Representing New Jersey consumers facing chapter 7 bankruptcy
When an individual faces overwhelming debt and a bleak financial future, they may need a way to right their financial ship. Though a person may think that there is no recovery, bankruptcy is there to help. Chapter 7 bankruptcy is the simplest form known to most. It allows a person to walk away from unsecured debts by liquidating assets. Simply put, you could get a fresh start after selling your assets that are not exempt. Many people shy away from bankruptcy because of an unjust stigma and the fear that they would lose their home. Many people are able to keep their homes and other possessions. The reality is, bankruptcy is regularly used by responsible people who have found themselves drowning in debt that was unforeseen, including medical bills, divorce costs, and more. If you need an attorney to guide you through the process of filing Chapter 7 bankruptcy, contact Underwood & Micklin for a consultation.
Before you can start filing
Before you can file for bankruptcy, you will have to become eligible. You must receive credit counseling from a U.S. Trustee approved agency within the 6 months before filing. You will also have to take a debtor education course. Once completed, you must pass the means test.
The Means Test
To be eligible for Chapter 7, you will have to compare your income to the median income for a comparable household in your county. If your income is less than the median, you may be eligible. If your income surpasses the median, you may not be eligible for Chapter 7, though there are plenty of cases where it was allowed.
Starting the process of filing for Chapter 7 bankruptcy
After consulting with an attorney, you will file a Petition for Bankruptcy and the other forms, providing the following information:
- A list of all debts
- An account of your income
- A list of all assets, including real estate and personal possessions
- Your monthly living expenses
Once you successfully file for Chapter 7, an automatic stay will go into effect. This stops creditors from contacting you about debts that you owe. They cannot contact you or pursue the debt in any way, except if they acquire a court order.
Once you successfully file for bankruptcy and the automatic stay is put in place, your assets will be put into the hands of a court-appointed agent called a bankruptcy trustee. This person will make the important decisions. They will assign a value to your property and use your assets to pay as much of the debt as possible.
The Meeting of Creditors
The Meeting of Creditors, also called a 341(a) hearing, is where you and your attorney, the creditors that wish to attend, and the trustee will discuss the bankruptcy. They will discuss your financial situation and establish a clear picture of the matter for all involved, allowing creditors to collect information to support a rejection of the case. This is often your only visit to a courthouse.
The discharging of debts
If you are successful, most debts will be discharged. You can walk away with only the impact to your credit score. This is not the end of the road. With the right financial planning, you should be able to fully recover and even gain credit in the future. There are some debts that cannot be discharged, including student loans, child support, and most tax debts.
Contact a Cherry Hill, NJ bankruptcy attorney
If you believe that your financial situation calls for bankruptcy, it is important to discuss this matter with an effective and experienced attorney. Underwood & Micklin provides quality legal services to clients in New Jersey who need a helping hand through tough times. If you need to file for Chapter 7 bankruptcy, contact Underwood & Micklin for a consultation today.