Category Archives: Bankruptcy Help

Do You Qualify For a Chapter 7 Bankruptcy?

Bankruptcy

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Qualifying for Chapter 7 bankruptcy is something you should discuss with an attorney.  But there is a basic set of guidelines of which you should be aware.

What is Chapter 7 bankruptcy?  Chapter 7 is the most common type of bankruptcy; the name refers to a chapter of the U.S. Bankruptcy law.  Under a Chapter 7 bankruptcy, some of a debtor’s property may be liquidated, or sold, to pay creditors.  But the debtor’s property is not always sold, such as in a “no asset” case, where the debtor does not have enough property to sell to satisfy any creditors.  If all goes well, the end result of a Chapter 7 bankruptcy should be a discharge of the debtor’s personal liability from debts previously owed.

Who may file for a Chapter 7?  Individuals or businesses.

Are there income limits? If your current monthly income is more than the median income for your state, you must do a means test to see if you qualify to file for a Chapter 7. If you need to complete the means test, you should get a lawyer, because it can be complicated.

What if I’ve filed for bankruptcy in the past? Again, there are some complex rules here and you need to speak with a bankruptcy attorney. You might need to wait a certain period of time, depending on what happened as a result of your last filing and what chapter you filed under, before you can file again.

What about the credit counseling requirement? You are required to take a credit counseling course before filing. At the end of the course, you receive a certificate that you provide at the time of filing. The certificate expires after 180 days. The course you take must be given by a provider that has been pre-approved by the bankruptcy court.

These are only some bare-bones basics about Chapter 7 eligibility. There are situations where filing for bankruptcy under a different chapter (such as Chapter 13) might be the better course of action for a debtor. You should consult an attorney first to find out which is best for you.

Got a debt collection lawsuit before your bankruptcy is filed?

Household Debt 11Jun09

If you’ve got a debt collection lawsuit against you before you had a chance to file your bankruptcy case, don’t panic.

A bankruptcy filing normally stops all lawsuits against you. But not everyone who is planning to file for bankruptcy can do so right away to stop the debt collection lawsuits.

 

If you’ve been sued by a debt collector, share the details of the debt collection lawsuit with your bankruptcy attorney. Listen to their recommendation. The course of action they recommend will depend on the type of debt-collection lawsuit and on the planned timing of your bankruptcy.

In New Jersey, it might be OK to ignore the typical debt collection lawsuit if you’re going to file the bankruptcy relatively soon anyway. It will take a little while for the debt collector to get a judgment against you and then to get the court to order a bank levy or a wage garnishment. Your bankruptcy attorney can use this time to their advantage to prepare your case. Make sure you get everything that your attorney needs to them as soon as possible, since the longer you wait, the higher the risk that debt collectors could get at your money.

If you’ve got a debt collection lawsuit against you, it might be time to speak with a bankruptcy attorney about your options. Schedule a phone appointment with attorney Jennifer Weil by calling (201) 676-0722.

The 4 Biggest Bankruptcy Myths

Myth (Sphinx)

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You shouldn’t file for bankruptcy, ever. That’s what the conventional wisdom seems to say. But is this true? Here, I look at the 4 biggest bankruptcy myths faced by most people who are considering filing for bankruptcy.

You need to do what’s right for you. If filing for Chapter 7 bankruptcy turns out to be the right thing for you, then do it. Don’t let the naysayers get in your way.

Because here’s the thing: Each and every person who is having problems with debt needs to do their own analysis, preferably after consulting with one or more professionals, to determine whether Chapter 7 bankruptcy is right for them. Blanket negative statements about the evils of bankruptcy don’t help with your analysis.

Let’s look at these bankruptcy myths one at a time:

  1. You’ll ruin your credit score. If you’re having bad debt troubles, your credit score is probably not good. But maybe you’re still current on all your credit cards. Where that’s the case, your credit score has to go down if you truly cannot afford to pay your debts over the long haul. Don’t worry, there’s a way to improve your score.
  2. You won’t be able to get a new job. Yes, many employers run credit checks on prospective employees. But many employers do not. Sometimes it depends on what industry you are in. Trying to get a bank job? Banks will probably run credit checks on prospective employees. But many “mom-and-pop” small, non-corporate employers do not. In other words, this is a factor you should consider, but it may not be the end all, be all factor that decides whether or not you file.
  3. You won’t be able to rent an apartment. Here again, some landlords run credit checks and some do not. You probably won’t have your pick of every single new apartment to move into, but you wouldn’t have anyway, because some apartments rent for more than you can afford. This factor depends a lot on what’s available in the area where you want to live. So it’s something to consider, but it’s not the only factor (and not even a huge one, at that).
  4. Utility companies will make you put down a deposit. Utility services cannot be cut off because you filed for bankruptcy. If you owe a past debt to a utility, then you may have to put down a deposit after you file. This is why it’s a good idea to be current on your utility bills prior to filing for bankruptcy.

If you’d like help looking into whether bankruptcy is right for you, call (201) 676-0722 to schedule a free phone appointment with attorney Jennifer Weil.

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