Bankruptcy is a fantastic tool for many people who find themselves unable to pay off certain debts. That being said, there are various myths and misinformation surrounding bankruptcy, and our firm is here to set the record straight in our New Jersey Bankruptcy Guide. Please continue reading and contact an experienced Bergen County bankruptcy lawyer here at the Law Office of Boyd & Squitieri to learn more about bankruptcy in NJ and how our legal team can assist you through it.
The New Jersey Bankruptcy Guide
Some of the most common bankruptcy-related questions that our firm receives are as follows:
What is the difference between Chapter 7 & Chapter 13 bankruptcy?
Chapter 13 and Chapter 7 bankruptcy are the most common types of bankruptcy for individuals. Chapter 7 bankruptcy gives many people the ability to discharge all or most of their debts. In most cases, Chapter 7 bankruptcy is ideal for someone with limited income who cannot pay off their debts, even with a reorganized payment plan.
On the other hand, Chapter 13 bankruptcy allows an individual to keep his or her property in exchange for completing a court-mandated 3-or-5-year repayment plan. The right type of bankruptcy for you depends largely on your specific financial situation. Our firm can analyze your circumstances and determine the best path forward.
Is filing for bankruptcy private?
To start, you should understand that filing for bankruptcy does, in fact, become part of the public record. That being said, typically, you need not worry about outside parties knowing about your filing for bankruptcy. In most cases, the only parties who will know are you, your lawyer, your creditor, and the bankruptcy court.
Will filing for bankruptcy affect my credit?
In short, yes, bankruptcy will most likely affect your credit. In fact, filing for Chapter 7 bankruptcy stays on your credit report for 10 years, while filing for Chapter 13 bankruptcy stays on your credit report for 7 years. However, you should note that there are several actions you can take to quickly improve your credit after filing for bankruptcy, making it far less of a burden than you may have imagined. The bottom line is that though bankruptcy will affect your credit, as long as you are responsible and do what you need to do from there on out, you can, and most likely will, bounce back fairly quickly. Our firm can advise you of your options going forward.
What debts will I still have to pay if I file for bankruptcy?
Though bankruptcy is incredibly useful for countless individuals throughout the country, you should understand that there are still several non-dischargeable debts, or debts that cannot be wiped away by filing for bankruptcy. These can include student loans, child/spousal support payments, and all debts you’ve incurred due to “willful and reckless acts,” such as being convicted of a crime.
Can filing for bankruptcy hurt my spouse?
Fortunately, if your spouse did not co-sign or guarantee payment of your debt, filing for bankruptcy will not affect your spouse. That said, credit reporting agencies started including “additional cardholder” accounts on people’s credit cards several years ago. This can result in situations where it’s not a joint or guaranteed account, but one spouse’s bankruptcy still shows up on the credit report of the other spouse because they were an “additional cardholder.” This is why we often recommend checking the credit report for any “additional cardholder” accounts and canceling the card for the “additional cardholder” before filing for bankruptcy. This prevents the bankruptcy filing from “bleeding” over to the report of the non-debtor spouse.
Contact a Bergen County Bankruptcy Lawyer
If you have any further questions that were not addressed in our New Jersey Bankruptcy Guide, please do not hesitate to contact the Law Office of Boyd & Squitieri today. Our firm is prepared to help you in any way we can.