Personal Bankruptcy Law

From stopping harrassing phone calls to appearing in court in NJ and NY, Carl Beckwith will represent you in all phases of handling your personal bankruptcy. Without question, some of the most emotionally-charged issues in all of law are created by debt problems. Are you having legal problems with credit cards, foreclosure, medical bills, lawsuits?  Carl Beckwith focuses on bankruptcy protection for individuals and families, so he can guide you through your issues with care and efficiency.  A more detailed overview of bankruptcy is set forth below.

What is Bankrutpcy?

Bankruptcy is a process of dealing with your debts.  Filing bankruptcy means filing papers with the U.S. Bankruptcy Court.  In these papers you list all your assets (what you own) and all your debts (who you owe money to and how much).

Kinds of Bankruptcy

There are two kinds of bankruptcy that are available for most individuals or couples- Chapter 7 or Chapter 13. (if your debts are really large there is also Chapter 11 but we are not discussing that here).  Which chapter is the right one depends on a number of issues, including your income, the amount and types of your debt, whether you own a home, the value of the home, whether you are current on mortgage payments or car payments, and what you want to happen with your property.

Chapter 7

In a Chapter 7 you generally wipe out your credit card, medical, and other personal debts and keep your property that is exempt (the value is under the limits allowed by the court).  By filing bankruptcy, you stop wage garnishments and other lawsuits.  If there is property that is not exempt (this is pretty rare), the trustee ( the person appointed by the court to oversee your case), has the right to sell the property and pay back to the creditors what is left over after the costs and fees of sale.

Chapter 13

In a Chapter 13 you pay back a percentage of your debts over a 3 to 5 year period.  A lot of different factors determine how much you have to pay back, including your income, the value of your property, and the type of debts.  Chapter 13 is most often used by people who own a home that they want to keep and are behind on their mortgage payments.  In the Chapter 13 plan, they make regular mortgage payments directly to the bank just as though they had not filed bankruptcy, and make payments to the trustee to catch up on the missed payments or arrears.

How Do I File and What Happens?

Before filing, each person must take a credit counseling course, either online or by telephone.  A certificate is issued proving you attended the course and it is filed with the bankruptcy petition.  About 30 days after the papers are filed, there is a hearing in an office room managed by the trustee.  At this hearing, also called a "meeting of creditors" because creditors can attend but almost never do, you are sworn under oath and asked questions about your financial affairs.  You must bring your social security card and government issued photo id to the hearing. Basically, the trustee wants to see you and determine if you have told the truth about everything you have stated in the petition.  If all goes properly, at the end of the hearing you are usually done with the proceedings.  Sometimes the trustee may ask you to supply more documentation.

Usually, the hardest part about filing is getting all your papers in order.  You have to get tax returns, pay stubs, mortgage statements, credit card bills, bank statements, copies of deeds and mortgages and values of your real estate.  Once you get all this together, the rest is pretty much up to us.  When you have completed your bankruptcy proceeding and taken another education course, if everything is approved, you will receive a "Discharge" of your debts.  This is a paper that says you are free and clear of the unsecured debts listed in your petition and creditors cannot come after you for them.

What Happens to Secured Debts?

If you buy a house or car and use a bank to help pay the purchase price, you give them a lien on the property.  A lien is right that the lender has to take back the property you have given as security to assure them you will pay.  On real estate this lien  is called a mortgage and if you don't pay the mortgage the lender can foreclose and try to get the real estate back.  With a car or other personal property, if you don't make your payments the lender may try taking back the property by suing you.

Whether you file bankruptcy or not, you have to keep making regular mortgage payments or car payments to keep the property.  In some cases the loans on personal property or cars can be reduced to the value of the property.  On a personal residence, in a Chapter 13, if the house is worth no more than the first mortgage, you may be able to "strip" or eliminate or reduce a second mortgage or home equity line, depending on the case.

What Happens after I file Bankruptcy?

Generally, a huge cloud lifts off your head.  A cloud of fear, frustration, anger, sadness.  You will be able to open your mail again and answer the phone without it being a bill collector.  You will often be able to get credit again, though you may think long and hard about doing so since you will not be able to wipe out your debts in bankruptcy again for many years.  You will start fresh, with a clean slate and in control of your financial life once again.

Do you have questions about our services?

Contact Carl Beckwith at 201-338-2833 or via our contact form.