Bergen County, NJ Bankruptcy Lawyer
THE FOLLOWING INFORMATION IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE RELIED UPON. INDIVIDUAL CIRCUMSTANCES VARY, LAWS CHANGE, IF YOU ARE CONSIDERING BANKRUPTCY, YOU NEED TO CONSULT AN EXPERIENCED BANKRUPTCY ATTORNEY WHO CAN EVALUATE YOUR INDIVIDUAL FINANCIAL CIRCUMSTANCES.
FREQUENTLY ASKED QUESTIONS
By Individuals Considering Bankruptcy
Q: CAN BANKRUPTCY FILING STOP LAWSUITS AND FORECLOSURE?
A: Yes upon the filing of the petition in bankruptcy all other legal proceedings including foreclosure are stopped.
Q: WILL THE FILING OF A BANKRUPTCY STOP A WAGE GARNISHMENT?
A: Yes in most cases, there are exceptions.
Q: WILL I HAVE TO GIVE UP MY PENSION OR RETIREMENT BENEFITS?
A: 401K, retirement and pension plans are generally protected in bankruptcy. This means you get to keep your pension benefits/retirement plan.
Q: WHATS DEBTS ARE NOT WIPED OUT IN BANKRUPTCY?
A: Student loans, child support, alimony and certain motor vehicle and criminal penalties. Also, generally taxes, but there are limited exceptions.
Q: IF I FILE BANKRUPTCY, WILL I LOSE MY HOUSE?
A: Not necessarily. The answer depends upon your financial circumstances and the nature of the bankruptcy chapter under which you file. Chapter 13 Bankruptcy filings are designed to allow an individual or family who has sufficient income to pay their current mortgage obligation, to catch up on past due mortgage payments.
Q: I OWE MONEY ON MY CAR, IF I FILE BANKRUPTCY, DO I HAVE TO GIVE UP MY CAR?
A: Not necessarily. Generally the choice is yours as to whether you want to keep the car or give the car back. If you want to keep your car, you must continue to make your lease or loan payments. If you wish to give up the car you can surrender the car and wipe out the balance of any financial obligation owed on the car.
Q: ARE THERE INCOME LIMITS WHICH PREVENT SOME PEOPLE FROM FILING FOR BANKRUPTCY?
A: No, effective October 17, 2005 the bankruptcy code was amended to impose maximum income limitations on most individuals when filing for Chapter 7 bankruptcy relief. The formula to determine whether or not an individual qualifies for Chapter 7 bankruptcy relief, is generally known as the "means test". The means test is a complicated formula which is best left to an experienced bankruptcy attorney. On the other hand, Chapter 13 bankruptcy filing is not limited by income, but does require the individual to have regular periodic income.
Q: HOW DOES FILING BANKRUPTCY AFFECT MY FUTURE CREDIT?
A: Filing a bankruptcy can remain on your credit history for up to 10 years. Filing bankruptcy has an adverse impact on your credit score. However, individuals who file bankruptcy generally have or anticipate that, they will, in the future, have credit problems which have or will adversely impact their credit score. Filing for bankruptcy should be viewed as the means to an end to improve your credit by giving you a fresh start.
Q: WILL I BE ABLE TO OBTAIN CREDIT AFTER I EMERGE FROM BANKRUPTCY?
A: Yes, but you will have to work to rebuild your credit worthiness. You can start by obtaining a secured credit card and building a history of on time payments. After bankruptcy, credit will be more expensive. I have had clients who have reestablished good credit within two years after bankruptcy.
Q: I HAVE HEARD THAT THERE ARE DIFFERENT TYPES OF BANKRUPTCY PROCEDINGS AVAILABLE TO CONSUMERS?
A: Yes there are. Generally, for individuals, the primary bankruptcy proceedings are a Chapter 7 or Chapter 13 filing. Though there are other types of proceedings as well, depending upon your circumstance. Chapter 7 bankruptcy is referred to as "straight" bankruptcy. It generally lasts 6 months from the date of filing to the date of discharge or completion. Chapter 13 bankruptcy, generally lasts 3 to 5 years, and requires monthly payments by the individual to the bankruptcy court. Different individual circumstances will dictate which bankruptcy proceeding is best for your individual financial circumstances.
Q: I HAVE SEEN AND HEARD ADVERTISEMENTS FOR COMPANIES THAT ADVERTISE THAT THEY CAN REDUCE MY CREDIT CARD DEBT, ARE THEY SUCCESSFUL?
A: Based on the experience of my clients, they are not. You have to be careful in distinguishing between "not for profit", no fee, credit counseling services and "for profit", pay up front, credit reduction or consolidation companies. Not for profit credit counseling agencies are useful for individuals who need to get a handle on their financial situation. For profit debt settlement companies, in my experience, take your money and do not deliver on results and you are left worse off (i.e. poorer) than before starting with them.
Q: DOES THE BANKRUPTCY COURT HAVE THE POWER TO REDUCE MY MORTGAGE?
A: No, not your first mortgage. Yes, under certain circumstances with regard to the second or subsequent mortgages or home equity loans.
Q: WHAT ABOUT MORTGAGE MODIFICATION COMPANIES, ARE THEY SUCCESSFUL?
A: Here to you also have to distinguish between government run or government sponsored programs and "for profit" pay up front companies. Both federal and state officials have instituted suit against and allege that there are many scammers who are seeking to take advantage of borrowers in danger of foreclosure by charging them upfront fees of $1,000 to $3,000 for help with loan modifications, that rarely, if ever payoff.
Q: HOW DO I CHOOSE AN ATTORNEY TO REPRESENT ME IN BANKRUPTCY?
A: Experience counts. While every person's financial circumstances are unique to their situation, the more bankruptcy filings you handle, the more experienced you become. I have been a practicing attorney for 27 years. There are different types of bankruptcy attorneys. Some bankruptcy attorneys primarily represent credit card companies, banks, mortgage companies and collection agencies. Other attorneys primarily represent large businesses and corporations. Individuals, families and small businesses need an attorney who primarily represents consumers. The only organization I know of composed of attorneys who primarily represent individuals and small businesses is the National Association of Consumer Bankruptcy Attorneys (NACBA). NACBA is a national organization dedicated to serving the needs of consumer debtors in bankruptcy. Membership in NACBA indicates a dedication to representing, protecting and advancing the rights of consumer debtors in bankruptcy. I am a member of NACBA.
The Law Office of Russell S. Warren, Jr., Esq. is a debt relief agency, helping people file for bankruptcy relief under the bankruptcy code.
Contact Us for a Free Phone or Office Consultation
To schedule a free consultation by phone or at our Englewood Cliffs office, contact us by e-mail or call 201-503-0773.