Bankruptcy is a court proceeding which lets a person or business have some or all of their debts absolved. It should normally only be considered as an option of last resort, because it can have significant long-term consequences, even if it can stave off financial disaster. This means that the costs and benefits need to be carefully considered before filing. Being a creation of federal law, bankruptcy will go through federal courts. Accordingly, the process for filing for bankruptcy in New Jersey is essentially the same as the process anywhere else in the United States. However, particular courts in Franklin Lakes, New Jersey will have particular rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Franklin Lakes, New Jersey
There are 2 common forms of consumer bankruptcies in Franklin Lakes, New Jersey: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves liquidation of part of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This normally includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once the non-exempt property is sold, the rest of the dischargeable debt is cleared. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Franklin Lakes, New Jersey is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Franklin Lakes, New Jersey
Chapter 13 Bankruptcy in Franklin Lakes, New Jersey differs substantially from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 Bankruptcy involves a court setting up a revised payment plan, which allows the debtor to pay off most or all of his debts over a prolonged period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Franklin Lakes, New Jersey
The answer to this question depends strongly on your particular situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
In any case, it would be a good idea to consult a local bankruptcy lawyer in Franklin Lakes, New Jersey. Your lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).