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Paterson, NJ Bankruptcy Lawyer

When you need help dealing with your financial issues, filing for bankruptcy can give you the relief you deserve in Paterson.

In order to prepare your bankruptcy petition, you must review your debt and compile a list of your creditors to gain a full understanding of your financial situation. You must also take a credit counseling course before filing for bankruptcy in New Jersey. Bankruptcy works differently, depending on the specific chapter debtors file. For example, Chapter 7 works through asset liquidation, while Chapter 13 works through repayment plans. Regardless of the bankruptcy chapter you file, you should receive an automatic stay on creditor collection efforts. After you pay off your secured debts, your unsecured debts can be discharged and you can be debt-free once more.

To have the Paterson, NJ bankruptcy lawyers of Young, Marr, Mallis & Associates assess your case for free, call us now at (609) 755-3115.

What to Do Before Filing a Bankruptcy Case in Paterson, NJ

Before you officially file your bankruptcy petition in Paterson, there are a few things you should do to prepare your case and make sure that bankruptcy is ultimately the right option for you.

Although bankruptcy offers various benefits to debtors in Paterson, mainly because it is a way to eliminate debt, there are some things to consider before filing. First, we will assess your total debt and your list of creditors. It will be important to organize this information prior to filing, as the court will request such details during your case. After assessing your debt, we can determine how much unsecured and secured debt you have. Unsecured debts are typically dischargeable in bankruptcy, meaning they are effectively erased and debtors are not obligated to repay them. Unsecured debts include credit card debt and medical debt, while secured debts include most mortgages and car loans.

Before you file for bankruptcy in Paterson, you will have to take a credit counseling course. This is required for all debtors in New Jersey. You must complete this course within 180 days of filing your bankruptcy petition. Credit counseling courses aim to provide debtors with tips and instruction that they can use when managing their finances in the future.

How Bankruptcy Chapters Work in Paterson, NJ

Bankruptcy is a tool used by debtors to address their debt without the added hassle of growing interest rates and aggressive creditors. Essentially, bankruptcy works by forcing everyone to the table. Creditors will negotiate with debtors, possibly for a lesser total debt or lower interest rate, and the court will be involved in your case.

The specifics of your individual bankruptcy case will depend on the chapter you file in Paterson. Chapter 7 bankruptcy is often reserved for debtors with lesser incomes. It works through asset liquation. Fortunately, our bankruptcy lawyers will help you cite federal or state liquidation exemptions in your bankruptcy petition, enabling you to exclude your home, car, or other assets or possessions from liquidation. Chapter 7 may work best for you if they majority of your debt is dischargeable.

Chapter 13 is typically for debtors with incomes that are higher than average. Instead of working through asset liquidation, Chapter 13 requires the use of a repayment plan. All debts will be consolidated under the same interest rate, and the debtor will repay debts according to a set payment schedule. Because of this, Chapter 13 cases often take longer than Chapter 7 bankruptcy cases in Paterson.

How Automatic Stays Work in Paterson, NJ Bankruptcy Cases

Generally speaking, an automatic stay will take effect any time a debtor files a bankruptcy petition in Paterson. This automatic stay prevents creditors from taking certain actions outside of the confines of the bankruptcy case.

These stays are automatic, meaning they kick in when bankruptcy cases are filed in Paterson. Some of the biggest issues debtors face when trying to get a handle on their debt are the constant calls or communications from creditors as they attempt to organize their finances. Automatic stays stop any attempts from creditors to collect on debts. This means that creditors cannot call you to request repayment outside of the appropriate setting and cannot engage in any other efforts to collect debt, such as sheriff’s sales or property repossession.

Sometimes, stays on debt collection efforts during bankruptcy cases are not automatic. For example, if a debtor filed for bankruptcy multiple times in the recent past, they might have to petition the court to get a stay in their case. Once in effect, a stay should last for the duration of a bankruptcy case in Paterson.

Benefits of Choosing Bankruptcy in Paterson, NJ

Bankruptcy does not need to feel like defeat. Filing for bankruptcy shows that you are committed to organizing and improving your finances and relationships with creditors. When you file for bankruptcy, you can start taking control of your financial situation by fully addressing your debt.

Furthermore, any unsecured debts eligible for discharge will be erased at the conclusion of a bankruptcy case. This means you may not need to pay any dischargeable unsecured debts to creditors. Instead, you can prioritize more important and pressing debts, like those related to your mortgage or car payments. If you do not file for bankruptcy and instead fall further into debt, you might face mortgage foreclosure, causing you to lose your home in Paterson.

Perhaps the biggest benefit of filing for bankruptcy is that it provides a path forward. Once your case ends, you should be free from all debt. You can then use the information you learned in your credit counseling course to start fresh and make intentional steps toward rebuilding your credit score and ensuring you do not fall into debt once more.