Union City, NJ Bankruptcy Lawyers

Bankruptcy is a legal process that provides individuals or businesses with overwhelming debts the opportunity to seek financial relief by eliminating or restructuring their debts. It is a formal proceeding carried out in a court of law, and it aims to offer a fresh start to debtors burdened with unmanageable financial obligations.

The team at our law firm can provide invaluable assistance to individuals or businesses intending to file for bankruptcy. We will help individuals determine the most suitable type of bankruptcy for their specific situations and guide them through their filing processes. We can also represent our clients during bankruptcy proceedings, negotiate with creditors, and ensure that their rights are protected.

Get support and guidance from our experienced bankruptcy lawyers by calling Young, Marr, Mallis & Associates today at (609) 755-3115.

What Are The Different Types of Bankruptcy that Can Be Filed in Union City, NJ?

There are multiple types of bankruptcy that may be filed in New Jersey. After reviewing your case, our bankruptcy attorneys can determine which of the following may be helpful to you:

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” is designed to provide a fresh start to individuals and businesses with significant debt burdens and limited assets. The process begins by filing a petition with the bankruptcy court, where the debtor provides a comprehensive list of their assets, liabilities, income, and expenses. An appointed trustee evaluates the debtor’s assets to determine which ones are exempt from liquidation under New Jersey law. Non-exempt assets are sold, and the proceeds are used to repay creditors. Most unsecured debts are discharged, relieving the debtor from personal liability for those debts. Chapter 7 bankruptcy is typically suitable for individuals or businesses with little to no disposable income and a substantial amount of unsecured debt, such as credit card debt, medical bills, and personal loans.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as “reorganization bankruptcy,” is a viable option for individuals with a regular source of income who want to restructure their debts while keeping their assets. To file for Chapter 13 bankruptcy, the debtor must submit a repayment plan outlining how they intend to repay their debts over a three-to-five-year period. The plan should prioritize secured debts like mortgage or car loans while also paying a portion of unsecured debts. The debtor makes regular payments to a court-appointed trustee, who then distributes the funds to creditors according to the approved plan. Once the repayment period is successfully completed, any remaining eligible unsecured debts are discharged. Chapter 13 bankruptcy is often suitable for individuals who are facing foreclosure or repossession of assets and wish to retain their property while catching up on past-due payments.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is mainly intended for businesses or individuals with substantial debts and complex financial situations. It allows the debtor to reorganize their finances, operations, and debts to stay in business and continue their operations. Under Chapter 11 bankruptcy, a debtor becomes a “debtor-in-possession” and retains control of their assets while developing and presenting a plan of reorganization to creditors. Creditors then vote on the plan, and if approved, the court confirms it, and the debtor continues making payments to creditors according to the restructured plan. Chapter 11 bankruptcy is applicable to businesses seeking to continue their operations and restructure their debt load.

Chapter 12 Bankruptcy

Chapter 12 bankruptcy is specifically designed for family farmers or fishermen facing financial difficulties. Similar to Chapter 13, Chapter 12 bankruptcy allows these family farmers and fishermen to reorganize their debts and continue their operations. The filing process involves proposing a repayment plan, which is subject to court approval. Once the plan is confirmed, the debtor makes regular payments to the trustee, who then distributes the funds to creditors over a three-to-five-year period.

Chapter 9 Bankruptcy

Chapter 9 bankruptcy is unique to municipalities, such as cities, towns, and counties, that are facing overwhelming debt and need to restructure their finances. This type of bankruptcy allows the municipality to propose a plan to adjust its debts while continuing to provide essential services to its residents. The filing process and eligibility criteria are more specialized, and it requires approval from the bankruptcy court.

How Will Filing for Bankruptcy Affect Your Credit Score in Union City, NJ?

Filing for bankruptcy can have significant and long-lasting effects on your credit score. The impact on your credit score will largely depend on the type of bankruptcy you filed and your previous credit history.

For example, a Chapter 7 bankruptcy will remain on your credit report for up to ten years from the date of filing. As a result, it will have a substantial negative impact on your credit score. Your credit score is likely to decrease significantly, especially if you had a relatively good credit score before filing.

Furthermore, a Chapter 13 bankruptcy remains on your credit report for up to seven years from the filing date. While it still has a negative impact, the impact may be slightly less severe compared to Chapter 7, as you are repaying a portion of your debts and showing a commitment to honoring your obligations.

It is essential to understand that the credit reporting agencies do not determine how much your credit score will be affected by a bankruptcy. Instead, they use the information provided in your credit report to calculate the score using their proprietary algorithms. As a result, the precise decrease in your credit score after bankruptcy may vary depending on other factors, such as your credit history, payment behavior, and the overall state of your credit report.

Moreover, filing for bankruptcy can result in additional negative entries on your credit report, such as “bankruptcy public record” and “accounts included in bankruptcy.” These notations can further hurt your creditworthiness and may deter lenders from offering credit at favorable terms in the future.

Call Our Bankruptcy Attorneys for Assistance with Your Case in Union City, NJ

Get support from our experienced bankruptcy lawyers at Young, Marr, Mallis & Associates by dialing (609) 755-3115.