New Jersey Chapter 7 Bankruptcy
Filing for bankruptcy can difficult and stressful. As opposed to Chapter 13 bankruptcy, Chapter 7 bankruptcy allows you to start fresh by wiping away debts owed. Chapter 7 bankruptcy can best be described as a liquidation. A trustee will collect and sell any non-exempt assets. The proceeds of these sales are paid to creditors, while the debtor is paid any amount exempted. The trustee will also take a commission.
Debts such as student loans, certain taxes, alimony, fraudulent debts, and child support are unable to be discharged in a Chapter 7 bankruptcy. It is very common in a Chapter 7 case for the debtor to have few assets, but large debt or unsecured bills. The result is that Chapter 7 bankruptcy is not always able to eliminate all debt.
It is possible to reaffirm remaining debts to be able to keep certain secured debts such as your house or car. You must sign a reaffirmation agreement in order to keep the secured debts. You cannot bankrupt that debt again for eight years, should you decide to keep those items and reaffirm your debt. You must continue to pay back that debt as you were obligated to before filing for bankruptcy. You must pay any outstanding back payments in order to reaffirm the debt. You have the option of being selective when you choose to reaffirm your debt. For example, you can choose to keep your house, but you may elect for your car to go to the respective creditor.
Reaffirmation agreements can be set aside during the earlier of 60 days after the agreement is filed with the Court, or upon the Court’s issuance of an Order of Discharge.