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Fedoroff Firm LLC Jan. 29, 2024

Preparing for Bankruptcy

Struggling with debt is like trying to swim against a strong current; the waves of bills and notices threatening to pull you under. Perhaps you've encountered unexpected life hurdles: a job loss, a medical emergency, or a significant business setback. Maybe you're constantly worried about losing your home or facing lawsuits from creditors. The fear can be paralyzing, but remember, you have options. 

Fedoroff Firm LLC, led by the experienced Attorney Vera Fedoroff, assists those grappling with financial distress in Howell, New Jersey, and nearby townships like Jackson, Wall, Brick, and Freehold. With over 20 years of legal practice, Attorney Fedoroff has guided countless clients through the maze of bankruptcy laws, helping them secure a fresh financial start.  

Chapter 7 Bankruptcy  

Chapter 7 bankruptcy, sometimes referred to as "liquidation bankruptcy," is designed to help individuals with limited income who can't pay back their debts. In essence, it involves selling off your nonexempt assets to repay creditors. Sounds scary, right? But don't fret just yet. Attorney Vera Fedoroff is skilled at strategically using exemption schedules to protect your most prized possessions (your home, car, and personal belongings) from liquidation. Also, Chapter 7 cases are usually wrapped up in less than six months, giving you a quick path to financial relief.  

Chapter 11 Bankruptcy  

Unlike Chapter 7, Chapter 11 bankruptcy is primarily for businesses struggling financially. It provides an opportunity for companies to reorganize their finances while continuing operations. The firm, under the guidance of its management, proposes a plan to manage outstanding debts, which must meet specific criteria. It should be feasible, fair, and made in good faith for the best interests of creditors. However, individuals who don't qualify for Chapter 7 or 13 can also use this option. 

Chapter 13 Bankruptcy  

Chapter 13 bankruptcy is another excellent tool for individuals with a steady income. Unlike Chapter 7, this option doesn't involve liquidation. Instead, it focuses on reorganization. You'll be required to make monthly payments as part of a court-approved plan. This repayment plan, typically spread over 3 to 5 years, involves consolidating outstanding debts. It's particularly beneficial if you have valuable assets that might be vulnerable in a Chapter 7 liquidation.  

Preparing for Bankruptcy Step-by-Step

While bankruptcy can seem overwhelming, it doesn't have to be. Here's a step-by-step guide to help you prepare for this process effectively: 

  1. Maintain a Low Bank Account Balance: Aim to have a bank account with a low balance. This move is essential as it protects your funds when preparing for bankruptcy. 

  1. Contact the Bankruptcy Trustee: If your bank account gets frozen, immediately contact the bankruptcy trustee. Their role is to manage your bankruptcy case and preserve your assets. 

  1. Avoid Paying Debts Before Filing: It might seem logical to pay off some of your debts, such as credit card or car loan balances, before filing for bankruptcy. However, doing so can complicate your bankruptcy proceedings. 

  1. Open a New Bank Account: If you owe money to the bank where you currently hold an account, consider opening a new account at a different institution. This move will prevent the bank from setting off what you owe against your deposits. 

  1. Prepare for Utility Payments: Be ready to replenish your utility deposit or time your bankruptcy filing to avoid falling behind on utility payments. 

  1. Stop Automatic Payments: Before filing for bankruptcy, stop any automatic payments, especially if you've authorized creditors to deduct funds from your bank account, paycheck, or credit card. 

  1. Notify Creditors: If you're unable to stop automatic payments before filing for bankruptcy, take the initiative to notify creditors yourself. 

  1. Hire a Local Bankruptcy Lawyer: For the best protection of your assets, consider hiring a local bankruptcy lawyer like Attorney Vera Fedoroff. Legal guidance can make the entire process smoother and more manageable. 

Bankruptcy and Real Estate  

One of the biggest misconceptions about filing for bankruptcy is that you'll lose your home. This is far from the truth. In fact, bankruptcy can often protect your home from foreclosure. Both Chapter 7 and Chapter 13 offer mechanisms to shield your primary residence. Chapter 7 protects your home during the liquidation process, while Chapter 13 gives you several years to catch up on missed mortgage payments.  

Debt Relief  

Bankruptcy offers both immediate and long-term debt relief. Upon filing for bankruptcy, you gain an automatic stay (a court order that temporarily halts creditors from taking action against you). This means they can't foreclose your home, repossess your vehicle, or file collection lawsuits against you. Completing a bankruptcy filing successfully usually allows you to permanently discharge unsecured debts, such as credit card debt, medical bills, and personal loans.  

Foreclosure Defense  

Foreclosure can be a terrifying prospect, but it's often avoidable. Direct negotiation with your mortgage lender can sometimes prevent a foreclosure. If negotiations fail, bankruptcy's automatic stay can offer protection. 

Discover Your Options  

Filing for bankruptcy can seem like a daunting task, but with the right guidance, it can be your ticket out of financial distress. Attorney Vera Fedoroff and her team at Fedoroff Firm LLC have the knowledge, compassion, and dedication to walk with you every step of the way. By understanding the basics of bankruptcy, you can make informed decisions about your financial future. Reach out to Attorney Vera Fedoroff to explore your bankruptcy options and regain control of your financial well-being.


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Facing financial hardships can leave us feeling cornered, but bankruptcy does offer a pathway to regaining control of our lives. If you find yourself contemplating bankruptcy or if you've already embarked on this route, questions about the future of your credit score might cloud your thoughts.

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Preparing for Bankruptcy  -

Struggling with debt is like trying to swim against a strong current; the waves of bills and notices threatening to pull you under. Perhaps you've encountered unexpected life hurdles: a job loss, medical emergency, or a significant business setback.

Read More