Contact an Experienced NJ Bankruptcy Lawyer Today If You Are Interested In Learning More About Bankruptcy Protection!

Although many people approach bankruptcy with fear and anxiety, the truth is that filing for Chapter 13 bankruptcy or filing for Chapter 7 bankruptcy can be a liberating process. The key is understanding how the process actually works, and what occurs after you have file for bankruptcy.

ADVANTAGES OF BANKRUPTCY

Let’s start with the advantages. Bankruptcy is a chance to start over when you have gotten buried under debt, and for many people this is a welcome relief. No matter which type of bankruptcy you file, a second major advantage begins immediately: no more harassing phone calls, emails or letters from collection agencies and other creditors. Also, any bankruptcy filing immediately stops the creditors’ ability to pursue a lawsuit and proceed with an action to collect money and property.

Furthermore, any bankruptcy filing may allow the following: restore utility service; eliminate all unsecured and/or secured debt; prevent auto repossession; get back auto after repossession;  stop wage garnishment; stop bank account levies; eliminating liens; reinstate drivers’ license; and, prevent evictions.  As soon as you file, your life quiets down, and you no longer have to live in fear of every trip to the mailbox.

Of course, the most important advantage is financial. In a chapter 7, no payments are required and your debt will be eliminated and discharged, within five months of the filing. A chapter 13 requires monthly trustee payments. In a chapter 13, your unsecured debt is also likely to be eliminated or substantially reduced. A chapter 13 may provide additional advantages such as:

• Saving your house from foreclosure;
• Eliminating liens from real estate;
• Possibly eliminating a second or third mortgage;
• Eliminating a portion of your tax liability;
• and more…

DISADVANTAGES OF BANKRUPTCY

What about disadvantages? Although bankruptcy can increase a person’s credit score, in most situations, a credit score is reduced. This is an important issue, but the truth is that many people assign it greater weight than it perhaps deserves. Typically, if you are in enough debt to require bankruptcy, chances are your credit score is already distressed. Also, people may not know that even with an excellent credit score, one may not be able to obtain credit due to substantial debt or a poor income to debt ratio. Filing for bankruptcy represents an opportunity to improve your credit score in the long term.

Other bankruptcy disadvantages could include purchasing a home or car in the future. Again, however, the same caveats apply – poor credit and/or poor income to debt ratio will hamper goals such as these with or without bankruptcy. Therefore, bankruptcy is often the best way to start over and clear your debt altogether. Future creditors and mortgage loan officers may even look more favorably upon someone who works at repairing one’s credit in the immediate aftermath of a bankruptcy, and in time you may find more options opening up.

Bankruptcy is not for everybody with debt and some people wish to resolve their debt matters by using debt management programs. I suggest to anyone who wishes to move in that direction, to perform the necessary due diligence with regard to the type of counseling agencies and programs that are available.

Contact a NJ Bankruptcy Attorney

Deciding about whether to file for bankruptcy is an important choice, and the best way to educate yourself is to speak with the experts. Robert Manchel Esq. has been helping clients seek brighter futures after filing for bankruptcy for many years. Please call today at (866) 503-5655 to discuss your options for seeking bankruptcy protection.