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When is it time to file for personal bankruptcy?

Some New Jersey consumers may have fallen into the trap of obtaining more credit cards to cover living costs. It is not uncommon for those with overwhelming credit card debt to apply for additional cards to pay the debts of existing cards, causing a spiral of debts for which not even the minimum monthly payment can be made. Although most people find it difficult to discuss their financial problems with others, this may be an ideal time to discuss potential remedies with a personal bankruptcy attorney.

Many who are struggling to pay their bills have no savings and are being threatened with eviction or foreclosure. Chapter 7 and Chapter 13 are typically the options available for individuals seeking personal bankruptcy protection, and a means test will determine the relief available. While Chapter 7 provides almost instant debt relief, Chapter 13 allows a filer to maintain ownership of assets.

Under Chapter 7, the filer's assets will be liquidated to settle existing debts. Unsecured debts may be discharged entirely. Chapter 13 allows individuals with a regular income to pay existing debts according to a court-approved payment plan over an extended time of three to five years. The court may discharge any balances at the end of this period.

A personal bankruptcy filing eliminates creditor harassment and stops wage garnishments and other debt collection actions. Filers will have to participate in debt management programs to help them from falling into credit card debt traps in the future. Consulting with an experienced bankruptcy attorney may help New Jersey consumers make informed decisions related to matters that will certainly impact on their future financial stability.

Source: wisebread.com, "5 Debt Management Questions You're Too Embarrassed to Ask", Paul Michael, May 10, 2016

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  • NACA | National Association of Consumer Advocates
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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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