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Bankruptcy FAQs

Bankruptcy FAQs

1.    What is a Chapter 7 bankruptcy and how does it work?

Chapter 7 is a liquidation bankruptcy meaning it can eliminate most types of unsecured debt.  Examples of unsecured debt are credit cards and medical bills.  Individuals, married couples, corporations and partnerships can all file a Chapter 7 bankruptcy if eligible.

2.     What is a Chapter 13 bankruptcy and how does it work?

Chapter 13 is a reorganization or repayment bankruptcy that allows the debtor to enter into an interest-free debt repayment plan to pay back all or some of the debtor’s debts over a 3 to 5 year period.  The length of the plan will depend on the debtor’s property, income and expenses.  During this time, creditors must abide by the plan and are not permitted to collect from you or contact you.

One crucial aspect of a Chapter 13 bankruptcy is that you must have regular income for you will be required to pay both your monthly living expenses and a repayment to the court for your consolidated debts.

A Chapter 13 bankruptcy is very powerful because it provides a mechanism for debtors to prevent foreclosures and sheriff sales and stop repossessions and utility shutoffs while catching up on their secured debt.

3.     If I file bankruptcy, will creditors stop harassing me?

As soon as you come to our office for a free consultation and hire us as your New Jersey bankruptcy lawyer, creditors will no longer be permitted to contact you or your friends and family members.  After hiring our firm, you will be able to give our firm’s name and number to any future creditors who call.  The sooner you come to our office and meet with one of our New Jersey bankruptcy lawyers the sooner the harassment will stop.

4.     Can I keep my house?

One of the biggest fears people have when first discussing filing a bankruptcy is the possibility of losing their homes.  Bankruptcy is meant to help you get a fresh start not hurt you.  There are several different ways to deal with homes in bankruptcy proceedings; listed below are some explanations.

If you are current on your mortgage payments and you file a Chapter 13 bankruptcy, you will not lose your home as long as you can continue to keep current with the mortgage payments.  If you file a Chapter 7 bankruptcy and you are current on your mortgage payments, whether or not you will lose your house depends on the amount of equity you have in the property as well as the amount of the homestead exemption to which you are entitled.  Homestead exemptions vary from state to state so it is best to contact one of our New Jersey bankruptcy lawyers at (201)489-5500 to discuss your specific situation.

If you are behind on your mortgage payments, typically, the best way to keep your house is to file a Chapter 13 bankruptcy.  However, you will need to resume making your regular mortgage payments and repay your missed payments through the Chapter 13 repayment plan.  There is a much greater chance you will lose your house if you file a Chapter 7 bankruptcy and are behind on your payments.

Since everyone’s situation is different, we strongly recommend that you contact our office at (201)489-5500 or kopelaw@kopelmannj.com and speak to one of our New Jersey bankruptcy lawyers to discuss your specific set of circumstances. 

5.     Can I keep my car?

Depending on whether you file a Chapter 7 or a Chapter 13 bankruptcy, there are ways for you to keep your vehicle.  In a Chapter 7 bankruptcy you must be current with your car payments if you want to keep your vehicle.  If you are not current when you file, you must be able to catch up on your payments, usually in a short amount of time.  

If you are filing a Chapter 13 bankruptcy and you are current with your car payments, you can continue to make the same payment outside the bankruptcy plan.  If you are behind on your car payments, one of our New Jersey bankruptcy lawyers can help you arrange for the payments to be included in your Chapter 13 repayment plan.  Either way you will be able to keep you car.

6.     Can I get rid of student loans or tax debts in a bankruptcy?

Today, the most effective way to get relief from student loans is through a Chapter 13 repayment bankruptcy.  Student loans cannot be discharged in a Chapter 7 bankruptcy.  Using a Chapter 13 bankruptcy, our New Jersey bankruptcy lawyers may be able to consolidate your student loan debt into a repayment plan.  This will ease the burden of possible garnishments as well as harassment from student loan agencies.  Call our office today at (201)489-5500 to speak with one of our New Jersey bankruptcy lawyers on easing this burden.

As for tax debts, they are generally dischargeable only if you file bankruptcy more than 3 years after you have filed a timely and accurate tax return.  If your tax return had been filed late, the tax debt is generally dischargeable only if you file bankruptcy more than 2 years after filing an accurate return.  However, tax matters can be complicated and it is best to contact one of our experienced New Jersey bankruptcy lawyers at (201)489-5500 or kopelaw@kopelmannj.com to fully discuss all your options.

7.     Do all of my creditors have to be listed in the bankruptcy?

Yes, all of your creditors must be listed in your bankruptcy along with their names and addresses.  This is important so that all of your creditors can receive notice of the bankruptcy and, if you are repaying your creditors through a Chapter 13 bankruptcy, can get their share of the money that is being repaid.  Not listing all of your creditors is in violation of the law.

8.     What if I forget to list a creditor in my bankruptcy?

If you forget to list a creditor, you should contact your attorney as soon as you realize the creditor has been left out.  At that time you can provide your attorney with the name and address of the creditor and the type and amount of the debt.  Omitted creditors can often be added to the bankruptcy, however, your attorney will advise you on how things will proceed.  Our experienced New Jersey bankruptcy lawyers can help you handle this issue if it arises.

9.     Does my spouse have to file jointly with me?

If all or most of the debts you have are in your name only, your spouse may not have to file.  However, your spouse’s income can have an impact on whether you can file a Chapter 7 or a Chapter 13 bankruptcy.  Unless your spouse is legally listed as a co-debtor, creditors cannot come after your spouse for any money.  Also, if your spouse is not included in the bankruptcy, it should not appear on his/her credit report.  Since the laws do vary from state to state, it is best to come in to our office to meet with one of our New Jersey bankruptcy lawyers to determine whether your spouse should or should not file.

10.   How do I know if I should file bankruptcy?

Are you only able to pay the minimum monthly payments on your credit cards?  Do your credit card balances keep growing?  Are your wages being garnished or threatening to be garnished?  Is your home near foreclosure or is your car about to be repossessed?  Do you have medical bills that have put you so deep in debt?

If you have answered “yes” to any of the above questions, a bankruptcy may be the relief you have been looking for.  It is best to contact our office at (201)489-5500 or kopelaw@kopelmannj.com and speak to one of our experienced New Jersey bankruptcy lawyers so they review the specifics of your situation and get you on the road to a fresh start.  You can also take a FREE BANKRUPTCY ASSESSMENT and a lawyer from our office will contact you directly about your case.

11.    Who knows about my bankruptcy case?

The only parties that will be notified of your bankruptcy are your creditors, the bankruptcy court and, in some cases, the Internal Revenue Service (IRS).  Your employer is not notified of your bankruptcy unless your employer is listed as a creditor in the bankruptcy.

12.    What can I do to rebuild my credit after filing bankruptcy?

Even though bankruptcy can be reported on your credit report for up to 10 years, you can begin to rebuild your credit immediately.  One of the best places to start rebuilding your credit is your credit report.  Your credit report is the place where most lenders look before extending credit.

The Law Offices of Lee M. Perlman is a knowledgeable and experienced law firm in New Jersey dealing with credit reporting issues.  We will review your credit report and help remove any inaccuracies that may exist.  We can also dispute inaccurate information and, if necessary, file suit in federal court to have the inaccuracy corrected.  By making sure that your credit report is as accurate as possible, you are on the way to establishing a new and better credit rating.

Our office can also help put you in touch with legitimate financing companies who can assist you in purchasing a new home or car.  We are here to help you rebuild your credit not fall into the credit trap with unsecured credit cards.

After you file your bankruptcy call our office at (201)489-5500 so we can help you get started rebuilding your credit today.  This is just one step to getting a fresh start.

13.   I'm a new client. What should I bring to my first meeting with you?

       1. 6 months of your last pay stubs or a print-out from your employer of the last 6 months of your pay stubs. If you cannot locate 6 months, bring as many as you can gather.           

       2. The last three tax returns, if you can get them together.

       3. Any and all bills that you intend to include in the bankruptcy. This includes but is not limited to, any and all collection agency notices, lawyer's letters or lawsuits.

      4. Any information on the value of your real estate, if you own real estate and the mortgage payoff information.

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  • Things had been going from awful to dire. I didn’t think there was a chance to keep my house, let alone my business and my wife. I’ve kept everything - and it’s thanks to you. I thought I’d have to see a judge. But going with you for my 341(a) meeting was not scary at all. You made the experience tolerable and understandable. God bless you.

  • You held my hand and walked me through this mess. I will be forever grateful. I’m still and my new job and things are really looking up. Your entire office made things such a easy experience.

    Mr. & Mrs. L

  • Thank you for everything. I knew the moment I met you that things were going to get better. You put me at ease. I was initially really embarrassed to file for bankruptcy.... but you made me understand that this was my right and it’s all about going forward. Thank you again.

    Melissa & George