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 Toms River, New Jersey will have particular rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Toms River, New Jersey
There are 2 common forms of consumer bankruptcies in Toms River, New Jersey: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 states that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many forms of property are exempt, and do not need to be liquidated, such as cars, homes, insurance policies, and retirement accounts.
Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is absolved. But some forms of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Toms River, New Jersey debts are not dischargeable, you may want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Toms River, New Jersey
Chapter 13 Bankruptcy in Toms River, New Jersey is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each particular case. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the contracts that gave rise to the debt in the first place. This results in an altered payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
Which Type of Consumer Bankruptcy Should I File in Toms River, New Jersey
Chapter 13 is normally a good option for people who have a stable income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a stable income, Chapter 7 might be more beneficial.
Of course, you should always seek the counsel of an accomplished local Toms River, New Jersey bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your individual situation.