Bankruptcy in New Jersey is a legal procedure through which some of the debts of an individual or a business are discharged (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult process. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good New Jersey bankruptcy attorney can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your distinct case.
Types of Bankruptcy in New Jersey
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in New Jersey will be the same as anywhere else in the United States. There are 2 basic types of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy normally used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
In New Jersey, Chapter 7 bankruptcy is referred to as "liquidation." The court will conduct an accounting of all of the debtor's assets, and determine which ones should be sold to help pay off the debts. Many classes of property, such as homes and cars, are exempt from this requirement, and therefore don't have to be sold. Once all of the eligible property is sold off, and the proceeds given to the creditors, the rest of the debt is discharged. Under Chapter 13 bankruptcy, debt is normally not discharged; instead, it is reorganized. The court will craft a long-term payment plan that allows the debtor to pay off his or her debts in single payments, over time. This usually gives the debtor some breathing room that would not exist if all of his or her debts became due and payable at once.
Chapter 11 bankruptcy is typically used by businesses, rather than individuals. Much like Chapter 13, it involves reorganization of debts. It compels the debtor to come up with a reorganization plan, but this plan has to be approved by a majority vote of participating creditors. Once it is approved, the company is obligated to carry it out.
How Can a New Jersey Bankruptcy Lawyer Help?
Filing for bankruptcy can be a life-changing decision. Depending on the circumstances, it can change your life for the better, or worse. A New Jersey bankruptcy attorney can help you figure out if bankruptcy is a viable option for your specific situation.
Interesting Facts About New Jersey
New Jersey is located in the northeastern quarter of the United States and has a population of well over 8 million people. It is the most densely populated of all the 50 states and is listed as the third wealthiest according to median household income.
New Jersey's legal system revolves around its three basic levels of courts- the Municipal Courts, Superior Courts, and the New Jersey Supreme Court. Unlike most states, New Jersey does not have an intermediate court district for appeals; instead, the Superior Court operates its own Appellate Division that processes appeals. There is also a Tax Court system with limited jurisdiction to settle tax disputes.
The judiciary of New Jersey is also unique in that it still has separate courts for law and equity. Also, the Superior Court system is further divided into divisions of Law and Chancery at the trial level. These features allow the state to process a variety of different claims in an efficient manner. New Jersey has also produced many major figures in U.S. jurisprudence, including U.S. Supreme Court Justices William Brennan, Jr., Antonin Scalia, and Samuel Alito.
Lawyers in New Jersey have experience in guiding clients through the state's court system. Most New Jersey lawyers begin by filing claims at the Superior Court level. Attorneys are available to provide legal advice and representation in New Jersey courts.