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BANKRUPTCY LEARNING CENTER : Learn when should you file for bankruptcy.
Main :  Chapter 7 :  Chapter 13 :  Stopping Creditors :  Foreclosure :   Life After Bankruptcy :  Alternatives
FAQS about New Jersey bankruptcy court filing forms help payments chapter 7 & 13 by licensed attorney

Bankruptcy

CHAPTER 7

If you are unable to pay your existing debts, Chapter 7 may be the answer for you. In a Chapter 7 bankruptcy you wipe out all of your debt and get a "Fresh Start." This is accomplished by liquidation. In other words, the court-appointed Chapter 7 Trustee collects all of your assets and sells those which are non-exempt under the Bankruptcy Code. The net proceeds of the liquidation are then distributed to your creditors, and the Trustee takes a commission taken for overseeing the distribution.

The one exception to the Chapter 7 liquidation is the "Reaffirmation Agreement." This gives you the flexibility to retain certain secured debts that you select, such as your house or car, by curing arrearages and signing a voluntary Reaffirmation Agreement. Once you have done so, however, you are precluded from wiping out, or discharging, that debt for another six (6) years. Execution of the Reaffirmation Agreement will document that you will still owe that debt and you are obligated to pay it just as you were obligated before you filed bankruptcy. Reaffirmation agreements can only be set aside during the first sixty (60) days after the Reaffirmation Agreement is filed with the Court, or upon the Court's issuance of an Order of Discharge.

Although the primary purpose of the Chapter 7 bankruptcy is to wipe out all of your debt, even here certain debts are non-dischargeable. These include back child support, alimony obligations and other debts incurred by family support obligations, debts for personal injury or death caused by driving while intoxicated, student loans, fines and penalties for violating the law including traffic tickets and criminal restitution, income tax debts incurred within the last three (3) years and all other tax debts, and debts you forget to list in your bankruptcy papers. Usually within six (6) weeks of filing your petition, you will be required to attend a Meeting of Creditors. The Trustee will preside, and ask any questions necessary to identify assets that must be seized, and sold, for the benefit of your creditors. Your creditors will also receive notice of the Meeting and may choose to be present.

The Chapter 7 bankruptcy is typically concluded within three (3) to six (6) months, at which time the United States Bankruptcy Court will issue a Discharge of Debtor. You are then precluded from filing for bankruptcy again for another six (6) years.

We understand that filing a Chapter 7 petition and liquidating all of your assets may be devastating. However, if you find yourself in a position where you simply cannot repay your existing debt, call our bankruptcy attorney, Maureen K. Higgins, Esq., in Westfield, New Jersey, at (908) 232-9962, or in South Orange, New Jersey, at (973) 275-1222. She will guide you through the Chapter 7 bankruptcy and get you a "fresh start."


CHAPTER 7 BANKRUPTCY ARTICLES
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