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Questions and Answers

What Kinds of Bankruptcy are there?

There are a number of different kinds of Bankruptcy. Most individuals file either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy.

What is the difference between a Chapter 7 and a Chapter 13 Bankruptcy?

Generally a chapter 7 Bankruptcy is used to wipe out ("discharge") as many debts as possible and to give you a fresh start. A Chapter 13 Bankruptcy is used if you are behind on payments on a secured debt (for example your home mortgage) and you want a chance to catch up with the overdue payments or if you have too many possessions to file a Chapter 7 Bankruptcy. We will go over your options with you in a free office consultation.

Will I Lose My Possessions if I file Bankruptcy?

The Bankruptcy laws included "exemption" rules which permit you to keep a certain amount of property - including your personal property - even if you are wiping out your debt. There are limits to the amount of property you can keep, but most individuals keep all of their possessions.

Can Bankruptcy stop a wage garnishment?

Once you have filed a Bankruptcy, all lawsuits are automatically stopped and all garnishments must immediately cease. Our office will make sure that your garnishment is stopped promptly.

Will my employer be notified that I have filed a Bankruptcy?

Unless you owe your employer money or there is a garnishment in effect, there is no need to notify your employer that you have filed Bankruptcy.

Do I have to go to court?

In both Chapter 7 Bankruptcy and Chapter 13 Bankruptcy you need to attend a "meeting of creditors" conducted by the Bankruptcy Trustee. This meeting is like a court hearing except that there is no judge present. Instead, the Bankruptcy Trustee conducts a short meeting in Trenton, Camden or Newark depending on where you live. Your attorney will accompany you, and the Trustee will ask you a few questions about your Bankruptcy petition. Typically, the meeting of creditors is about one month after you file your Bankruptcy.

Will I lose my home if I file Bankruptcy?

In a Chapter 7 Bankruptcy a couple can keep their home if the mortgage is current and their equity in the home is $32,300 or less. A couple with more equity or who are behind on their mortgage can still keep their home by filing a Chapter 13. A Chapter 13 Bankruptcy permits you to keep your home and pay back you overdue mortgage payments which are paid over a period of time though the Bankruptcy Trustee. You must also continue to make your regular mortgage payments to your mortgage company. In many cases, other debts, such as credit cards and medical bills, can be wiped out while you pay back your past due mortgage payments. After your plan is completed, you simply keep paying your regular monthly payment to your mortgage company. We will design a Chapter 13 plain tailored to your situation and calculate your approximate monthly payments needed in a Chapter 13 plan so that you can keep your home.

What can I do if my home is in foreclosure?

Once you file a Chapter 13 Bankruptcy, any Foreclosure proceeding against your home is automatically stopped and remains stopped as long as you remain current on your payments to the trustee and your regular monthly mortgage payments. Once you make all the payments required under your plan, your home will no longer be in foreclosure.

Will I lose my Car if I file Bankruptcy?

If you are current on your car payments, your automobile finance company cannot repossess your car, even if you are in bankruptcy and even if you are wiping out other debts. Like other possessions, you car can be covered by one of the bankruptcy "exemption" rules. If you are behind on your car payments you can pay those overdue payments back through a Chapter 13 plan.

Are there some debts which I cannot get out of by filing Bankruptcy?

There are some kinds of debts which cannot be discharged in Bankruptcy. These include child support and alimony. In addition, there are special rules for discharging other kinds of debts such as student loans, income taxes and motor vehicle surcharges. While it is possible to discharge some of these debts, each case is different. If you have these kinds of debts we will go over them with you and determine which ones can be discharged.

How long is Bankruptcy on my Credit record?

Bankruptcy stays on your credit record for a period of 10 years. That doesn't mean you cannot get credit for 10 years. Usually, you can rebuild your credit starting approximately one year after your bankruptcy. Some mortgage companies and automobile financing companies will actually lend you the money to buy a house or a car immediately after your Bankruptcy. Your success at rebuilding your credit depends on a number of things including your income at the time you apply for new credit and the type of credit you apply for.

How do I know if Bankruptcy is for me?

We will be gladly meet with you at no charge to go over your situation and to advise you if Bankruptcy can be used to deal with your fina

Federal Exemptions