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 serious 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 product of federal law, bankruptcy will go through federal courts. Accordingly, the procedure for filing for bankruptcy in New Jersey is basically the same as the procedure anywhere else in the United States. However, individual courts in Hillsdale, New Jersey will have particular rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Hillsdale, New Jersey
There are 2 common types of consumer bankruptcies in Hillsdale, New Jersey: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves liquidation of some 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 qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some types of debt, however, can't be absolved in Chapter 7 Bankruptcy in Hillsdale, New Jersey. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Hillsdale, New Jersey
Chapter 13 Bankruptcy in Hillsdale, New Jersey is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each particular case. Chapter 13 bankruptcy does not excuse debt, it restructures it. This involves a court coming up with an altered repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original contracts that created the debt in the first place. This creates a new payment structure, normally involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Hillsdale, New Jersey
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your particular situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
Regardless of your situation, you should speak with an attorney in Hillsdale, New Jersey who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely outcomes of each one, allowing you to make a much more informed decision.