New Jersey Bankruptcy FAQ's

Bankruptcy is a process allowed by federal law to give relief to people who are in financial difficulty.

There are many indicators which could alert you that bankruptcy might be a good option, but the bottom line is that when your debts are becoming a problem in your life, bankruptcy is an option you should explore and consider.  For instance, if you are being sued, if your home is in foreclosure, if you are behind on your mortgage or car loan, if you credit card debt is becoming oppressive, if you are being sued, or if your car has been repossessed, these are some examples of when it might be time to think about think about bankruptcy.

Bankruptcy gives a person in financial distress relief from their creditors.  Depending on what bankruptcy “chapter” you file under, bankruptcy can eliminate your debts, reduce your debts, and/or extend the payment period for your debts.

• Chapter 7 Bankruptcy.  Chapter 7 gives a person a “fresh start.”  Chapter 7 is the most basic type of bankruptcy.  It is called "straight" bankruptcy or "liquidation." Generally speaking, all of the debtor’s debts are discharged in Chapter 7.
• Chapter 11.  Chapter 11 bankruptcy is a "reorganization."  It is most often used by businesses.  However, a few individuals can benefit from Chapter 11 if their debts are very large.
• Chapter 12.  Chapter 12 is used for bankruptcies by family farmers and fishermen.
• Chapter 13.  Chapter 13 is referred to as "debt adjustment." Like Chapter 11, it is essentially a “reorganization,” but it is aimed at individuals, not businesses.  In Chapter 13, people have to repay some or all of their debts from their current income under a “Chapter 13 Plan.”

Once you file your petition for bankruptcy protection, the New Jersey Bankruptcy Court will impose an “automatic stay,” which stops (or “stays”) all debt collection actions being pursued against you, including lawsuits, foreclosures and repossessions.

Yes.  As soon as you file for your bankruptcy petition with New Jersey’s Bankruptcy Court, the automatic stay will come into force and your creditors are required by law to stop harassing you.  In fact, they will be prohibited by law from doing anything to collect their debt except pursuing claims through New Jersey’s Bankruptcy Court.

The length of a bankruptcy varies from case to case, depending on what issues may arise.  Generally, however a Chapter 7 bankruptcy typically takes about four to six months before you get a discharge.  It typically takes four to six months for a Chapter 13 plan to be confirmed; the Chapter 13 plan can extend for up to five years.

You normally won’t need to go to “court.”  However, you will need to go to the U.S. Trustee’s Office for a “meeting of creditors.”

The meeting of creditors is held by the U.S. Trustee at the Trustee’s Office.  These are generally in private office buildings.  For instance, one of the offices is in the same Newark, New Jersey office building as Seton Hall Law School.  One of our bankruptcy attorneys will attend with you.  Normally the trustee will ask you a few questions about your  debts, your bankruptcy petition, and supporting documents.  Creditors can appear, but that is rare in personal bankruptcy cases.  Typically the creditors meeting lasts only a few minutes.  We will prepare you beforehand and go with you.

Call our New Jersey bankruptcy attorneys if you are in financial distress.  We call answer your questions about bankruptcy and other means of debt relief.  Call (973) 890-0004 or e-mail us.  Our offices are in Totowa, New Jersey, in Passaic County.  We are centrally located in Northern New Jersey with easy access to Routes 3, 23, 46, 80 and the Garden State Parkway, near Paterson, Little Falls, Clifton and Bloomfield.