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 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 West Milford, New Jersey will have distinct rules for exemptions, so you should speak with a local attorney before filing.

Chapter 7 Bankruptcy in West Milford, New Jersey

There are 2 typical types of consumer bankruptcies in West Milford, New Jersey: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 requires that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many types 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 excused. But some types 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 West Milford, New Jersey debts are not dischargeable, you might want to consider options other than bankruptcy.

Chapter 13 Bankruptcy in West Milford, New Jersey

In West Milford, New Jersey, chapter 13 is very different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 Bankruptcy involves a court setting up an adjusted 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 West Milford, New Jersey

The answer to this question depends heavily on your distinct situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.

Whatever your situation, you should speak with a local West Milford, New Jersey bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely results, which will help you make a more educated decision.