Will I be eligible for a fresh start under the new bankruptcy laws?
While the Chapter 7 bankruptcy eligibility requirements have stiffened, many people are still eligible to obtain a fresh start by filing for Chapter 7 bankruptcy. Of course, your individual situation is unique and you would benefit most by setting up a free consultation with Veitengruber Law to go over the options that are best for you.
Which type of bankruptcy case is appropriate for me?
Chapter 7 bankruptcy requires a debtor to relinquish property that exceeds a certain monetary limit, so that the property can be sold to creditors. This is also known as liquidation. In most Chapter 7 cases, however, all property is exempt. The debtor keeps what little he or she has and can potentially have a fresh start.
Chapter 11 bankruptcy is used by businesses and individuals who have very large debts.
Chapter 12 bankruptcy is only used by family farmers and fishermen.
Chapter 13 bankruptcy is referred to as a “debt adjustment” because the debtor must file a plan to pay their debt based on their current income.
What are the New Jersey bankruptcy filing requirements?
A chapter 7 bankruptcy petition requires a broad range of information about the debtor’s financial status, including but not limited to a complete list of all:
- Collection agencies
- Debt schedules
- Unsecured claims
- Secured claims
- Unsecured priority claims
- Unexpired contracts and leases
- Ownership in real estate
- Ownership of personal property
- Cash value of any life insurance policies
When you set up a free consultation with Veitengruber Law, Mr. Veitengruber will discuss the filing requirements with you.
What property (if any) can I keep?
In a Chapter 7 case, a debtor can retain all property that the law says is exempt from the claims of creditors. You can choose between your exemptions under your state law or under federal law. In many cases, the federal exemptions are better. Federal exemptions include:
- $22,975 in equity in your home ($45,950 couple)
- $3,675 in equity in your car ($7,350 couple)
- $550 per item in any household goods up to a total of $12,250
- $1,550 in jewelry ($3,100 couple)
- $2,300 in things you need for your job (tools, books, etc.) ($4,600 couple)
- $1,150 in any property plus part of the unused exemption in your home, up to $11,500
- Your right to receive certain benefits such as Social Security unemployment compensation, veteran’s benefits, public assistance, and pensions – regardless of the amount.
(These numbers are as of 2015 and subject to change. Please verify the exemption limits during your free consultation with Veitengruber Law.)
Can I own anything after filing for bankruptcy?
Definitely! Exempt property is retained as well as anything that is obtained after the bankruptcy is filed. However, if the debtor receives an inheritance, a property settlement or life insurance benefits within 180 days of filing a Chapter 7 bankruptcy petition, that money or property will likely have to be paid to creditors if it is not exempt.
Can I be discriminated against for filing bankruptcy?
No.11 U.S.C. sec. 525 prohibits governmental units and private employers from discriminating against you because you filed a bankruptcy petition or because you failed to pay a dischargeable debt.
Will I have to attend court?
Yes. After filing a Chapter 7 bankruptcy petition, a meeting of creditors will be scheduled by the court within one to two months. This meeting is conducted by the trustee at the federal court level, in Trenton, Newark or Camden. Once you have retained Veitengruber Law, counsel will attend court and sit beside you to provide assistance. Questions will be asked to help the trustee determine if you have assets that can be distributed to creditors and if you have filed the petition in good faith.
How will bankruptcy affect my credit?
It is true that bankruptcy does put somewhat of a bad mark on one’s credit rating. However, the effect of bankruptcy can actually be less harmful than a long history of debts or judgments that remain unpaid. Many people who have filed for bankruptcy obtain or are offered new credit cards shortly after filing. Most lenders view a recently discharged debtor as less of a risk than one who is overloaded with debt. Additionally, a recently discharged debtor is now debt-free, and lenders know that he or she may not file for bankruptcy again for at least six years.
Will bankruptcy wipe out all of my debts?
Although bankruptcy will wipe out most of your debts, there are some exceptions. Bankruptcy will not normally affect child-support or alimony obligations, fines, some unlisted debts, loans that were received under false pretenses, debts that were the result of willful and malicious harm and most student loans. Mortgages and other liens not paid in a bankruptcy case may still attach to the property but not you personally unless you reaffirm the obligation. If the property is sold by the creditor, bankruptcy will wipe out your obligation to pay any additional money.
Are there any alternatives to filing for bankruptcy?
Debtors who have faced obstacles to paying off their debts when due have no doubt received more than their fair share of demanding letters and phone calls, and the thought of getting rid of their debts and the constant demands through bankruptcy can be quite appealing. Before making a decision to pursue that route, which can have long-term effects on credit rating and the ability to make large purchases like a home, debtors should consider other, less drastic alternatives.
If the debtor’s financial problems are only temporary, he or she may want to ask creditors to accept lower payments or payments that are scheduled over a longer period of time. Creditors may be receptive to these ideas if the debtor has been a prompt payer in the past, or if the specter of bankruptcy is raised, since creditors know that once a bankruptcy proceeding is initiated, they will probably collect nothing or at most only a portion of what is owed. In addition, creditors may wish to avoid the difficulties of a court proceeding to collect on the debt, which can be time-consuming and expensive. Veitengruber Law works with clients to provide them with all of their options, allowing them to make an informed decision before proceeding.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.