If you find yourself overwhelmed with debt and the collection processes have already started whether it be through wage garnishments or through judgments, it’s very important to consider whether bankruptcy is for you. There are a lot of factors that must be taken into consideration when thinking about filing for bankruptcy because in the event that you do file for one of the types of bankruptcy, the decision will impact you for many years to come.
One of the things bankruptcy will do is stay all the collection processes against you and discharge the debts that you owe. When you have these debts, it’s important to consider bankruptcy with your attorney and find out your particular circumstances and determine whether a Chapter 7 or a Chapter 13 is a viable option for you.
Chapter 7 bankruptcy is the simplest and most common form of bankruptcy that people opt for. Chapter 7 is the option that people take when they want to simply walk away from all of their debts because they know they will not be able to repay them. The creditors turn your assets into cash as a means to repay any of the debts that you may owe until your debts have been paid off.
The other option is filing for Chapter 13 bankruptcy. This is sometimes also known as a wage earner’s plan. In order to be eligible for this type of bankruptcy, one must have no other bankruptcy petitions that have been denied within the last 180 days. In addition, they must not have over $1,1491525 of secured debts or $383,175 in unsecured debts. One of the major benefits of Chapter 13 as opposed to Chapter 7 is that those who choose this option don’t have to give up their house to the creditors. The house no longer has to go into foreclosure. However, it is valuable to know that mortgage payments still have to be paid. They
Juan C. Velasco, Esq. is a trusted attorney who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.