What You Need to Know About Chapter 7 Bankruptcy - Robert H. Johnson

Chapter 7 bankruptcy is a legal process that allows those who qualify the ability to discharge most, if not all, of their debt. Most people who file this type of bankruptcy in New Jersey will rid themselves of all their debt. They can clear a lot of debt from their name by filing with the help of New Jersey bankruptcy attorney Robert H. Johnson in Cherry Hill.

Chapter 7 Bankruptcy Filing Considerations

If you are struggling with debt, consider the following when deciding whether or not to file for Chapter 7 bankruptcy in New Jersey:

  • You already worked with a credit counselor
  • There was an attempt to negotiate with your creditors and failed
  • You tried consolidating your debt
  • You continue to accrue debt no matter how much you’ve tried to pay it down

Filing a petition for Chapter 7 can put an immediate stop to creditors contacting you about the money you owe. This is usually a temporary pause in collection actions, which is why it’s important that you have an experienced bankruptcy attorney represent you.

The Bankruptcy Filing Process

The Chapter 7 bankruptcy filing process is as follows:

  • Using an approved counseling agency, you must complete bankruptcy counseling no less than 180 days prior to filing your petition
  • Pass the means test, which determines if your income qualifies for bankruptcy filing
  • File the bankruptcy petition with the local bankruptcy court
  • Attend a meeting with your creditors and your lawyer
  • Complete a financial management course using a certified agency within 60 days of the meeting of creditors
  • Obtain the discharge from the court (this lists the debts that have been discharged and can no longer be collected by creditors)

Negative Impact of Chapter 7 Bankruptcy

As with any legal decision you make, there are potential negative impacts, including when you file for Chapter 7 bankruptcy. This is an important reason why you should consult with an experienced bankruptcy attorney. These issues that need to be discussed before filing for this type of bankruptcy, include the following:

  • Property might need to be sold so that your creditors can be paid for your debt
  • Liens might be placed on your property so that creditors have a stake in it (if you sell the property, proceeds go to the lienholder to pay for your debt)
  • Your credit score could take a hit

When you file for Chapter 7 it can remain on your credit reports for up to 10 years. While this can be damaging, it usually does not prevent you from obtaining new credit, a new loan or acquiring a mortgage. That is why Bankruptcy is referred as a fresh start.

Debt That Can be Erased in Chapter 7

The debt that can be erased, or discharged in a Chapter 7 filing includes the following:

  • Car loans
  • Medical bills
  • Credit cards
  • Utility bills
  • Payday and personal loans
  • Judgments from debt collection agencies and credit card companies

Debt That Cannot be Erased in Chapter 7

The debt that cannot be discharged in a Chapter 7 bankruptcy filing includes the following:

  • Student loans
  • Fines owed to the government
  • Alimony
  • Child support

Schedule a Consultation with Robert H. Johnson Today

If you are struggling with debt and see no end in sight, it’s time for you to consult with an experienced New Jersey bankruptcy attorney. Call the office of Robert H. Johnson in Cherry Hill at (856) 298-9328 to schedule a consultation today. Mr. Johnson can review your situation, advise you of your options, and help you file a petition for bankruptcy so you can begin to live a debt-free life.

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