The Things You Want to Know When Considering Bankruptcy
You’re struggling pay your bills because you’ve lost your job or your hours have been cut back to nothing. You can’t see anyway things are going to improve in the near future, so you’ve given some thought to filing for personal bankruptcy protection. Here are some of the most important things you’ll want to know before you file.
The Difference between Chapter 7 and Chapter 13
When seeking personal bankruptcy protection, you’ll generally have two options:
- With Chapter 7, you can permanently rid yourself of the obligation to pay your debts, but you must relinquish some of your assets in exchange for that right. You must also qualify for Chapter 7 by demonstrating to the bankruptcy court that you lack the resources to repay your creditors.
- If you don’t meet the eligibility requirements for Chapter 7, or you want to keep all your property, you’ll want to file under Chapter 13, which allows you to restructure your debts, so that you can pay them off over three to five years.
You Won’t Be Able to Discharge Certain Debts
In a Chapter 7 filing, you cannot rid yourself of the obligation to pay certain family law arrearages, such as child support. Furthermore, discharging student loans and most tax delinquencies is extremely difficult.
You Can Keep Some of Your Property
You can claim certain assets as exempt from seizure by the bankruptcy court. Exemptions are available under state or federal law. You must, however, choose one or the other. You cannot claim some exemptions under state law and some under federal law.
A Bankruptcy Will Stay on Your Credit Report for a Lengthy Period of Time
A Chapter 13 filing will be reported for seven years and a Chapter 7 will be on your credit report for 10 years. That won’t necessarily preclude you from securing credit in the future, though. In fact, some creditors will see your bankruptcy petition as evidence that you’re working to get your finances under control. They will often look at what you’ve done over the last few years, particularly if your bankruptcy was filed some time ago.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we provide personal bankruptcy counsel to men and women throughout the state of New Jersey. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
Named a New Jersey SuperLawyer Every Year since 2008, Including 2022