Our practice emphasizes the areas of consumer and small business bankruptcy. We protect the rights of all our clients by filing bankruptcy under the appropriate chapter that best serves their interests and meets their goals and objectives.
There are primarily 3 chapters of bankruptcy that are used which will be explained briefly below. However there are some common factors and benefits in each type of bankruptcy.
When a bankruptcy petition is filed the automatic stay goes into effect and all lawsuits that have been commenced against the debtor must stop immediately, unless the bankruptcy court grants a creditor or other potential litigant permission to lift the automatic stay. If there is the potential for litigation to be commenced, when a petition is filed the automatic stay is in place and no litigation can be started. Only criminal litigation is exempt from this.
CHAPTER 7 BANKRUPTCY: The CHAPTER 7 BANKRUPTCY is often referred to as a straight “liquidation” bankruptcy. This is utilized both by individuals and businesses that cannot pay their debts and have little to or no nonexempt assets.
There are various debts that cannot be discharged in a CHAPTER 7 BANKRUPTCY which include among other things criminal charges, restitution orders, any form of victim compensation, alimony or child support, recent tax debts and with rare exceptions student loans.
The CHAPTER 7 BANKRUPTCY will provide you with a fresh start, and then you will be able to rebuild your credit.
Under both federal and New Jersey state law you are allowed a certain amount of exempt assets which will not be at risk in the bankruptcy proceeding. Retirement accounts are exempt.
CHAPTER 11 BANKRUPTCY: The CHAPTER 11 BANKRUPTCY is generally referred to as a business reorganization because it allows a business the opportunity to restructure and pay creditors for a plan in a specific matter in fashion that would not be available to them outside of bankruptcy.
The CHAPTER 11 BANKRUPTCY is also utilized by individuals whose assets exceed the limits for CHAPTER 13 BANKRUPTCY.
The CHAPTER 11 BANKRUPTCY is a very complicated and a unique type of bankruptcy in which very few attorneys are experienced and skilled. The processes of a CHAPTER 11 BANKRUPTCY are extremely complex and time-consuming.
CHAPTER 13 BANKRUPTCY: This type of bankruptcy is utilized when you have assets that you want to protect and is frequently referred to as a wager’s plan. A typical CHAPTER 13 BANKRUPTCY payment plan lasts between 3 to 5 years and you will receive a discharge of your unsecured debts at the end of the plan.
Through the use of a CHAPTER 13 BANKRUPTCY plan you can organize payments of non-dischargeable debts into a more manageable fashion and be able to stop any litigation that is been commenced against you as well.
Emergency bankruptcy petitions: These petitions will stop wage garnishments, mortgage foreclosure actions, and sheriff sales immediately upon filing the automatic stay goes into effect and all litigation ceases until further order of the bankruptcy court. An emergency petition can be filed in 1 to 2 days.
Adversary proceedings: When a creditor or trustee believes that something appropriate has been done or there is a challenge to the discharge of a debt, or tax debts are involved, an adversary proceeding is required. This is frequently like a miniature trial within the scope of the bankruptcy but is not included in representation for a basic bankruptcy.
Bankruptcy provides many benefits and there’s a lot more detail to each chapter than the brief information presented above. Please contact this office for free consultation and learn the power of Bankruptcy.
Bankruptcy can also be used to eliminate your unsecured debts, and in a separate second Bankruptcy proceeding, it can be utilized for elimination of second and third mortgages