If meeting your financial obligations is a challenge, bankruptcy can be a viable option if all other alternatives are insufficient. Declaring bankruptcy can help you get out of debt and position yourself to make a fresh start.

This is not a step to be taken lightly and you should discuss your situation with the experienced bankruptcy team at Gillman, Bruton & Capone before making a final decision. Our bankruptcy lawyer serving the Cranford area can explain the forms of bankruptcy that might work for your situation and help you implement your plan.

How Bankruptcy Works

There are several forms of bankruptcy – called Chapters – available to serve people and businesses in different circumstances. Deciding whether bankruptcy is the best option in your situation requires a frank discussion with a bankruptcy lawyer. We will assess your specific circumstances, listen to your goals, and provide advice regarding the best course to meet them.

All chapters of bankruptcy provide relief from debt and creditors must cease collection efforts when a debtor files in Cranford. In most cases, the debtor must try to repay as much of the debt as possible but bankruptcy protection allows you to retain most or all your assets. A Chapter 11 bankruptcy allows a business the time to begin operating profitably again, while a Chapter 7 business bankruptcy assumes operations will cease.

When the bankruptcy process is complete, any remaining debt is discharged, and the debtor can resume their life or business with a clean slate. Some debts, however, cannot be discharged even through bankruptcy. A debtor who owes child support, alimony, taxes, certain legal fees, and student loans must continue to pay them even if they declare bankruptcy.

Bankruptcy for Individuals and Married Couples

Individuals and married couples can file for bankruptcy under a Chapter 7 or Chapter 13. Businesses operating as sole proprietorships could also file for a Chapter 13 bankruptcy.

When you have an income that puts you above the poverty threshold, filing under Chapter 13 can ensure you keep your home and other important assets. A Chapter 13 bankruptcy requires you to reorganize your debts and make monthly installment payments for three to five years, depending on your income and the assets you own. The debt limit for individuals filing a Chapter 13 changes regularly, so it is important to check with a bankruptcy attorney to ensure you qualify.

If you do not pass the income-based means test, a Chapter 7 bankruptcy could be an alternative. Whether you are filing as an individual or a married couple, you must prove your income is below the federal poverty line for a family of your size in the state. If you qualify for Chapter 7, we can often manage a filing that preserves your home (dependent on the amount of equity in the property), vehicle, and other important assets if you make your payments on time.

Bankruptcy for Businesses and Individuals with Significant Debt or Business Debt

A Chapter 11 bankruptcy is the form often used by businesses to restructure their debt obligations while keeping their enterprise running. The process can be complex, but it offers businesses the opportunity to stay open until they can be profitable again. Individuals or married couples with too much income to qualify for a Chapter 7 or too much debt to qualify for a Chapter 13 can use a Chapter 11 bankruptcy to reorganize their obligations.

A Chapter 11 plan of reorganization typically requires significant negotiation with creditors. Chapter 11 bankruptcy can be costly to establish, but it allows debtors more control over the reorganization plan than other forms of bankruptcy.

The Small Business Reorganization Act (SBRA), which became effective on February 19, 2020, also created a new Subchapter V of Chapter 11 bankruptcy, exclusively for small businesses or their owners. While complicated, Subchapter V bankruptcy cases are often a tremendously valuable tool to restructure small business debt and allow companies to emerge.

Business owners and partnerships could also consider a Chapter 7 bankruptcy, which shuts down the business and liquidates its assets to settle outstanding debts.

Explore Bankruptcy Options in Cranford With an Attorney Today

Unmanageable debt can create intense stress and force you to defend against possible home foreclosure. Excessive business debt can stifle creativity and innovation, and limit your business’s opportunities for growth.

Bankruptcy can solve many financial problems and eventually leave you free to move forward without debt. Contact our bankruptcy lawyer to discuss whether bankruptcy in Cranford might be the right solution for your family or business. We understand you are concerned about your future – and we want to help you get your financial situation back on track.