What You Need To Know About Filing Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is not for everyone. The fact is that some individuals will be better served filing a Chapter 11 however, there are some key points where Chapter 7 may be more suitable for you. If you are being harassed by creditors, by and large, the most beneficial part of filing a Chapter 7 Bankruptcy is the stay. Creditors will be required to cease collection calls and letters. In addition, the final discharge itself will help you begin to restore your credit. If you are a homeowner or own a motor vehicle, you may be concerned about how the filing will affect your property.
What Happens To My House After Filing?
In the normal course of business, if you can’t pay your mortgage, you may be able to apply for a forbearance but in many cases, this is not an option. So what happens when you can no longer keep up with your mortgage payments and stop paying. The home itself is the collateral for the mortgage. In the case of a motor vehicle, the same is true, the vehicle itself is the collateral.
Foreclosures and Repossessions
Under normal circumstances, the bank would begin a foreclosure proceeding to retain ownership of the home (your collateral for the loan). When you signed your mortgage and note, you promised to pay the mortgage according to the agreements in the note. Failure to make those payments puts you at risk of losing your home to the bank. Like a mortgage, a vehicle loan or car note works in the same manner, if you stop paying your car loan, you are at risk of repossession.
Filing A Chapter 7
A Chapter 7 allows for breathing room with a restructured payment that makes your expenses more affordable to manage and maintain during times of hardship:
- You monthly payment may be reduced making it easier to make your monthly payment obligation;
- Your home is a necessity and your car allows you to get to and from work to support your family obligations;
- You are able to maintain the new monthly payments as well as meet your monthly obligations to your family and home.
Discharging Some Debt
Filing a Chapter 7 may allow you to have some debt relief by discharging some heavier debt that has created pressure and hardship on you and your family while allowing you to keep your car and home.
Are your home and car mortgage and loan-free?
The fact that you own the property outright means that your property can be at risk if you owe debt however, there are ways to protect your personal property through the use of asset exemptions. When you file a bankruptcy you will list all of the property you own (assets) as well as your debts. A Bankruptcy Exemption may allow you to keep your property. Because this area of the law can be confusing, it is best to speak to an experienced New Jersey Bankruptcy Attorney.
Get New Jersey Bankruptcy Help Today
Contact me to learn more about how I can help you. Filing a bankruptcy can create a fresh start, get more information about how a bankruptcy can help.