Chapter 7 Bankruptcy | Robert H. Johnson, Bankruptcy Attorney

Chapter 7 Bankruptcy

Remove debt while keeping your property Filing for Chapter 7 bankruptcy in New Jersey allows you to get a fresh start when it comes to your financial situation. A trustee is assigned to your case who will be responsible for reviewing your assets and selling those that are not exempt.  In most cases, we are able to exempt all of your property, meaning you keep all of your property.  In order for this to work, you must be forthright and list your assets and your attorney must be thorough to make sure all of your property is protected.

Filing for Chapter 7 bankruptcy in New Jersey bankruptcy court will do the following for you:

 

  • Stop collection actions by creditors immediately
  • Stop car repossession and foreclosure of your home
  • Stop tax liens and wage garnishments
  • Discharge most, if not, all of your debt 

What Are Exempt Assets?

Exempt assets are those that can be protected from creditors when you file for bankruptcy in New Jersey.  Generally, exemptions protect your property up to a certain threshold.  A consultation with a Bankruptcy Attorney will allow you to determine what can and cannot be exempt.  Most individuals can exempt the following assets in Chapter 7 bankruptcy:

  • Homestead exemption – protects your primary residence
  • Personal property – protects personal items, usually those which are either necessities or those which might have sentimental value
  • Motor vehicle – protects your primary form of transportation
  • Wages – protects income you earn (this is not protected under federal law, but is protected in most states)
  • Retirement accounts and pensions – protects the long-term savings you’ve generated for your future
  • Alimony and child support – protects the money you receive through court-ordered support, which may be a vital source of income
  • Public benefits – protects assistance benefits you receive, which often provide vital income
  • Tools of the trade – protects items and property which are necessary for you to work effectively in an occupation
  • Insurance – protects insurance policies that you need to protect your family
  • Wildcard – allows you to protect additional property that is valuable to you

Debts That Cannot Be Discharged

Although filing for Chapter 7 bankruptcy discharge almost all of your debt, there are certain exceptions. The following debts cannot be discharged in a Chapter 7 bankruptcy filing:

  • Back child support
  • Back alimony
  • Debts for personal injury or death caused by driving while intoxicated
  • Student loans
  • Fines and penalties for violating the law (criminal restitution and traffic tickets)
  • Recent income tax debts (within 3 years)
  • Debts you forget to list in your bankruptcy papers

Additionally, a creditor may challenge your request to discharge any of the following debts and the bankruptcy judge can deem them non-dischargeable:

  • Debts incurred by committing fraud
  • Credit purchases of $1,150 or more for luxury goods
  • Loans or cash advances of $1,150 or more taken within 60 days of filing for bankruptcy
  • Debts from willful or malicious injury to another person or their property
  • Debts from embezzlement, larceny, or breach of trust.
  • Some Debts you owe under a divorce decree or settlement

Common Reasons Why People File for Chapter 7 

The most common reasons why people file for Chapter 7 bankruptcy in New Jersey include overwhelming credit card debt, personal loans, payday loans, bad car loans, divorce, separation, the loss of a job, a serious injury (or another type of medical emergency), and other unsecured bills (medical bills).  Bad things sometimes happen to good people.  For the most part, these debts can be discharged completely when you file for Chapter 7 bankruptcy.

What is the Means Test

To be eligible to file Chapter 7 Bankruptcy, your income must be below a certain threshold based on household size and expenses.  This threshold varies by the state and even by the county.  I would be happy to discuss the thresholds as well as ask the right questions to determine whether we can get you below the threshold in New Jersey. 

Reaffirmation Agreement

You can keep assets like your home, your furniture, and your vehicle as long as you pay for them.  Additionally, in some cases, you are required to sign a reaffirmation agreement. This is an agreement that states you reaffirm this debt, wish to keep the debt to your name, and will not try to get rid of this debt again for at least another eight years.  It is important to talk to your attorney about what you would like to keep and to hire the right attorney that will provide you strategies to protect yourself from issues that could arise after your bankruptcy has been finalized.

Schedule a Chapter 7 Consultation with a New Jersey Bankruptcy Attorney Today

If you are struggling with credit card debt, medical bills, or any other debt; it’s time to get control of your finances. Call the office of Robert H. Johnson, Bankruptcy Attorney at 856-298-9328 to schedule a consultation. Getting your finances under control before you fall further into debt can relieve a lot of stress and help you get a fresh start.

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