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Many people are enduring financial distress and even job loss during our current state of emergency. If you feel overwhelmed by debt, a Trenton bankruptcy lawyer could help. Bankruptcy attorneys understand the spiral that leads to feeling hopeless in the face of unmanageable obligations. Fortunately, declaring bankruptcy could provide relief right away. Let an experienced bankruptcy law firm help you regain a sense of control over your life.
If you live on a tight budget, one medical emergency or necessary car repair can push you beyond your financial limits. Especially in this time, you may need the immediate assistance of our compassionate, filing for bankruptcy attorneys.
There are two main types of bankruptcy proceedings. One allows for the complete discharge of all unsecured debt, and the other allows an individual to keep all assets and agree to a repayment plan. The first is a Chapter 7 filing. A Chapter 13 bankruptcy is considered a “reorganization” rather than a discharge of all debts.
After filing a Chapter 7 bankruptcy petition, two things happen right away. First, the law imposes an immediate automatic stay, which prevents creditors from continuing debt collection attempts and all other communication. Secondly, the court appoints a trustee. This person inventories all the debtor’s assets and beings the process of selling what they can to pay creditors. Often there are not enough assets to pay all creditors. Nevertheless, a final bankruptcy order relieves the debtor of all obligations.
When filing for bankruptcy, an attorney may recommend a Chapter 13 instead of Chapter 7 filing. In a Chapter 13 “reorganization,” the debtor gets to keep their assets. In return, they agree to a repayment plan, often for three to five years. The automatic stay on all creditor communications applies to Chapter 13 as well as Chapter 7 bankruptcy filings. This automatic stay is one of the most beneficial features of bankruptcy.
When declaring bankruptcy, an attorney could administer a government-mandated “means test” to see whether the debtor should file a Chapter 7 or 13 petition. Higher-income earners must file a Chapter 13, while those who meet the lower income threshold can file for Chapter 7 discharge. A bankruptcy law firm could also help inventory assets, attend creditor’s meetings, and receive the final release of debts from the court.
In a Chapter 7 filing, the trustee takes charge of most of the debtor’s assets, liquidating what is required to pay debts. There is some property that is exempt, however. The debtor can keep a vehicle, wedding rings, tools of a trade, some personal property inside a home, and a specific amount of equity if they own a house. Again, in Chapter 13 bankruptcy, there is generally no liquidation of assets, but a “reorganization” to repay debts. Usually, in a Chapter 13 filing, the debtor can keep their home.
A final Chapter 7 proceeding will discharge all unsecured debt, meaning debt that is not backed by collateral. For example, the court will wipe away all medical and credit card bills, unpaid rent and utility bills, unsecured personal loans, collection agency fees, and business debts. There are several kinds of debt that a court cannot discharge. These include child support, alimony, unpaid taxes, student loans, court fines, any debt owed to a government agency, and any debt secured by collateral like a car loan or home mortgage.
While declaring bankruptcy does not require a lawyer, it can be a complicated process. Attorneys with case experience handling declarations of bankruptcy could help you through the process, generally with more success than “pro se” filings without an attorney. When you connect with a Trenton bankruptcy lawyer, you could obtain the advice and direction you need. With a filing for bankruptcy law firm, you could rely on an attorney to file petitions and support you through the legal proceedings.