NJ Bankruptcy Law FAQ

What are the benefits of chapter 7 bankuptcy

Chapter 7 bankruptcy discharges all of your debts. It's the easiest and fastest way to get out of debt. 

What are the benefits of chapter 13 bankrutcy

Chapter 13 bankruptcy is a kind of repayment plan. You pay some of your debts over time such as a home mortgage loan or car loan that has gone into default while discharging some or all of your unsecured debts such as credit cards.

Will I ever be able to buy a car or a house again?

Bankruptcy will not ruin your life as the credit card companies would like you to believe. You can rebuild yur credit to average credit (680-690) within one year of your case being closed and up to 750 within two years of your case being closed. Average credit even as low as 680 will allow you to buy a car without paying a high interest rate. Home lenders require a higher credit score and It may take another year or more to build your credit to the poin of being able to buy a house (800).

How long does bankrutcy stay on my credit report?

A bankruptcy filing will stay on your credit report for up to seven years but what is more important is your credit score. The farther the bankruptcy is in the past, the less it matters.

How will bankruptcy effect my credit scores?

Most people who are considering bankruptcy already have a low credit score in the low 600s or high 500s. With a chapter 7 bankruptcy, you will be debt free in three months and you will see your score almost instantly improve by 20 or 30 points. After one year, your score should be as high as 680 or 690 which is good enough to buy a car or to get a new credit card without paying a high interest rate.

Can I rebuild my credit after bankruptcy? How long does it take?

Most people, using our simple program, can rebuild their credit within 12 to 24 months.

Will I be able to keep my car? Or, can I ger rid of my high interest high payment car loan or lease?

I find cars often can be the final straw leading to one filing for bankruptcy. Living in NJ, we all need a car to get around and back and forth to work but a car loan with a high interst rate can really tax your monthly finances. In a chapter 7 bankruptcy, you will not lose your car so long as you keep paying the monthly payment. However, this may be a good time to re-evaluate the loan or lease and turn-in the car if it is too expensive.

What about student loans?

Student loans can cause financial hardship to many but they are not dischargeable in bankruptcy. There are some other things to consider such as consolidating the loans to make the payments more affordable. Getting rid of other debt such as credit card bills may help you to be able to afford the student loan payments. If you student loans are in default, bankruptcy might be able to help you get current. 

How much does bankruptcy costs?

Considering the enormous benefit bankruptcy can offer, the legal fees to file bankruptcy are cheap. And, when you compare debt consolidation or other programs that require monthly payments to a third party firm, a one time payment that discharges all of your debt can be a real relief. See our Payment Plans here to find out exactly how much bankruptcy costs.

Do I have to appear in court?

There are no court appearances. About 30 days after your case is filed, you must attend a brief and informal meeting known as a "341 hearing" with the trustee where he or she will verify your information and ask you a few questions. The meeting is held in a meeting room and we are there with you every step of the way.

How do I get started?

Getting started is easy. There are just a couple of steps to go through to file bankruptcy. First, set up a phone appointmet with Todd Murphy who will discuss the specifics of your case and advise you which bankruptcy (or no bankrutcy) is right for you. Go Mr. Murphy's phone calendar below on this page to choose a time for a call. After the call, you will be guided through the information gathering process, and then review the petition before its filed. We do all the rest.

Do I have to miss work to meet you in your office?

We do not require an office visit to get started with bankruptcy. We will have a detailed discussion with you over the phone before we get started. 

What if I filed bankruptcy before?

If you filed a chapter 7 case within the last 8 years (calculated from the date you filed that case), then you may have to wait to file another chapter 7 case or file a chapter 13 case instead. We run a previous filing check during our initial phone call just in case you don't remember the dates.

What if I have equity in my home or cash in the bank?

Chapter 7 assumes you do not have any assets with any value that cannot be exempted. If you have equity in your home that exceeds the exemption, then you may have to file a chapter 13 case. Same for cash in the bank. If you have more cash than can be exempted, then you may have to file chapter 13. There may also be other ways to handle cash. We will discuss all of this with you in more detail on our phone call.

Will I lose my furniture and other household items?

The bankruptcy code allows for exemptions for all of the usual household items such as furniture, kitchen appliances, clothing and even jewelery.

I'm a carpenter an I have tools that I use for work. Will I lose them?

No, the bankruptcy code also has exemptions for "tools of the trade." So if you are a craftsman or even a musician, your tools or instruments will be exempted.