Filing For Bankruptcy in New Jersey: Step by Step
Filing for bankruptcy can be an overwhelming decision. There is much to consider, including evaluating all your options and understanding the consequences of the process. On the brighter side, bankruptcy can provide relief to people and businesses that can no longer pay their debts, either by liquidating their assets or creating a debt repayment plan, according to the US Courts.
If you have already made up your mind to go ahead with the process, take a look at the steps you will need to follow.
Step #1: Get in Touch with an Expert Bankruptcy Lawyer
If you have exhausted your savings and have taken a pension loan to pay off creditors with no success, this is an indication of when it is time to consult a bankruptcy lawyer. Ask friends and family members for recommendations. You can also consult online directories, such as the American Board of Certification.
Step #2: Figure out the Type of Bankruptcy You Should File
A specialized bankruptcy lawyer will discuss your options with you. Under the US Bankruptcy Code, you can file under Chapter 7 or Chapter 13 bankruptcy. If you are school district, town, city or municipal utility organization, you can file for Chapter 9 to reorganize.
Businesses may be required to file under Chapter 7 to liquidate their assets. This can allow them to discharge most of their debts. However, you need to decide between Chapter 7 or Chapter 11 bankruptcy, since the latter can allow business continuity and restructuring. Further, businesses considering reorganization or liquidation need to be aware of employment law risks, according to an article on Lexology. For these reasons and other complexities of your unique situation, choosing the best bankruptcy lawyer for you is essential.
Step #3: Complete Credit Counseling
It is mandatory to complete two credit counseling sessions with a counseling agency approved by the US Justice Department. The counselor will discuss your budget and explain to you the consequences of bankruptcy in detail, as well as alternatives, if any.
Step #4: Repayment and Liquidation
Based on the type of bankruptcy you file, the timeline for liquidation and repayment will differ. Within the first 15 days, you will have to submit the paperwork to the court. If you have filed for Chapter 13, you will need to make your first payment to the trustee within 30 days. Chapter 7 bankruptcy filers will need to decide whether they want to retain any secured debts.
Step #5: Complete Your Debtor Education Course
You also need to complete the debtor education course from an approved agency before your debts are discharged.
Step #6: Debt Discharge
Finally, your debts can be discharged, eliminating all your obligations to repay creditors.
Remember, this is not the end. After discharging your debt, you need to build your credit score once again to be able to achieve your future financial goals. Bankruptcy is a life-changing process, but is often one in a very positive way. Ensure the support of an experienced and skilled attorney to manage the filing.