Bankruptcy is a big step and should not be taken lightly. At Gillman, Bruton & Capone, we work with you to come up with the best solution – bankruptcy or otherwise. However, if your debt has become unmanageable, bankruptcy represents a path to a fresh start.
A Freehold bankruptcy lawyer will become familiar with your circumstances and help you find the best way to discharge your debt. When it comes to bankruptcy, the earlier you act, the better. Contact our team of attorneys to begin discussing your options.
If your total debt is less than $2,750,000, then filing for Chapter 13 bankruptcy allows you to develop a plan of reorganization that fits your budget. You will make monthly payments to a bankruptcy trustee who distributes the funds to creditors.
You must repay your “priority” creditors in full over three to five years—the priority debts include arrears in child support and spousal support, and recent tax liabilities. If you wish to keep assets like a home or car that secures a debt, you must bring payments current during the repayment period and continue to pay the mortgage or car note after emerging from bankruptcy.
Creditors with unsecured debt will share the remainder of the monthly payments and do not need to be paid in full. If you make your payments as agreed to under the Chapter 13 restructuring plan, the bankruptcy court may discharge any unsecured debt that remains. This plan can also be used to avoid a home foreclosure.
If your indebtedness exceeds $2,750,000, you do not qualify for Chapter 13 and must file Chapter 11 bankruptcy. Even if you qualify for Chapter 13, filing Chapter 11 might be advantageous in specific circumstances because it allows you to repay mortgage arrears over a longer period than Chapter 13, which has a limit of five years. If you received a Chapter 7 bankruptcy discharge within four years, or a Chapter 13 bankruptcy discharge within two years, you cannot file Chapter 13 and must file Chapter 11.
Chapter 11 bankruptcy is more expensive than Chapter 13 and is only an advantageous option for certain individuals and couples. A Freehold bankruptcy lawyer could explain which chapter will work best in your specific situation.
If you have a low to mid-range income or very high living expenses, Chapter 7 bankruptcy could offer a quick way out of debt. It is a common belief that Chapter 7 requires you to give up most of your assets but our Freehold bankruptcy lawyer can often help avoid this.
Only some debtors qualify for Chapter 7. The law requires a means test to determine whether you can afford to repay some debt and meet your basic living expenses. If so, you cannot file Chapter 7 and must enter a plan of reorganization under Chapter 13 or 11. If you have little or no disposable income, Chapter 7 is an option.
Under Chapter 7 bankruptcy, a trustee liquidates your non-exempt assets and pays the proceeds to your creditors. By working with a lawyer, it is often possible to retain most of your assets, including certain larger assets like a car or a house.
After 60 days, the court discharges any remaining debt, except for that which is not dischargeable – student loans, child and spousal support arrears, recent tax liabilities, and several others.
If your current financial circumstance leaves you feeling overwhelmed, it might be time to consider bankruptcy. There may be other options, so speaking to a Freehold bankruptcy lawyer could provide you with some clarity about your next steps. Our experienced advocates have been practicing for more than 25 years. Call our team now and we can provide a free case evaluation.