East Brunswick, NJ Bankruptcy Lawyer

Millions of Americans are faced with filing for bankruptcy each year for various reasons. Sometimes it’s due to an unexpected illness. Other times it’s a divorce or a death in the family, the loss of a steady income or a critical accident. Bankruptcy is often thought of as an indication of failure, but that is far from the truth. Instead, bankruptcy allows people to start over and get on with their life without becoming destitute.

Our highly skilled bankruptcy attorneys and staff are devoted to providing clients with excellent legal services. With our combined and diverse legal expertise, the attorneys of Young, Marr, and Associates are ready to assist you with a large scope of bankruptcy-related issues. We will advise you on what type of bankruptcy to file, make sure your documents are filed promptly, and assist you in assuring all important facts are included in the paperwork. Before filing, our attorneys work side-by-side with clients to ensure bankruptcy is the best option.

For a free, no-obligation case review with our bankruptcy lawyers, call Young, Marr, Mallis & Associates at (609) 755-3115.

Important Terms for Bankruptcy Proceedings in East Brunswick, NJ

Bankruptcy law and proceedings use a number of odd terms that are not always used in everyday life. Accordingly, bankruptcy proceedings can become confusing for people who are not in the know. Below, our lawyers have compiled a guide to some of the common terms you may see in bankruptcy documents or hear in bankruptcy proceedings.

Creditor or Lender

The creditor is the party that is owed debt. Generally, the creditor is a bank, but it can be any entity that is owed money. Creditors do not start bankruptcy proceedings. Instead, they will petition the court for other ways to make sure that they get paid, such as wage garnishment.

Creditors can be further classified as “secured” or “unsecured.” Secured creditors have done something called “perfecting” their interest in what they are owed. Essentially, they have taken a series of complicated clerical steps to ensure that their right to collect debt from you is recorded. Unsecured creditors, on the other hand, do not have this benefit. They will have to fight for the scraps after the secured creditors have been paid, if there is even anything left.

When bankruptcy proceedings begin, the creditors are paid off from the assets sold in the proceedings. Once all of the eligible assets are sold, there is no more debt to the creditors. Even if the creditor has not fully been paid, there is no recourse, and the debtor gets a fresh start.

Debtor or Borrower

On the other side of the bankruptcy coin is the debtor – the party that owes debt to various creditors. The debtor is the party that files for bankruptcy. This will be you when our lawyers represent you in bankruptcy proceedings.

Assets

In short, your assets are your stuff that you own. This includes money, bank accounts, stocks, bonds, and physical things like houses, cars, and business inventory. Certain chapters of bankruptcy are tailored to people with different kinds of assets and different needs. Our bankruptcy lawyers can help find the best chapter for you to file for bankruptcy under in your situation.

Liquidation

The term “liquidation” refers to the turning of hard assets into cash. This stems from the fact that money is known as a “liquid asset” because it can be turned into anything, while something like a car cannot. Therefore, liquidation is the transformation of something into a liquid asset.

Many people fear losing their house, car, or other important possessions when filing for bankruptcy. However, those assets will not necessarily be liquidated. Assets that can be liquidated will include many things before it comes down to essentials like cars and houses. Moreover, certain chapters of bankruptcy allow for certain essential assets to be earmarked as exempt from liquidation.

Bankruptcy Estate

The bankruptcy estate consists of all of the assets that are able to be liquidated in bankruptcy proceedings. Under some chapters of bankruptcy, like Chapter 7, the bankruptcy estate will cover a wide range of assets, while other chapters like Chapter 11 or Chapter 13 will have some assets not part of the bankruptcy estate.

What is Bankruptcy?

Bankruptcy is a process supervised by the court in which people can discharge their debts in an orderly fashion and functionally “start over” in terms of credit and obligations to other parties. Bankruptcy exists not as a punishment but as a way to move forward for people with difficult debt issues.

When someone files for bankruptcy, something called an “automatic stay” is put in place. This puts an immediate halt on any debt collection efforts against you. They also can’t repossess your car or other assets or continue legal action against you. An automatic stay also stops any garnishment of your wages.

Once bankruptcy proceedings begin, the debtor’s assets are “liquidated,” or sold off, in order to pay debts. This process is different than what would normally happen without bankruptcy because it is much more organized and the debtors are in a less stressful situation. Once all of a debtor’s eligible assets are sold off, the debtor walks away free and clear of any debt they had before bankruptcy and starts over.

The bankruptcy process is used when an individual or institution is unable to repay debts owed to creditors. Sometimes bankruptcy is imposed by a court order or initiated by the debtor. The main purpose of filing for bankruptcy is debt restructuring, which allows the person to reduce, renegotiate, or eliminate delinquent debts.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy deals with property and is considered liquidation because the bankruptcy trustee may sell part of the property to pay back debt. Under state law, some of the property is considered exempt and can be kept by the debtor. The rest of the property may be taken by the court, converted to cash and then divided amongst creditors. The bankruptcy is then discharged and most creditors can no longer attempt to collect money, even if the original loan is not paid off.

There are some benefits and some downsides to Chapter 7 bankruptcy. The main benefit is that it is one of the quickest bankruptcy proceedings. This benefit comes from Chapter 7 bankruptcy’s major downside – it affords the least amount of protection for assets. Because few assets are protected, courts do not need to be picky about what is liquidated in Chapter 7 bankruptcy proceedings.

Because Chapter 7 disposes of assets quickly and, at least when compared to other chapters of bankruptcy, indiscriminately, it is most beneficial to individuals with few assets who want to get bankruptcy proceedings over with as soon as possible.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, on the other hand, is on the other end of the spectrum. It allows you to essentially “earmark” certain assets as off-limits from bankruptcy proceedings. When filing Chapter 13 bankruptcy, a debtor can work out a repayment plan that the court approves. This means that property does not have to be given up, but some or all creditors need to be paid back within three years. Sometimes the length of time is extended to five years if the judge sees fit.

Because Chapter 13 Bankruptcy does not try and end the proceeding with reckless abandon, it can take much longer than Chapter 7 bankruptcy. You need to be prepared to be dealing with bankruptcy for years under this chapter, and you should speak with our lawyers about that possibility.

Should I File for Bankruptcy in East Brunswick, NJ?

There are many benefits to filing for bankruptcy, but most importantly, it provides you with a fresh start. This is not just a figure of speech but a literal definition of the status of debtors after bankruptcy proceedings have wrapped up. For many people, bankruptcy offers a sense of relief. It prevents property from being repossessed, utilities from being shut off, and stops collection agencies from calling.

To be eligible for bankruptcy, a filer must have a permanent residence, own property, or have a place of business in the United States. The filer must also complete a financial counseling course (although some filers may be exempt). U.S. citizenship and insolvency are not prerequisites of a bankruptcy filing.

However, it is not a good idea to immediately jump to the conclusion that you should file for bankruptcy if you are in debt. Although filing for bankruptcy can have many benefits and is a useful solution for a lot of people, it is still a serious decision with some very real downsides. For example, your spending ability may be significantly curtailed while in bankruptcy. Certainly, you will be able to purchase essentials, but going on a fancy vacation is totally out of the question. Second, bankruptcy proceedings do temporarily impact your credit score in a negative way while they are underway, so that may affect your ability to take out loans, apply for credit cards, or do other things.

If you’re unclear whether you’re qualified to file for bankruptcy, you should consult with a bankruptcy attorney from Young, Marr, Mallis & Associates, who will provide you with legal advice on the most beneficial option for your financial circumstances.

What to Expect When I File for Bankruptcy in East Brunswick, NJ?

When you arrive at your scheduled appointment with one of our bankruptcy attorneys, you will be asked to fill out some paperwork to go along with other information you have provided. The attorney will then complete a bankruptcy petition and schedules. Most of the paperwork includes information about your assets, debts, income, and expenses.

Within a few weeks, you will receive notification of the date, time and location of your bankruptcy hearing. It’s imperative you attend the hearing or your case could be dismissed. If for some reason a conflict in scheduling occurs, it’s important to consult your attorney or the bankruptcy court clerk as soon as possible.

At the meeting, the court-appointed trustee will verify you are eligible for bankruptcy and that your paperwork is accurate and in order. You should arrive about fifteen minutes early, bring a state-issued photo I.D., your social security card, and the notice you received from the court. During the hearing, the trustee will call you forward and ask you a few basic questions such as whether you listed all of your debts and assets in the paperwork.

If you’re filing a Chapter 7 Bankruptcy, you’re finished unless the bankruptcy trustee requests additional information. If you’re filing under Chapter 13 bankruptcy, you will receive a discharge order after you have finished your court-arranged payment plan. It’s important to keep the discharge paperwork in a safe place as proof that you’ve been cleared of previous debts.

The choice to declare bankruptcy can be difficult, but the process is quick and the outcome is a fresh start with your finances, free of any debts you may have had beforehand.

Our East Brunswick, NJ Bankruptcy Lawyers Can Help

If you would like to set up an appointment with our bankruptcy attorneys at Young, Marr, Mallis & Associates, please contact us at the number (609) 755-3115.