Bankruptcy is a court proceeding which lets a person or business have some or all of their debts discharged. It should usually 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 Woodcliff Lake, New Jersey will have individual rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Woodcliff Lake, New Jersey
There are 2 main types of consumer bankruptcies in Woodcliff Lake, 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 the non-exempt property is sold, the rest of the dischargeable debt is eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Woodcliff Lake, New Jersey is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Woodcliff Lake, New Jersey
Chapter 13 Bankruptcy in Woodcliff Lake, New Jersey is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each individual 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 agreements that gave rise to the debt in the first place. This results in a new 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 Woodcliff Lake, New Jersey
Chapter 13 is usually a good option for people who have a steady 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 steady income, Chapter 7 might be more beneficial.
Of course, you should always seek the counsel of an experienced local Woodcliff Lake, 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 particular situation.