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Category: Bankruptcy

How to Decide if Bankruptcy is Right For You

Bankruptcy can be a helpful strategy to escape insurmountable debt. It gives those in debt a new lease on life and more control over their financial situation. Still, not all situations are created equal – though your debt may seem daunting, bankruptcy may not always be the answer. Here are some factors to consider before going through with bankruptcy:

Assess Your Situation

Take a hard look at your finances and income. In some cases, a simple budget and a solid plan can help lighten the load of seemingly unbeatable debt. It can also help to simply talk to your creditors and let them know that your financial situation has changed. Remember, they want their money, too. In some cases, they can work with you if you work with them – try to negotiate a payment arrangement or see about settlements.

Know Which Debts Will and Won’t Be Canceled

Bankruptcy can clear a substantial amount of debt, but it rarely cancels everything. Alimony, child support, and criminal restitution do not qualify for a bankruptcy discharge. If any of these are the primary reason you’re considering bankruptcy, it’s worth taking into account that they won’t be discharged and you should evaluate your financial burdens without these in mind.

Consider Your Cosigner

If you have any debts that relied on a cosigner for approval, your bankruptcy may affect their credit. Particularly with Chapter 7 bankruptcy where you’re absolved of your part of the debt, but the co-signer is still financially responsible for the entire debt.

Chapter 7 vs. Chapter 13

“Bankruptcy” is used as a blanket term, but the two most common types are Chapter 7 and Chapter 13. While both have their intricacies, they can be boiled down to the following concepts: Chapter 13 bankruptcy is basically a payment arrangement option in which you use your income to pay down debt in a set amount of time up to five years. Chapter 7, the most common, is the bankruptcy option that strives to cancel most debts altogether and help people start fresh.

Make Sure You Qualify

After deciding which bankruptcy is right for you, take the time to make sure you qualify. Both chapters 13 and 7 bankruptcies have their own set lists of requirements.

This could take into account your current income, the value of any assets you may own, and of course, the amount of debt you’re in.

Contact Our NJ Bankruptcy Attorneys

Eligibility can be the trickiest part of a bankruptcy. You may be left with all sorts of questions regarding the qualifications. We’re here to help! If you or a loved one is looking for financial relief and are considering bankruptcy, but don’t know where to start, let our experienced and knowledgeable attorneys help.

Request Your Free Bankruptcy Consultation Here!

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Can Foreclosure Be Stopped?

Picture of a stack of credit cards.

Being in debt is horrible. You spend sleepless nights trying to figure out which bills to pay and how to pay them. Meanwhile, your mortgage is in arrears and your head is filled with questions like:

  • “Will the bank take my home?”
  • “Do I have to file for bankruptcy?”
  • “Can filing for bankruptcy protection save my home from foreclosure?”

Your home is likely the biggest investment you’ve ever made. It’s the place where you and your family feel safest. But uncontrollable debt is a threat to that security.

The mortgage company wants its payments, and when a homeowner gets into significant arrears, it can be tough to avoid foreclosure. Your fears are justified, but it’s important to know you have options.

So, How Can You Stop Foreclosure and Save Your Home?

To stop the foreclosure of your home, the options include filing for Chapter 13 bankruptcy, debt negotiation/settlement, or obtaining a loan modification.

Chapter 13 Bankruptcy: Also called reorganization bankruptcy, Chapter 13 enables a person to pay back creditors in smaller amounts over a longer period of time (usually three to five years). This includes paying back mortgage arrears and getting current with your loan.

Debt Negotiation/Settlement: In a general sense, this is when you work with your creditors to reduce the total amount owed or restructure your payment plan in your favor. In theory, this is a great option, but it can negatively impact your credit score and it requires an agreement from your debtors to even do it. You’ll definitely need the help of an experienced attorney to try this route.

Loan Modification: In this program, you may be able to restructure your loan and reduce monthly payments. You may also be able to take some of your equity to pay down debt so you avoid bankruptcy.

Contact Us to Help Save Your Home from Foreclosure

You can get through these challenging financial times — we can help. At Brenner Spiller & Archer, LLP, we provide friendly, caring, and affordable legal services. We serve clients throughout central and south Jersey with offices in Collingswood, Mount Holly, Vineland, and Freehold. If you need a friendly lawyer who truly cares about you, call (856) 963-5000 today to get your free consultation.

Picture to demonstrate bankruptcy.

Debt Consolidation or Bankruptcy: Which is Better?

Debt is a frustrating beast. No one enjoys debt and losing control of it only adds to the mental (and monetary) stress. The good news is that there are two popular options to help manage overbearing repayments: debt consolidation and bankruptcy. Here’s how to tell which one will best help your situation.

What is Debt Consolidation?

When someone runs into money troubles, it often means they have several loans and bills to repay to different banks and companies, but may not have the money to fully pay them back on time.

Debt consolidation is one option for repaying these creditors. In debt consolidation, all loans and bills are lumped into one single repayment plan instead of several separate repayments.

This makes repayment easier to manage, as well as offering lower monthly payments and lower interest rates.

What is Bankruptcy?

A bankruptcy filing is another way to manage or dismiss bills and loans that are difficult to repay. Most people are offered two types of bankruptcy: Chapter 7 and Chapter 13.

In Chapter 7 bankruptcy, the person filing will have most (if not all) of their debts wiped clean and will not need to repay any of them. When someone files for Chapter 13 bankruptcy, the borrower pays back at least parts of his or her debts.

The Differences Between Debt Consolidation and Bankruptcy

Mental Strain

Debt consolidation, though reduces stress by offering one repayment each month, still leaves a constant reminder of your debts until all payments have been made. Bankruptcy can eliminate your worries with a clean slate (Chapter 7) or fewer repayments (Chapter 13).

Credit Score

Debt consolidation won’t affect your credit score, meaning if you have a low score, it will stay low. Bankruptcy, while initially lowering your credit score, can eventually increase it.

Privacy

Debt consolidation is entirely private, so friends, family and coworkers never have to know. Bankruptcy may cause your employer to find out (if your Chapter 13 plan pulls repayments from your paychecks). Bankruptcies are also publicly available, so if someone searches hard enough, they can find out.

Obtaining Credit

Debt consolidation may allow you to keep credit cards, though more purchases using credit only adds to your debt. Bankruptcy can inhibit you from obtaining credit for three to five years.

Creditor Interaction

Debt consolidation doesn’t block creditors and lenders from contacting you, asking for more or faster repayments. Bankruptcy (and an automatic stay) prohibits creditors from contacting you or shutting off utilities and repossessing vehicles.

Collateral

Debt consolidation doesn’t guarantee that lenders can’t take your home or car if you list it as collateral. Bankruptcy will prohibit lenders from collecting your house or vehicle.

Which is best for you?

Though this gives you a quick snapshot of debt consolidation and bankruptcy, to really get an idea of which is best for you, you should sit down with a lawyer and go through the details of your situation. Give us a call today to learn which path you should take.

Contact Our NJ Debt Relief Attorneys

The attorneys at Brenner Spiller & Archer, LLP provide friendly, caring, and affordable legal services. We serve clients throughout central and south Jersey with offices in Collingswood, Mount Holly, Vineland, and Freehold.

Call (856) 963-5000 Today to Get Your Free Consultation

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

3 Benefits of Chapter 7 Bankruptcy

Picture of a typewriter and paper that reads, "Bankruptcy."

Bankruptcy sometimes gets an unfair stigma attached to it. The reality is that it helps many people get out of financial trouble.

Credit card bills pile up, life circumstances suddenly change. Whatever the problem, bankruptcy gives people the chance to start over.

When you file a Chapter 7 bankruptcy, you’ll be assigned a trustee to make a record of your assets and then sell the non-exempt assets to pay off your creditors. This is why Chapter 7 is known as liquidation bankruptcy.

Here Are 3 Reasons to File Chapter 7 Bankruptcy

1) Most types of unsecured debt will be discharged, including credit card debt and medical bills.

2) If you stay current on payments and don’t have a large amount of home equity, you could keep your home and vehicles.

3) You can begin to re-establish your credit almost immediately.

Contact Our NJ Bankruptcy Lawyers

The bankruptcy lawyers at Brenner Spiller & Archer, LLP provide friendly, caring, and affordable legal services. We serve clients throughout central and south Jersey with offices in Collingswood, Mount Holly, Vineland, and Freehold.

Call 856.925.9215 Today to Get Your Free Consultation

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Why Bankruptcy Doesn’t Always Erase Student Loan Debt

Picture showing a college graduation ceremony.
Filing for bankruptcy can be a difficult and frustrating time in your life, and any obstacles can only increase stress. Our lawyers will always try to help guide you through the process, but don’t be surprised if you read that student loans may not count in your bankruptcy.

Student Loans in the US

The first US student loans were offered in 1840 at Harvard, back when annual tuition was an unbelievable $75 per year (equivalent to $2,024 in 2017). And don’t even get us started on textbooks.

Today, the debt from student loans is the second-highest in consumer after mortgage debt. Unpaid student loan debt totals $1.3 trillion in the US. Most 2016 grads in New Jersey owe an average of $28,233, below the national average of $37,172.

Student loan debt has very exponential characteristics. In the mid 1990s, average debt was $9,000 ($15,300 adjusted), $17,500 in the mid 2000s ($23,300 adjusted), and over $30,000 today. 

Congress’s 1976 Legislation

Filing for chapter 7 or chapter 13 bankruptcy can be a smart way to get your finances in order and begin to repair your credit and/or repay your debts. But today, while large debts like mortgages, medical bills, and auto loans are dismissible, student loans are often not.

This is due to legislation passed in 1976. Back in the 70s, there was concern that more students would default on their loans, so Congress passed a bill stating borrowers had to wait up to five years before being included in bankruptcy discharges (unless undue hardships could be proven).

The original bill only applied to federal student loans. Later, the timeframe was extended from five years to seven years, then was changed to remove a timeframe altogether. In 2005, lawmakers added private student loans to the bill.

When loans can be discharged

Today, student loan debt can only be dismissed during bankruptcy filing if the borrower can prove undue hardship. For example, if a borrower had been working toward a college degree, and a family member passed away with no life insurance but several dependents to take care of, the borrower could argue that having to earn for and care for the dependents can claim as an undue hardship.

Luckily, a bill was introduced in the House of Representatives that pushed to include student loans in bankruptcies. Any hard action on this bill won’t occur for a long time, but it’s a welcomed start to financial relief.

This article should not be taken as legal advice. If you’re considering bankruptcy or another legal debt relief option, you need to consult an attorney for guidance. If you’re in New Jersey and seeking legal assistance, we can help you.

Brenner Spiller & Archer, LLP is a New Jersey law firm that is dedicated to helping families find relief from the burden of debt and other financial woes. For more than 35 years, our bankruptcy lawyers have provided effective guidance on all debt relief matters to clients throughout Central and South Jersey.

Click here to schedule a free consultation with our trusted bankruptcy attorneys.

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