Bankruptcy is a court proceeding which lets a person or business have some or all of their debts excused. It should typically 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 Paulsboro, New Jersey will have distinct rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Paulsboro, New Jersey
There are 2 typical forms of consumer bankruptcies in Paulsboro, New Jersey: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 liquidates part of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many forms of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and necessary personal items, like clothing. These assets are not available to creditors.
Once the appropriate property is sold, and the funds transferred to the creditors, the dischargeable debt is absolved. Some forms of debt, however, can't be excused in Chapter 7 Bankruptcy in Paulsboro, New Jersey. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be excused, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Paulsboro, New Jersey
Chapter 13 bankruptcy in Paulsboro, New Jersey is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 Bankruptcy involves a court setting up an altered payment plan, which allows the debtor to pay off most or all of his debts over an extended 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 Paulsboro, New Jersey
This depends entirely on the facts of your specific case. If you have a decent amount of stable income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 may be the best option for you. If most of your property is exempt, and you don't have much stable income, Chapter 7 might be the best option.
Regardless of your situation, you should speak with an attorney in Paulsboro, New Jersey who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.