Find a Bankruptcy Lawyer in Ridgewood, New Jersey
Bankruptcy in Ridgewood, New Jersey is a court proceeding through which a person or business who is unable to pay their debt is able to have some of their debt legally eliminated, or "discharged." This theoretically allows the debtor to move on with a clean slate. However, bankruptcy should not be treated as a way to avoid debt that one simply doesn't feel like paying. It is meant to be a safety net for people or businesses who are truly unable to pay off their debts. Because bankruptcy is not without negative consequences (such as a severely damaged credit rating for many years afterward), it should be viewed as an option of last resort.
Therefore, it is prudent to consult with an experienced Ridgewood, New Jersey bankruptcy attorney, who can advise you of the costs and benefits of bankruptcy. Because the decision to file for bankruptcy depends very heavily on the facts of each individual case, the advice of a Ridgewood bankruptcy attorney cannot be substituted.
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Types of Bankruptcy in Ridgewood, New Jersey
In Ridgewood, New Jersey, 3 types of bankruptcy procedures are in common use: Chapter 7, Chapter 11, and Chapter 13. Being governed by federal law, the procedures involved in filing for bankruptcy in Ridgewood, New Jersey wil be about the same as anywhere else in America. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her assets in order to pay off as much debt as possible. Once the sale of the assets is complete, and the proceeds handed over to the creditors, the debt is viewed as discharged. Liquidation is basically selling assets to the highest bidder. Not all of the debtor's assets will need to be sold, and many types of property are totally or partially exempt, including homes, cars, retirement accounts, and insurance policies. This means that the debtor can keep them. It should be noted that some types of debts are not dischargeable in Chapter 7 bankruptcy, including student loans, criminal fines, taxes, and child support payments. Even when the bankruptcy process is complete, these debts will have to be paid in full.
Under Chapter 13 bankruptcy in Ridgewood, most of the debtor's debt is not discharged. Instead, the bankruptcy court, working with the debtor and participating creditors, work out a payment plan that allows the debtor to pay off most of his or her debts over a longer period of time, thereby theoretically making the debt far more manageable. Once a payment plan is approved by the court, creditors are prohibited from attempting to collect payment under their original agreements that gave rise to the debt in the first place. Though Chapter 11 bankruptcy can be used by individuals, it is almost exclusively used by businesses. Similar to Chapter 13, Chapter 11 involves restructuring of debts, rather than complete discharge. The debtor is required to come up with a restructuring plan that lays out how it plans to cut costs, streamline operations, and pay its debts. The plan must then be approved by a vote of participating creditors.
One advantage of Chapter 11 bankrutpcy is that it allows a business going through it to continue operations, and to trade its stock.
How Can a Ridgewood Bankruptcy Lawyer Help?
The need to weigh all the options and consider the costs and benefits of filing for bankruptcy in Ridgewood cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Ridgewood bankruptcy attorney beforehand.
