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East Orange, NJ Bankruptcy Attorney

If you are having difficulty managing your finances and have fallen into debt as a result, consider filing for bankruptcy in East Orange.

Filing for bankruptcy may be wise if you are at risk of losing your home to foreclosure, cannot catch up on bill payments, or have a considerable amount of unsecured debt in East Orange. As a consumer, the two bankruptcy chapters available to you will be Chapter 7 and Chapter 13. Which chapter you file will depend on your income and how it compares to statewide averages. Before filing for bankruptcy, you will have to take a credit counseling course. Our lawyers will then review your debt and financial situation so that we can help you file a bankruptcy petition with the court. After your petition is submitted, negotiations with creditors may follow. At the end of your case, you will receive a discharge of eligible unsecured debt. Once your bankruptcy case is complete, you can focus on rebuilding your credit.

To schedule a confidential and free assessment of your case, call the East Orange, NJ bankruptcy attorneys of Young, Marr, Mallis & Associates at (609) 755-3115

Reasons to File for Bankruptcy in East Orange, NJ

While there are many reasons why individuals in East Orange might decide to enter into bankruptcy, there are a few that tend to lead the list. Being at risk of losing your home due to foreclosure, being unable to catch up on bills or catch your breath, and having lots of unsecured debt might mean that bankruptcy is a good option for you.

You Are About to Lose Your Home or Vehicle

Mortgage foreclosure is a very real thing that many homeowners are closer to than they might realize. In New Jersey, homeowners need only be delinquent on their mortgages for a few short months before lenders can initiate foreclosure proceedings. When lenders get to the point where they file mortgage foreclosure petitions with the court, they might be less willing to negotiate a new agreement with homeowners. The result? A real possibility of losing one’s home. Fortunately, bankruptcy can stop this process in its tracks.

Because of the automatic stay that takes effect when you file for bankruptcy, mortgage foreclosure proceedings that are in already in progress will halt. This will give you the opportunity to either cure your mortgage or repay your lender throughout the duration of your bankruptcy case. If you are at risk of losing your vehicle to repossession, bankruptcy can have a similar effect. Even if mortgage foreclosure has progressed all the way to a sheriff’s sale, filing for bankruptcy can stop it.

You Cannot Catch Up on Bills

For many people, debt becomes a game, a balancing act, of trying to manage and mitigate until the damage is too far gone. If you have tried to deal with your debt by yourself, only to watch it grow and grow, bankruptcy might be right for you. When you petition for bankruptcy, the court will consider your income, dependents, and various expenses before deciding how you will repay creditors. This can ensure that your debt does not continue to grow during bankruptcy and that you can focus on repaying what you currently owe.

You Have Unsecured Debt

One of the biggest perks of bankruptcy for debtors in East Orange is the erasure of unsecured debt. This will include things like your medical bills or credit card bills. Once you satisfy the requirements of your case, those unsecured debts will be eliminated through a bankruptcy discharge. This means you will have no obligation to repay certain debts to creditors, making total repayment easier and more achievable.

Bankruptcy Chapters for Consumers in East Orange, NJ

The two main bankruptcy chapters for consumers in East Orange are Chapter 7 and Chapter 13. Which chapter you file for will be determined by the means test.

The means test involves comparing your income to the median statewide income for households of a similar size. If your income is below the median, you will file Chapter 7 bankruptcy. If your income is above the median, you will file Chapter 13.

Chapter 7 is also known as liquidation bankruptcy. This means that some of your assets might be liquidated in order to repay creditors. Chapter 13 requires the use of repayment plans. Our bankruptcy attorneys will consider your income and expenses when drafting this plan. After the court approves it, your repayment plan will dictate your structured payments to creditors over a period of three to five years, after which point, you should no longer have any remaining debt in East Orange.

What to Do Before Filing Your Bankruptcy Case in East Orange, NJ

Before filing for bankruptcy in East Orange, preparation is key. In addition to taking credit counseling courses, debtors must do a complete overhaul of their finances and debt so that they have a thorough understanding of the road ahead.

Take a Credit Counseling Course

In New Jersey, all debtors must take a credit counseling course before they can petition for bankruptcy. This course will be instructional, giving you tips and tricks on budgeting and money management. Credit counseling courses aim to prepare debtors for life after bankruptcy so they do not find themselves in a similar situation in the future.

Review Your Financial Situation

When debt gets so overwhelming, debtors might not actually know how much money they owe and to whom they owe it. Because of that, it will be important to provide our bankruptcy attorneys with a detailed account of your current debt situation, creditors, income, and expenses. All of this financial and personal information will be crucial in allowing us to fully understand the scope of your case and make a plan moving forward.

Getting an Automatic Stay in Your East Orange, NJ Bankruptcy Case

When bankruptcy cases are filed, debtors are given automatic stays. With this stay in place, creditors will not be able to contact you outside of your case.

The harassing and constant phone calls from creditors can make living with debt a nightmare. For relief from such communications, you can file for bankruptcy. The automatic stay that comes along with bankruptcy does not have to be petitioned for in most cases. However, if this is your second or third bankruptcy case in a short period of time, you might have to request a stay on creditors from the court.

If you hear from creditors while the stay is in place, tell our attorneys. Violating an automatic stay might not bode well for creditors in East Orange. Automatic stay violations include sending letters to debtors, calling debtors, or threatening debtors with debt-collection tactics not permitted when a stay is in effect.

Bankruptcy Timeline in East Orange, NJ

While each bankruptcy case is different, all follow a relatively similar timeline in East Orange. We will begin by filing your bankruptcy petition with the court. Negotiations with creditors might follow, as will asset liquidation or the instatement of a repayment plan, culminating in a debt discharge.

Bankruptcy Petition

The bankruptcy petition is no simple document. It will contain your personal information, like your name, address, and Social Security number, as well as a complete list of your creditors and what you owe. On top of the bankruptcy petition, you will have to submit additional documents detailing the specifics of your case. Bankruptcy cases are often complex and, if not initiated properly with a petition, might unravel fairly quickly. Our attorneys will ensure that your bankruptcy petition is thorough and complies with all requirements so you can start out on the right foot with your case.

Negotiations with Creditors

Often, judges assigned to bankruptcy cases will require all parties to engage in some sort of negotiations prior to them getting heavily involved. This is done in the hope that both debtors and creditors can come to an agreement that suits all parties. During these negotiations, our lawyers can sit down with your creditors to review your situation and see if there is a possible settlement. For example, if your main creditor is your mortgage lender, we might be able to renegotiate the terms of your mortgage to make repayment and future payments more achievable. The goal is to mitigate the damage as much as possible to reduce what you have to pay creditors during your bankruptcy case in East Orange.

Asset Liquidation

If you brought a Chapter 7 bankruptcy case, asset liquidation will take place. Identifying assets for liquidation before filing your case will be important so you can be prepared to take this step. New Jersey allows debtors to use either federal or state liquidation exemptions. These exemptions can help you protect certain property from liquidation, like your home or car. Without using these exemptions, such property might be at risk of liquidation in East Orange.

Repayment Plan Implementation

Chapter 13 bankruptcy cases involve repayment plans. In East Orange, these plans must be submitted for approval within two weeks of your bringing your bankruptcy case. All of your debt will be consolidated under one interest rate, keeping it from growing exponentially as you repay creditors. What makes Chapter 13 so appealing to debtors is that it does not require them to liquidate or lose any assets during bankruptcy. That said, repayment plans can take several years to complete, which is something debtors should keep in mind.

Debt Discharge

At the end of your bankruptcy case, you will receive a discharge of any eligible debt. While dischargeable debt differs depending on the bankruptcy chapter you file, you will likely have some debt that is eligible for a discharge. Remember, once your debt is discharged, it is gone, and you do not have to repay applicable creditors in East Orange. This discharge will come at the end of your case. If you file Chapter 7, this might be within four to six months of submitting your bankruptcy petition with the court. Debt discharges for Chapter 13 cases typically come within three to five years in East Orange.

Rebuilding Your Credit Score After Your Bankruptcy Case in East Orange, NJ

Many people shy away from filing for bankruptcy because of its impact on credit scores. While that is something to consider, it is also worth noting that your credit score will likely continue to drop the longer you remain in debt.

Rebuilding your credit while you are in debt to creditors is all but impossible. To do this, you have to first get out of debt, which is what bankruptcy can do for you. While it is true that bankruptcy will lower your credit score, it will also give you the opportunity to rebuild it. In fact, the credit counseling course you took prior to entering bankruptcy should have given you some insight into how to do that. For example, once you are debt-free, you can start making regular payments to your credit card company to rebuild your credit.

If you are married, filing for bankruptcy without your spouse might be wise, as their credit will be unaffected. This can ensure that one of you is still eligible to make large purchases while the other focuses on rebuilding their credit.

If concern about your credit score deters you from bankruptcy, the alternative is living with debt, which will undoubtedly cause your credit score to continue to drop.