If you are overwhelmed with debt, you are probably looking for a way out. Many businesses offer debt consolidation, credit repair, and similar services but do not deliver on their promises. Consult a local bankruptcy attorney about the available alternatives before taking any action.

Declaring bankruptcy could give you a fresh start. Upon completion, a Chapter 7 bankruptcy wipes out your debt and allows you to begin building back your creditworthiness almost immediately. An Edison Chapter 7 bankruptcy lawyer can assess your situation, explain your options, and help you determine the best course of action.

Chapter 7 Bankruptcy Basics

Chapter 7 bankruptcy is available to individuals and married couples who pass a means test. Chapter 7 is called liquidation bankruptcy because a Trustee might have to sell some assets to satisfy your creditors. Fortunately, most people can keep nearly all their assets when they work closely with an attorney.

Debtors filing for Chapter 7 bankruptcy protection must compile a comprehensive list of these assets and debts. They may not prioritize one debt over another. A Chapter 7 bankruptcy attorney from our Edison office can help you gather the necessary information to complete your filing.

When you file your petition for Chapter 7 bankruptcy protection, your creditors must immediately cease any and all collection efforts. The Trustee will pay the creditors with any funds available from liquidated or non-exempt assets. Within a short time, usually not more than six months after filing, the Bankruptcy Court discharges the debtor’s remaining debt.

Exemptions to Protect Property

Federal and state law allows debtors filing for Chapter 7 bankruptcy to retain some, if not all, of their property. New Jersey and the federal government have different rules regarding property exempt from liquidation under Chapter 7. A debtor must choose to use either the federal or state exemption. The exemptions apply to each person, so a married couple filing Chapter 7 could each take the full exemption.

Using exemptions wisely can often allow debtors to keep their home, vehicles, and personal property. However, sometimes they must reaffirm their debt to keep a home or vehicle. Reaffirming means you agree to keep making the mortgage or car payment, and the creditor agrees not to foreclose a home or repossess a car as long as you do so.

Individuals or couples who own a sole proprietorship or are sole owners of an S-Corporation should be cautious. In such cases, the business and its assets are indistinguishable from the owners’ assets, and a Trustee could liquidate them to satisfy creditors. An Edison Chapter 7 bankruptcy attorney could advise you on whether your business and its assets are at risk of liquidation. If so, and if you intend to keep the business running, Chapter 13 bankruptcy might be what you are looking for.

Some Debts Are Not Dischargeable

If you are considering filing for Chapter 7 bankruptcy protection, it is crucial to understand that it does not relieve you of the burden of every debt. According to 11 United States Code § 523, some debts are not dischargeable through bankruptcy.

For example, federally guaranteed student loans usually cannot be discharged through bankruptcy. You cannot eliminate arrears in alimony and child support through bankruptcy. However, in some cases, bankruptcy could be used as a reason to justify modifying an alimony or child support order.

Contact an Edison Chapter 7 Bankruptcy Attorney if You Need Debt Relief

Chapter 7 bankruptcy offers some advantages over other forms of bankruptcy but it has its limitations. Before you make any decisions about how to get out from under overwhelming debt, speak with an experienced professional from Gillman, Bruton & Capone.

An Edison Chapter 7 bankruptcy lawyer will explain all aspects of this decision and how you can retain most or all your assets in the process. Talk with our team and schedule a time for a free case evaluation.