When New Jersey residents are in financial distress, they might begin to think that bankruptcy would be a viable way to deal with the overwhelming amount of debt they incurred for whatever reason. Unfortunately, there are so many myths surrounding Chapter 7 bankruptcy that some people might not file for fear that those myths are true. However, understanding the facts about bankruptcy can help dispel those myths.
Once a New Jersey resident has decided to file for bankruptcy, it will be helpful to understand how the process works. A Chapter 7 is a liquidation, which means that the trustee could sell any non-exempt assets in order to pay creditors. In many cases, all of a filer's property falls under an exemption, and qualifying debts are discharged.
On the one hand, the U.S. Bankruptcy Code allows filers to convert their bankruptcies from Chapter 7 to Chapter 13. On the other hand, what New Jersey residents might not know is that such a conversion is only permitted if the provisions of another section of the code are met. That section requires that a Chapter 7 filer meets the Chapter 13 bankruptcy filing requirements.
Some New Jersey businesses are run by one individual doing business as the company. When the company is in financial trouble, the individual is often found liable for the company's debts. Many of these small business owners will file for Chapter 7 bankruptcy in an attempt to rectify their financial situations.
Many New Jersey residents who are overwhelmed by debt want to file for bankruptcy liquidation. However, they might fear that they will have to surrender all of their property to pay their creditors. Fortunately, there are property exemptions for those who are eligible to file Chapter 7 bankruptcy. There are federal exemptions and state exemptions, and a filer may be able to choose between the two.
New Jersey residents encounter financial difficulties from a variety of sources. Some are recovering financially from divorce, long-term illnesses or injuries, or some other life-altering calamities that end up leading to an overwhelming amount of debt. Others simply made ill-advised financial decisions. Whatever caused you to end up under a mountain of debt, Chapter 7 bankruptcy might give you a fresh start financially.
Being overwhelmed by debt can cause a great deal of stress, fear and anxiety. Those feelings may be alleviated by making the decision that filing for bankruptcy in New Jersey is your best option. However, the process is paper intensive and complex, which may only bring back those emotions. Fortunately, you do not have to go through the process alone.
To be clear, student loans are nearly impossible to discharge in a bankruptcy. However, the ability to repay them could be hampered by other debts a New Jersey resident incurs. Therefore, having those debts discharged in a bankruptcy could free up the necessary income to make the payments.
JPMorgan recently came to a settlement regarding its credit card debt collection practices. Even though some consumers may receive restitution as a result, it could be too late for some New Jersey residents whose credit has been ruined by illegal debt collection practices. For them, filing for Chapter 7 bankruptcy could put a stop to any further damage and provide a fresh start financially.
Any New Jersey resident who has been to a doctor understands how confusing, complicated and frustrating the medical billing process can be. Even though changes are on the horizon regarding how medical bills are reported to the credit bureaus, it may not be enough for some people. Filing for bankruptcy could help many patients clear the slate and give them a fresh financial start.