Bankruptcy: Debtor's Rights
Our firm’s New Jersey bankruptcy attorneys represent people and business debtors having difficulty meeting their financial obligations. We counsel debtors on how to solve financial difficulties. We help debtors in negotiations to obtain resolutions which best serve their interests. When negotiations cannot resolve an issue, our attorneys have extensive experience in assisting people who seek bankruptcy protection through Chapter 11and 13 reorganizations, and Chapter 7 debt liquidation. We also defend debtors in bankruptcy litigation.
The firm's active bankruptcy practice includes the representation of debtors and trustees in cases ranging from insolvencies and liquidations to reorganizations, adversary proceedings, and other related problems. The firm’s attorneys appear regularly in the United States Bankruptcy Courts throughout the Northeast region and have in the past worked as either staff or special counsel for United States Bankruptcy Trustees.
Difficult times arise for many people through no fault of their own even in the best of times, and in times of financial turmoil the problems are compounded. People run into financial distress for many reasons beyond their control, such as layoffs, divorce, health issues and high interest credit cards. Sometimes, despite a lifetime of hard work, people find themselves in dire financial straits.
Bankruptcy protection can wipe out or reduce most debts. It can slow or stop the foreclosure process. Bankruptcy can stop repossession of cars or other property, and wage garnishments, and harassment from debt collectors.
Chapter 7 bankruptcy provides a “fresh start” for people in financial distress. The United States Bankruptcy Court issues a discharge which wipes out all of a debtor’s debt. Much of the debtor’s property is protected from seizure. If there is not a large amount of equity, it may even be possible for a debtor to keep their home.
Chapter 13 reorganizations offer some opportunities that Chapter 7 does not. Even though some debts need to be repaid, normally repayment is at very reduced rates. Chapter 13 allows some people to keep more property, than a Chapter 7 bankruptcy allows. Indeed, if a home is worth less than a first mortgage, it may be possible to keep the home and “strip off” second and third mortgages and greatly reduce the total amount due. Also, while the income thresholds are high, some people may be in financial distress but still make too much money to be eligible for Chapter 7 liquidation.
Our New Jersey bankruptcy attorneys are aware of the difficulties people can encounter, and their effect not just on finances, but on families. We have helped many debtors obtain relief through bankruptcy protection under both Chapter 7 and Chapter 13.
The best of businesses can run into financial hardship through no fault of their own. When clients are late paying bills or go out of business altogether, when business in a particular area dries up, or when a bank shuts down a line of credit, it may become impossible for even the best managed companies to make ends meet.
Some businesses can benefit from a Chapter 11 reorganization. Chapter 11 bankruptcy protection gives businesses (and sometimes people) “breathing room” to reorganize and reduce their debts while still staying in business. Even while in bankruptcy, a business can continue operating, including borrowing money, entering into contracts, and paying bills to creditors presently providing services.
Sometimes, however, debt overwhelms a business, and the best course is to shut down, and for the owners to move on to other, better, things. Chapter 7 bankruptcy protection is the appropriate way to do this. In a business Chapter 7 bankruptcy, the business shuts down and the bankruptcy trustee distributes what is left of the business’s assets to its creditors, relieving the owners of this obligation – and investing further time and money into a failing business. The company’s debts are then extinguished, and the creditors are notified that they are extinguished, eliminating the possibility of costly lawsuits by creditors (if owners personally guaranteed the debt, they would need to explore how to reduce or eliminate these personal debts; a business bankruptcy does not eliminate these personal obligations).
Our New Jersey bankruptcy attorneys have helped many businesses and people obtain relief through bankruptcy protection under both Chapter 7 and Chapter 11. Please e-mail or call us at (973) 890- 0004 to obtain assistance.