Chapter 7 Bankruptcy
in NJ
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For Individuals:
Chapter 7 is the most popular form of
bankruptcy in America. In 2009 there
were over 800,000 filings for chapter 7,
which is more than double the filings
for chapters 11, 12, and 13 combined. It
is so popular because Chapter 7 offers
debtors a way out. If you are having
trouble making payments and making ends
meet, The Levine Law Firm, LLC can help
you.
Immediately after filing chapter 7, the
court notifies creditors, and an
automatic stay takes effect. The stay
prevents creditors listed in the
petition from taking action to collect
their debts or otherwise enforcing their
rights. An appointed trustee can take
possession of the debtor’s non-exempt
property and distribute it among
creditors. However with most chapter 7
cases, all property is exempt, which
allows the debtor to keep most of what
they have and walk away with a fresh
start.
The policy behind United States
bankruptcy law is to allow an honest
debtor to start anew without financial
burden. In Chapter 7, most debts can be
discharged, or in other words disappear.
As long as it is an honest claim,
medical bills, loans, credit card
purchases, and cash advances and more
may all be discharged.
Certain debts under chapter 7 cannot be
discharged. These can include taxes,
alimony, child support, student loans,
criminal fines, debts related to drunk
driving, debts not listed in the
bankruptcy petition, and certain debts
incurred within 60 days of filing the
petition.
Debtors do actually keep all of their
property in most Chapter 7 cases. The
bankruptcy code aims to give a fresh
start, not to punish. If the debtor has
expensive cars or jewelry, these can be
sold to recover some of the debt. If a
debtor can not pay their mortgage, and
if it will be profitable to do so, their
home may be sold to help repay debts.
Bankruptcy does put a bad mark on your
credit rating, but so does not making
payments on loans and debts. The overall
effect of bankruptcy is actually less
harmful than living with debt. A person
has no debt after bankruptcy, and cannot
file again for 6 years. So many
prospective lenders feel that a recently
discharged debtor is less of a risk than
a one buried in debt. If you are in a
hole and swamped by creditors, don’t
keep digging. Let the law and The Levine
Law Firm, LLC help you out of debt by
filing chapter 7.
For Businesses:
Filing chapter 7 for a business can be
summed up in one word, liquidation.
There are other options for those
businesses that do not wish to go this
route, mainly chapter 11. Under chapter
7 the company ceases all operations and
goes out of business. A trustee is
appointed to liquidate, or sell, all of
the company’s assets and is used to pay
off the debt. Secured creditors, such as
banks, are paid first. Unsecured
creditors such as other banks,
suppliers, and bondholders, have the
next claim. Stockholders and owners of
the company have the last claim on
assets. They may not receive anything if
the secured and unsecured creditors are
not fully repaid. If your business has
problems that are so serious that it
cannot continue operations, Chapter 7
may be the only option. Give The Levine
Law Firm, LLC a call to help you make
the most of what remains by filing
chapter 7 and liquidating the company’s
assets.
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