate your outstanding debt.
Under Chapter 13, you are still obligated to make all future mortgage payments to the bank or mortgage company as before, plus an additional payment to the trustee to cover the outstanding consolidated debt amount.
A Chapter 13 bankruptcy is primarily designed to help individuals or couples who do not qualify to file Chapter 7. A Chapter 13 bankruptcy is primarily designed for individuals who earn a regular income. This type of filing is typically for people who are behind on their mortgage payments or their property is in foreclosure. In such situations, a Chapter 13 petition is filed to prevent or delay a sheriff sale.
The two major factors that determine which type of bankruptcy a person will file is how much disposable income is available after all expenses are calculated and how much equity remains in one’s home. A Chapter 13 reorganization plan would be eventually set up for a period of three to five years to allow a debtor time to catch up with the mortgage payments, refinance, sell, and/or pay other debts.
A Chapter 13 also works almost the same way if a person is financing a car and he or she is behind on their car payments and wish to retain the car. If a person or married couple has credit card debt, these debts could also be listed on the bankruptcy petition.
In a Chapter 13 bankruptcy proceeding, the debtor puts forward a plan to repay certain creditors over a period of time, usually from future income. One advantage of a Chapter 13 case can be that the debtor is allowed to get caught up on mortgages or car loans without the threat of foreclosure or repossession and is allowed to keep both exempt and non-exempt property.
The Debtor’s Chapter 13 Plan
The Debtor’s Plan is a document outlining to the Bankruptcy Court how the debtor proposes to dispose of the claims of debtor’s creditors. The debtor’s property is protected from seizure of creditors, including mortgages and other lien holders, as long as the proposed payments are made and necessary insurance remain in place. The plan generally requires monthly payments to the bankruptcy trustee over a period of 3 to 5 years.
Who Can File for Chapter 13 Bankruptcy?
Chapter 13 bankruptcy applies to both individuals and small business owners who wish to remain working while they restructure their debt repayment plan to settle part or all of their debt over an extended time period.
We pride ourselves on the personal, one-on-one approach we take in our client’s case. To schedule a free consultation with Andrew J. Naideck, contact us at (973) 235-9400.