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Are there common misconceptions surrounding a bankruptcy filing?

Unexpected financial situations may be hard to recover from, as two local celebrities are learning the hard way. Specifically, two cousins from Jersey City and Ramsey who co-hosted a program on HGTV have filed for bankruptcy after an unfavorable arbitrator’s ruling that left them with hundreds of thousands of unsecured debt. The arbitration involved an unhappy customer seeking damages from a renovation project.

Does a bankruptcy filing discharge unsecured debt? It depends on the type of filing. Generally speaking, debt discharge is the goal of a Chapter 7 filing, whereas a Chapter 13 involves debt restructuring and repayment over a period of time, typically between three and five years. 

The process in a Chapter 7 begins with an inventory of an individual’s debts, assets and income. Debt collection efforts by creditors must also cease at the time of the filing. After one or more bankruptcy hearings, a successful outcome will generally be notification of the debt that was discharged. A Chapter 13 plan, in contrast, may require more hearings to determine a feasible strategy. 

As a law firm that has helped many individuals struggling with debts and financial obligations, we understand that many aspects of bankruptcy law are misunderstood. In fact, we have prepared a list of frequently asked questions.

We also want to reassure individuals that a bankruptcy filing is not a sign of defeat or failure. In fact, the structure and legal protections offered by bankruptcy law have helped many to go on to greater success. Notably, federal bankruptcy law also prohibits job retaliation or termination on the basis of an employee’s bankruptcy filing.

Source: nj.com, “Bankruptcy hearings delayed for 'Kitchen Cousins' stars based out of Jersey City,” Rebecca Panico, Sept. 6, 2015 

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Goldman & Beslow, LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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