New Jersey Bankruptcy Attorneys

Why do people file Chapter 7 bankruptcy?

Generally speaking, people who file Chapter 7 bankruptcy have large amounts of unsecured debts such as credit cards or medical bills that they are no longer able to pay.  Unemployment, unexpected medical expenses, or divorce may also prompt a person to file Chapter 7 bankruptcy. 

What will happen after filing for Chapter 7 bankruptcy?

After filing for Chapter 7 bankruptcy, an individual’s non-exempt property will be sold, and the proceeds will be distributed to creditors for a fraction of what was originally owed.  Once this is done, the bankruptcy court will discharge all remaining debt.  The creditors listed on your petition may no longer seek money on the discharged debt or take any other action, including telephone calls, letters and personal contacts.  However, those creditors not listed on your petition may still seek reimbursement, which is why it is essential to hire an attorney who will research and list all of your creditors.

Why do people file Chapter 13 bankruptcy?

People will choose to file Chapter 13 bankruptcy if they have valuable property that is not exempt from liquidation, but want to keep this property.  If a debtor is behind on secured loan payments (like mortgage payments), Chapter 13 bankruptcy will allow them to repay these debts over a longer period of time while retaining their property.

How will bankruptcy affect my credit?

Bankruptcy will stay on a person’s credit record for a period of 10 years for Chapter 7 and 7 years for Chapter 13.  There is no set answer about how bankruptcy will affect a person’s credit, but not filing for bankruptcy and continuing to be delinquent on your debt will also adversely affect your credit score.  It is often better to file for bankruptcy, pay off all of your debt, and finally get a fresh start on your finances.  It is best for you to consult with a qualified and experienced bankruptcy attorney to discuss your options.

What kinds of debt will bankruptcy not take care of?