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Filing for Chapter 7 bankruptcy

Debt can often seem like a form of bondage to those in Hackettstown who suffer from it. Missed payments, late fees and other penalties can quickly add up to the point of one facing a seemingly insurmountable financial obstacle. In such cases, personal bankruptcy offers protection from further collection efforts, thus halting the growing liabilities compounding one's troubles. Chapter 7 bankruptcy also offers the added advantage of allowing certain debts to be discharged. It is for this reason why this particular form of bankruptcy consistently ranks as the most popular, with the American Bankruptcy Institute reporting it comprising over 67 percent of all non-business bankruptcy filings from the second quarter of the 2018 fiscal year. 

According to the website for the Federal Judiciary, when one first petitions the court to initiate a Chapter 7 case, they must include the following: 

  • A detailed breakdown of both their assets and debts
  • A record of their current income and expenditures 
  • A statement explaining their current financial affairs
  • Any unexpired leases or executory contracts they are involved with

Avoiding foreclosure through bankruptcy

If you find yourself facing foreclosure on your home in Hackettstown, then people may begin to advise you that filing for personal bankruptcy is the easiest way to ensure that you keep it. Several of those that we members of our team here at Jonathan Stone Attorney at Law have worked with in the past have been given similar advice, only to later discover that bankruptcy is not the automatic answer to foreclosure that it has been made out to be. Before you make this decision, it is important that you understand exactly how bankruptcy can affect foreclosure. 

As you contemplate your bankruptcy options, you may immediately be drawn to the appeal of a Chapter 7 case. This allows you to have eligible debts completely discharged (which is why it tends to be the more popular personal bankruptcy option). Yet when it comes to stopping your home from being foreclosed, it might not work. If your mortgage lender has already initiated a foreclosure sale, all a Chapter 7 does is the delay the sale with its automatic stay. Once your case is discharged four to six months later, you will still be facing foreclosure. Your lender can also petition the court to lift the stay in its case to allow the sale to go through. 

Diocese paying $20M to abuse victims as part of bankruptcy

For a company that is struggling with debt, bankruptcy may be a viable option in helping it get past such challenges and re-establishing itself in Hackettstown. Yet the fact that some companies are able to file bankruptcy and still remain in operation may cause some to wonder whether said businesses are simply taking advantage of bankruptcy laws to get out from under their debts. What those who think this may not know is that the rules governing a Chapter 11 (which allows businesses to reorganize themselves at the approval of their creditors) are very strict in how a business' debts are discharged, even going so far as to mandate many still be paid. 

This fact is evidenced in a recent Chapter 11 filing initiated by a Catholic diocese in Montana. The diocese is currently facing litigation stemming from over 80 reported cases of sexual abuse that were perpetrated by clergy members primarily between 1950 and 1980. In this case, the victims seeking compensation represent one of the diocese's creditors. The state's federal bankruptcy court recently announced that the diocese must pay out $20 million to these victims. The bulk of the settlement will be generated through the sale of a number of the diocese's properties, while insurance is expected to cover the remaining portion. 

What happens to a company after filing?

If you’re a small business owner in New Jersey, filing for Chapter 11 bankruptcy is a daunting prospect. Because Chapter 11 allows for a reorganization of debt it doesn’t necessarily mean that your business is lost forever. The Balance offers the following explanation so you can understand your options when it comes to getting your business finances in order.

Layoffs may occur

How can I prevent overspending during the holidays?

Do you spend too much money over the holidays? If so, you’re not alone. Many people find themselves overspending on gifts, food, and entertainment this time of year. Fortunately, there are steps you can take to prepare for the next holiday season right now, as explained by U.S. News & World Report.

Plan ahead

Bad spending habits that can leave you in debt

Poor spending habits can easily lead to debt for many people in New Jersey. Identifying bad habits is the first step to changing your behavior and fixing your finances once and for all. The following are a few examples of spending habits you must change if you want to avoid financial instability.

AARP cautions against letting late fees pile up regarding credit card payments. You can avoid these late fees by implementing automatic payments through your bank, for both credit cards as well as other recurring bills. That way you won’t need to worry about remembering to make payments each month, which can be difficult when you have numerous bills to pay. 

Can I discharge a student loan through bankruptcy?

Many college graduates in New Jersey find themselves unable to pay back their student loans, which can sometimes be exorbitant. However, unlike other types of debt student loans are not typically able to be discharged in bankruptcy. According to Forbes, this trend could be changing, which might help students get a handle on debt and prevent future financial hardship.

In the past student loans were able to be discharged in many instances. After 1976 Congress enacted laws that stated that these loans could only be discharged if students had been repaying them for five years, which was then extended to seven years. In 1998 the laws changed yet again to stipulate that student loans could not be discharged unless the debtor showed that repaying a loan caused undue hardship.

Credit card debt and Chapter 7

Many people choose to move forward with a bankruptcy because they are struggling with credit card debt, a problem that has become especially common in the U.S. Not all of the people who take on a significant amount of credit card debt do so out of irresponsibility. In fact, some find themselves in this tricky position because of a health crisis or an injury that left them unable to work, prompting them to turn to their credit card to buy groceries or take care of bills. Worse, interest may have made their debt balloon out of control.

For some people in New Jersey, Chapter 7 bankruptcy is a smart way to tackle credit card debt. There are, of course, many different options when it comes to eliminating credit card debt through bankruptcy so it is important to review all of your choices before settling on one particular route. Chapter 7 bankruptcy can be a great way to discharge credit card debt and find a new financial start. By taking this route, you may be able to completely free yourself from the debt that has been bringing you down for months (or maybe years). However, each case is unique and a creditor may decide to file a complaint.

Chapter 7 or Chapter 13: Which is best for you?

If you are struggling with overwhelming debt in New Jersey, you may be considering bankruptcy as the only way out. If so, you likely have many questions about Chapter 7 versus Chapter 13 so you can make an informed decision as to which one is right for you.

As FindLaw explains, both Chapter 7 and Chapter 13 have their own advantages and disadvantages. Determining which one best suits your purposes depends on your own financial situation and what you wish to accomplish with your bankruptcy.

Should I file for chapter 11 bankruptcy?

While Chapter 11 bankruptcies are normally utilized by businesses, individuals can also pursue this option. Doing so takes a bit of work however, as Chapter 11 can be more complicated than Chapter 7 or 13, which most people go for when filing for bankruptcy. Debt.org explains what you need to know if you choose this debt relief option and how you can ensure the best possible results.

Much like Chapter 13, Chapter 11 bankruptcy reorganizes debt into a manageable payment plan, which entails making payments over a period of time. A person can opt to file or can be forced into filing for Chapter 13 when receiving petitions from three or more creditors. A repayment plan is then created, and creditors get to vote on whether it’s accepted. If not, you have the option of requesting a cramdown, which means creditors will be forced to accept it. You may also want to take the plan offered by creditors to protect your property. 

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