If you’ve gone through a divorce or suffered a serious medical setback, and you’re struggling to meet your financial obligations, you may be considering bankruptcy as a way to get a fresh financial start. When you file for Chapter 7, Chapter 11 or Chapter 13 bankruptcy, you’ll immediately have the protection of the automatic stay, which prevents creditors from harassing you with phone calls, letters or legal action. But a bankruptcy filing won’t stop all creditors and can’t rid you of all debts.
What Bankruptcy Can Do for You
More than anything, a bankruptcy filing can allow you to catch your breath. With the benefit of the automatic stay, you won’t have to worry every time the phone rings or the mailman comes by. A bankruptcy will temporarily stop most wage garnishments, lawsuits and collection attempts, but not all—family law obligations and criminal restitutions are typically not covered by a bankruptcy filing.
A bankruptcy filing can also help you:
- Temporarily stop eviction, foreclosure and repossession proceedings
- Discharge unsecured debts, including credit card and medical bills
- Eliminate any debt on secured property, but you’ll have to return the property
- Set up new payment arrangements with creditors (in a Chapter 13)
What Bankruptcy Won’t Do for You
Because bankruptcy only applies to the debt, it doesn’t extinguish any lien against you. For example, if there’s a lien on your house (your mortgage), you may use bankruptcy to eliminate the debt, but the lien holder (lending institution) still can enforce the lien and take the property.
A Chapter 7 bankruptcy cannot typically be used to discharge certain types of debts, such as student loans, child support and alimony payments, and most tax arrearages.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we provide comprehensive bankruptcy counsel to individuals throughout the state of New Jersey. Contact our office online or call us at 856-424-6400. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
