Personal Bankruptcy: Chapter 7

In a Chapter 7 bankruptcy, the debtor is allowed to keep “exempt” property, and turns over “non-exempt” property to the trustee, who uses it to make some payment to creditors.   In many cases, virtually all of a person’s property is exempt, and the debtor can therefore keep everything.

It is often possible to keep your car and home, provided there are not large amounts of equity in them.  However, if there are loans secured by the property you keep (such as mortgages or auto loans), you must keep paying those loans despite the discharge, or the bank can seize the property.

First you meet with our attorneys to determine which type of bankruptcy will serve you best.  Then we will take your information and prepare a bankruptcy petition.  All information regarding your income and assets, debts and expenses must be documented (we will give you  a list of the documents and information you need to provide).  You cannot pick and chose which debts will be paid; you cannot give one creditor an advantage over another.  You will review the petition, and then we will file it with the court.  The petition asks the Court to discharge your debts.  You must also take a credit counseling course no more than 45 days after filing for bankruptcy protection.

Once the petition is filed, you creditors are no longer allowed to contact you.  All collections efforts, threatening phone calls, lawsuits and wage garnishments stop. About a month or two later, you will go to what is known as a “meeting of creditors.”  These meetings are very short.  Depending on where you live, New Jersey bankruptcy creditors meetings occur in either Newark, Trenton or Camden.  Then, usually between 3 and 6 months after you filed your petition, you will receive your discharge.

A Chapter 7 can’t get rid of all obligations.  These debts will continue.

•     Recent tax obligations.
•     Student loans.
•     Child support obligations.
•     Debts fraudulently incurred.
•     Damages for personal injury or death caused by drunk driving.
•     Debts not listed on your bankruptcy petition  (although the petition can be  amended to include debts you forgot).
•     Damages for assault.
•     Recently incurred luxury debts.

Most people in New York or New Jersey are eligible.  If your income is below the median income of your state, you are eligible.  If your income is above it, you will need to do a review of their expenses and income under the “Means Test.”  However, the income limits for New York and New Jersey are fairly high, so most people qualify to file Chapter 7.  Also, you cannot file within 4 years after receiving a Chapter 13 discharge, or 8 years after a Chapter 7 discharge.  In many cases you must wait 180 days to refile after a prior case was dismissed.

Our New Jersey bankruptcy lawyers are experienced and aggressive in helping people who are struggling with a wall of debt. We can help you get back on your feet, obtain a fresh start, and build a stable financial future.  Please call us at (973) 890-0004 or e-mail one of our experienced bankruptcy attorneys to obtain assistance.