South Jersey Bankruptcy Law Firm
Answers to Common Questions about Bankruptcy
If you face mounting debt and have considered bankruptcy as an option, you may be hesitant because you don’t understand the full consequences of a Chapter 7 or Chapter 13 filing.
This page is designed to answer commonly asked questions about bankruptcy so that you can make an initial determination as to whether you want to seek protection under the bankruptcy laws. Should you decide to pursue bankruptcy, you still want the counsel of an experienced attorney who can verify that you will get the relief you need and expect.
At Taieb Law, we have worked closely with individuals in bankruptcy and financial matters for more than 26 years. We take a thorough approach, listening carefully to the details of your specific situation, and fully analyzing your circumstances as well as your options.
Attorney Taieb is one of six attorneys in the state of New Jersey who is board certified in consumer bankruptcy law by the American Board of Certification. He is also the author of The Debt Trap: How Your Life Choices Impact on Your Financial Future, a guide to financial management for people from all walks of life.
To schedule an appointment with a skilled and compassionate bankruptcy lawyer, contact our office by e-mail or call us at 856.235.4994.
Frequently Asked Questions About Bankruptcy
Q: Will I lose everything if I discharge debts under Chapter 7?
A: No. Federal exemptions determine what property is exempt from sale in a Chapter 7 bankruptcy. Customarily, you can keep a certain amount of value in a house, a car and in other personal property.
Q: Will I permanently ruin my credit record?
A: No. In fact, many lenders consider a bankruptcy filing to be a good sign, an indication that you are trying to resolve your problems. It may be worse if you simply continue making late payments or letting loans default. Most people who file for Chapter 7 bankruptcy start receiving credit card offers within months and can even be eligible for a home loan within a couple of years.
Q: What is the difference between a Chapter 7 and a Chapter 13 bankruptcy?
A: In a Chapter 7 bankruptcy, you are allowed to permanently discharge certain unsecured debts, such as medical bills and credit card obligations, in exchange for the sale of nonexempt assets. In a Chapter 13 filing, you can work out new payment arrangements with your creditors, agreeing to repay debts over a three-to-five-year period, often for less than the full principal amount.
Q: Do I have to qualify to file a Chapter 7 bankruptcy?
A: Yes. Under the 2005 revisions to the bankruptcy laws, you must submit to a “means test,” whereby you demonstrate to the bankruptcy court that you lack the means to repay your creditors over a three-to-five-year period, in order to qualify for Chapter 7.
Q: What debts cannot be wiped out in a Chapter 7?
A: Child or spousal support arrearages, student loan payments and certain tax obligations are not eligible for discharge. Please contact Taieb Law for a list of other debts that cannot be discharged in Chapter 7 or Chapter 13 bankruptcies.