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In Newark, United States, bankruptcy law is a federal legal process meant to provide a fresh financial start for individuals or businesses who are unable to pay their debts. It allows debtor to restructure, reduce, or eliminate their debts while being protected from creditors by the bankruptcy court. The bankruptcy proceedings in Newark are governed by the United States Bankruptcy Code, and are handled by the United States Bankruptcy Court, District of New Jersey.
Bankruptcy law is complex, and choosing the right type of bankruptcy to file is crucial: Chapter 7 for liquidation or Chapter 13 for debt adjustment. You may need a bankruptcy lawyer to guide you through the process ensuring you file correctly, meet all deadlines, and protect your rights. Lawyers can offer advice tailored to your financial situation, and help you navigate through the pitfalls and legal complexities of bankruptcy law.
In Newark, you’re required to complete pre-filing credit counseling and post-filing financial management courses. There are also certain exemptions that allow you to protect some property when filing for Chapter 7 bankruptcy, like your home, car, or personal belongings. These exemption amounts are set by New Jersey law. Furthermore, before getting relief under Chapter 7, you must pass a "means test" that determines if your income is low enough to qualify.
The means test examines your income and expenses to determine if you have enough disposable income to repay your debts. If your income is under the median income for a household of your size in New Jersey, you automatically pass. If it's above, you'll need to provide detailed information about your expenses and payments on secured debts.
In a bankruptcy case, a trustee is appointed to manage the debtor's estate. In a Chapter 7 case, the trustee's main role is to liquidate the debtor's non-exempt assets and distribute the proceeds to creditors. In a Chapter 13 case, the trustee oversees the debtor's repayment plan, collecting payments from the debtor and disbursing them to creditors.
Whether you can keep your home or car in bankruptcy depends on your exemptions and the type of bankruptcy you file. In Chapter 7 bankruptcy, if your home or car is exempt or there is no equity, you can usually keep them. In Chapter 13 bankruptcy, you generally keep all your property but must pay creditors the value of your non-exempt assets over the course of your repayment plan.
No, certain debts cannot be discharged in bankruptcy, such as alimony, child support, certain tax debts, debts for personal injury caused by drunk driving, and student loans, unless you can prove undue hardship.
Bankruptcy significantly impacts your credit score and it can stay on your credit report for up to 10 years for Chapter 7 and seven years for Chapter 13. However, the impact to your score decreases over time, and you can start rebuilding your credit right away.
The United States Bankruptcy Court, District of New Jersey is a valuable resource for information on bankruptcy. You might also consider the Rutgers Law School's Bankruptcy Pro Bono Project, which offers free bankruptcy advice to qualifying individuals, and the New Jersey Legal Services, offering additional free and low-cost legal help.
If you’re considering bankruptcy, the first step is to carefully assess your financial situation. It may be beneficial to consult with a bankruptcy attorney to fully understand the implications and your options. Research local attorneys experienced in bankruptcy law and schedule consultations. Be prepared to discuss your income, debts, and assets.
