Bankruptcy is intended to provide debtors with a way out of debt and fresh financial start. And while it is a quick and easy option, filing for bankruptcy might not actually be in your best interest. It depends on your individual circumstances, as well as other factors. That is why the decision to file for bankruptcy should not be taken lightly. In fact, consulting a bankruptcy attorney on the matter is a great first step. In the meantime, there are a handful of things worth considering before you move forward with a bankruptcy filing.
Dischargeable vs. Non-Dischargeable Debt
It is important to know that a bankruptcy discharge does not eliminate all of your debt. While it usually terminates your obligation to pay unsecured debt, you will still be on the hook for certain types of debt known as priority obligations or non-dischargeable debts. Some examples of debts that are not able to be discharged are child support, spousal support, newer tax debt, and student loans.
When it comes to filing for bankruptcy, there are two common types to file under: Chapter 7 or Chapter 13. The two are different and come with different advantages and one could be more beneficial to you than the other. If you are looking to protect all of your property with exemptions, have a low enough income to meet qualification requirements, and have the type of debt that bankruptcy will discharge, Chapter 7 could work well for you. On the other hand, if you have income that is too high for Chapter 7, are looking to save a house from foreclosure or vehicle from repossession, and want to pay back non-dischargeable debt through a three to five year payment plan, then Chapter 13 is most likely your best option.
Many people tend to overlook the fact that both types of bankruptcy filings have eligibility requirements. If they are not met, then you are not allowed to file under that type of bankruptcy. Chapter 7 has a means test that you must pass in order to be eligible. When it comes to Chapter 13 bankruptcy, the amount of debt you owe cannot be greater than a certain amount and you need to have enough income to support your repayment plan.
Cherry Hill Attorney Will Assess Your Bankruptcy Options
There are definitely more things worth considering when filing for bankruptcy. Again, it is important to consult an experienced bankruptcy attorney to make sure you are making the right choice. If you live in New Jersey, look no further than the Law Office of Joel R. Spivack in Cherry Hill. Not only will you be provided with help and information on bankruptcy, but you will also have access to information on alternatives to bankruptcy — basically, whatever will help get you the financial stability you need.
Fill out the online contact form today to begin discussing your options with an experienced bankruptcy attorney.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.