Did you know that the month of April has been named Financial Literacy Month? Many people struggle with understanding certain financial areas and this month is a good time to focus on one of the more confusing areas: bankruptcy. Understanding how to deal with these difficult financial situations is something that can be very important for residents across New Jersey.

Realistically, bankruptcy as a debt-relief solution may not be the best plan for everyone, but for others, it can ease the financial struggles that people all across the country are experiencing. There are some very helpful facts that people may want to consider before making the decision to file for bankruptcy or not.

There are different options for filing for bankruptcy protection. Chapter 7 can successfully eliminate most debt, but filers are often required to sell certain assets. There are also rigid requirements that must be met to qualify for Chapter 7. There is also Chapter 13 bankruptcy protection. This option allows people to reorganize their debt and repay it over a period of time. In many cases, Chapter 13 allows people to keep their home, car and other assets.

It is also important to remember that there may be some fees that need to be paid in order to file for bankruptcy. This fine can vary depending on whether a person is filing for Chapter 7 or Chapter 13 bankruptcy. In some cases, a judge can end up waiving a filing fee for those who cannot afford it.

People who file for bankruptcy should also know that they are required to complete credit counseling and a debtor education program. These programs can give people the tools and resources that can be helpful in developing a budget, managing their money and using credit wisely. This information can be very beneficial for people so that they can avoid running into the same financial issues in the future.

There are many factors that must be considered before a person makes a decision regarding filing for bankruptcy. However, an experienced bankruptcy attorney can help people make a fresh financial start by finding the right debt-relief solution for them.

Source: myfoxphilly.com, “Know these bankruptcy facts before you file,” Andrew Housser, April 15, 2013

• Dealing with financial issues can be very difficult, especially for people who do not fully understand their options for relief. For information on how our New Jersey law firm can help people in this situation, please visit our page on personal bankruptcy.