When you are deep in debt and considering bankruptcy, it can seem almost like the end of the world. With your finances underwater, with more debt than you can reasonably handle, declaring bankruptcy can feel like giving up, and you might not know how to climb back up. Fortunately, however, bankruptcy can be the first step to recovering your financial future, provided you are prudent about how you handle yourself.
However, if bankruptcy is an appropriate step for you, what you need to do to recover depends on what type of bankruptcy you declare. There are two primary forms of bankruptcy that an individual can apply for: Chapter 7 and Chapter 13. A Chapter 7 bankruptcy is what most people think of when they think of a bankruptcy: a federal court will appoint a trustee to oversee the sale of any assets you have that are not legally exempt from bankruptcy, and the proceeds of those sales will be used to satisfy your outstanding debts. A Chapter 13 bankruptcy, on the other hand, involves negotiating a three-to-five-year repayment plan with the bankruptcy court, where your debts must be partly or completely paid off over time. However, unlike in a Chapter 7 bankruptcy, you will still be able to keep your non-exempt property, provided you follow the repayment plan.
The downside to Chapter 7 bankruptcy is that you may lose at least some of your property, for example if you own more than one home, if there is substantial equity in your home or vehicle, if you own particularly valuable personalty, or if you have bank account balances larger than $11,500. Additionally, the bankruptcy will appear on your credit reports for seven to ten years. However, once you have completed the bankruptcy process, whether Chapter 7 or 13, your debts (with certain exceptions, like student loans, taxes, alimony or child support) will be discharged, meaning you no longer need to pay them back. In effect, you can have the opportunity to start over, and rebuild your finances without the burden of massive debt weighing you down.
If you are experiencing financial distress, contact an experienced New Jersey bankruptcy attorney to discuss your options. The Law Offices of Hunziker, Jones & Sweeney are experienced in helping families and individuals deal with the devastating effects of financial distress and in mapping out potential strategies, including the possibility of filing for bankruptcy, to help them cope and to see the light at the end of the tunnel. The attorneys at the firm understand that financial distress is an extremely emotional and difficult time for anyone to go through. If you are experiencing severe financial distress and may be considering bankruptcy as an option or want to learn more about what a bankruptcy filing may do to help you, call The Law Offices of Hunziker, Jones & Sweeney at (973) 256-0456 or fill out our contact form for a consultation.