Debt Relief Attorney in Howell, New Jersey
Finding Financial Solutions in Jackson and Throughout Monmouth & Ocean County
If your debt load has become unbearable or your finances keep you awake at night, it may be time to consider filing a bankruptcy petition. You may first attempt to “work things out” on an individual, case-by-case basis with your creditors, but you may need to explore bankruptcy solutions if negotiations fail and your financial outlook does not improve.
All types of bankruptcy can confer temporary and permanent debt relief. The attorney at Fedoroff Firm LLC can help you explore solutions that will get you the Howell debt relief assistance that you need. She is familiar with all forms of bankruptcy and can determine which type of filing is most likely to benefit your financial situation. The team will work directly with you to effectively strategize on how to approach your case and make the most of your bankruptcy filing.
Understanding the Types of Bankruptcy
There are three options when you are considering a bankruptcy filing: Chapter 7, Chapter 13, and Chapter 11. The most common, quickest, and most straightforward bankruptcy for many individuals is a Chapter 7 case. When you do not qualify for Chapter 7 or when you are trying to save your home or some other asset that has significant value, you may consider filing a Chapter 13 case. When Chapters 7 and 13 will not work for you, Chapter 11 can serve as an alternative.
The key takeaways of each type of bankruptcy are:
Chapter 7 Bankruptcy is the simplest and most common form of bankruptcy. Qualifying for Chapter 7 bankruptcy requires a low income relative to the state’s average or low levels of monthly disposable income. Although called a liquidation bankruptcy, in most cases, nothing is actually liquidated. In the event of liquidation, nonexempt assets are sold to repay creditors, but you do not directly repay any debts yourself as part of the process. Exempt property – which can include some or all of the value of your home, car, and personal belongings – will not be sold. Chapter 7 is a relatively fast process, with most cases closing in under 6 months.
Chapter 13 Bankruptcy involves reorganization and repayment. There is no liquidation process, so your property will not be sold to repay creditors. However, you are expected to compensate creditors (the total amount of compensation depends on your particular circumstance). The Bankruptcy Court will use your average monthly disposable income to set a new consolidated payment plan that addresses your outstanding obligations. Chapter 13 is a much longer process than Chapter 7, with most cases lasting between 3 and 5 years.
Chapter 11 Bankruptcy is typically intended for business entities but can be used as an alternative for individuals who do not qualify for Chapter 7 or Chapter 13. It is also reorganizational in nature and involves your proposing a plan to address your debts and obligations. This plan could require the renegotiation of certain loan agreements or the sale of some of your property. The plan must be feasible, fair, and equitable, in the best interests of your creditors, and made in good faith. Creditors will generally have the opportunity to object to your plan and make counterproposals.
How Bankruptcy Provides Debt Relief
No matter what chapter you file, you will be granted immediate relief from your creditors. All bankruptcy types grant an automatic stay that precludes creditors from taking action against you. This means any foreclosures, repossessions, collection lawsuits, wage garnishments, and other types of aggressive creditor actions must immediately cease. As such, as soon as you file for bankruptcy, you get direct, immediate relief from your creditors.
Depending on which chapter you file, that relief may become permanent. If you file a Chapter 7 case and have few assets, the debts to your creditors may be discharged in their entirety. That means that you will never have to repay your debts.
If you file a Chapter 13 case, possess few assets, and have only a small amount of money left over after paying necessary household expenses, you might be able to have all of your debts discharged (with certain exceptions) or have your debts discharged after making a small payment toward your creditor body (5-10% of your total indebtedness). Of course, in a Chapter 13, the exact figures and percentages are calculated on a case-by-case basis and are specifically tailored to your particular financial situation.
Generally speaking, successfully completing the terms of a bankruptcy will entitle you to discharge unsecured debts, no matter which type of bankruptcy you file for. For a Chapter 7 bankruptcy, this means undergoing the liquidation process and getting signoff from the trustee assigned to your case. For Chapter 13 bankruptcy, you will need to complete the full terms of the court-ordered repayment plan.
Discharging unsecured debts means that you will no longer have any obligation to pay outstanding credit card debt, medical debt, unpaid utility bills, and personal loans, among others. Creditors will no longer be able to lawfully contact you, attempt to collect or take adverse action on account of these discharged debts.
While you cannot directly discharge secured debts in a bankruptcy filing, the process gives many the flexibility and time that they need to generate funds and catch up on missed payments. Remember, the automatic stay protects you from any creditor action for the duration of your bankruptcy. In a Chapter 13 case, that means you have as many as 5 years of protection. In that time, you can reorganize your finances and find new streams of income to cure a default on your mortgage, for example. The ability to discharge unsecured debts should also give you additional means to settle debts you cannot discharge.
Pursue Debt Relief in New Jersey
In many circumstances, a bankruptcy filing provides you with more effective debt relief than trying to “work things out” directly with creditors. Many financial institutions are unfortunately only interested in protecting themselves and will not extend you the empathy or leniency that you may need to make good on your obligations.
Our attorney at Fedoroff Firm LLC can help you explore tools that can give you the Howell debt relief assistance that you deserve. The legal team is fully familiar with how to leverage bankruptcy tools in New Jersey and can handle cases of all sizes and complexities. When you meet with Attorney Fedoroff, she will assess your financial situation, including the extent and types of your debt, and begin to strategize on what form of bankruptcy you may qualify for. She can help advise on what approach may be most effective in managing your debt. She is invested in your long-term success and sustainability and will do everything possible to help you navigate this difficult moment and find a fresh financial future.