About Bankruptcy and How It Works
Experienced South Jersey Bankruptcy Lawyers Protect Your Assets and Provide Debt Management Advice in Camden County, Burlington County and Beyond
Possibly the biggest reason people delay when it comes to declaring bankruptcy is because they are afraid of the social stigma attached to it. Many are also unsure and nervous about how the entire process works. When you work with an experienced bankruptcy attorney, the process is manageable and helps you get back on your feet. Learn more about bankruptcy in New Jersey and Pennsylvania before automatically discounting it as an option.
You may be surprised to learn how many other people are in your shoes, lying awake at night feeling overwhelmed by their debt. At McDowell Posternock Apell & Detrick, PC our experienced and compassionate attorneys understand your concerns. We know how easy it is for people to get into debt over their heads. It’s our job to help you get back on the road to financial health and make a fresh start.
You will undoubtedly have many questions about how bankruptcy works and how it will impact your future. For detailed information about bankruptcy in NJ & PA, look into the following topics:
- Bankruptcy Causes
- Filing for Bankruptcy
- Information and Bankruptcy FAQs
- Business Bankruptcy and Alternatives
And for a quick overview of the various bankruptcy options that are available for those in debt, read below:
What Is Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is known as a liquidation proceeding. But, this does not mean that you are necessarily required to liquidate, or lose, your assets. An experienced bankruptcy attorney can assist you in understanding how Chapter 7 works. Generally, you can hold onto your house car and other assets in Chapter 7 because they are considered “exempt”, or protected, assets.
When you file for Chapter 7 bankruptcy protection, you will have a court-appointed bankruptcy trustee review your non-exempt assets. The trustee’s job is to sell your non-exempt assets to pay your creditors. If there are no non-exempt assets, unsecured debts (such as credit card debt) are typically “discharged.” This means they will be wiped off the books and you will no longer owe that money.
In the majority of Chapter 7 cases, our clients’ bankruptcy trustees do not end up selling any property because the Bankruptcy Code allows Chapter 7 debtors to “exempt” most personal property from sale. For example, your equity in a home owned by you and used as your personal residence is exempt up to $20,250 (per spouse). Equity in an automobile is exempt up to $3,125. If your equity in your home or car does not exceed the amount of your exemption, and if you are able to keep your any payments current, you may be able to maintain those assets without fear of losing them to the trustee or your creditors.
What Is Chapter 13 Bankruptcy?
Chapter 13 is known as reorganization bankruptcy because the filer agrees to a repayment plan to pay off part of the debt due to the creditors. Frequently borrowers also make up past-due mortgage or auto loan payments. Repayment plans are typically three to five years long to allow a person to make-up missed payments on a house or car, and pay off debt using future income. In other words, a person filing for Chapter 13 bankruptcy enters into a long-term agreement to clear up a portion of their debt. If they stick to the plan, all remaining dischargeable debt will be erased at the end of the plan period. Chapter 13 bankruptcy is a way to prevent foreclosure and keep valuable, nonexempt property.
What is Chapter 11 Bankruptcy?
Chapter 11 is usually used by businesses that need to restructure their debt. Chapter 11 bankruptcy is more expensive than the other types of bankruptcy, but it has the advantage of allowing for a great deal of flexibility and creativity in financial problem-solving.
McDowell Posternock Apell & Detrick, PC has also assisted high net worth individuals to protect their assets by filing Chapter 11 bankruptcies. Whether Chapter 13 or Chapter 11 is the best options depends on the complexity of the person’s financial issues and the amount of assets and debts they have. Our experienced bankruptcy attorneys can help you weigh the best options for your situation.
Schedule a Free Consultation with Experienced New Jersey & Pennsylvania Bankruptcy Attorneys Today
If debts are causing you undue stress, the qualified bankruptcy attorneys at McDowell Posternock Apell & Detrick, PC can help you. Contact us today to discuss whether bankruptcy is the right option for you.