New Jersey Bankruptcy Law Blog

The emotional benefits of debt relief

Many people realize that filing for bankruptcy can be incredibly helpful from a financial point of view. After all, getting rid of debt that has been preventing one from pursuing their entrepreneurial goals or interfering with business operations can be very beneficial. However, there are many other ways in which someone's life may turn around as a result of seeking debt relief. For example, someone may feel free and experience a number of emotional benefits after getting rid of debt that has been holding them back for many years. Across New Jersey, many people have enjoyed a fresh start after working their way through the bankruptcy process.

A significant amount of debt may lead to unbearable stress and it can even cause some people to become short-tempered or depressed. By getting rid of these financial burdens, some people feel excited to take on new opportunities in life and happy about their circumstances. Depression may be transformed into elation and people may finally be able to sleep well during the night. The emotional perks of getting rid of debt can also lead to other successes in life, such as improving one's performance in the workplace and leading to lucrative opportunities.

Understanding the differences between Chapter 7 and Chapter 13

If you're currently trying to figure out how to overcome serious financial problems, you're definitely not alone in your struggle. Many New Jersey residents are facing similar situations. The good news is that there are often multiple options available to help you get your financial life back on track. In fact, some options may not only provide a means for immediate debt relief, but may help you lay the groundwork for a stronger financial future.

Sometimes, people need a way to wipe the slate clean and start fresh. However, it can be difficult to know what path to choose if you aren't really aware of what types of debt solutions are available in your particular situation. For this reason, it often helps to speak with someone who is well versed in the laws that govern such matters. You may be eligible for several different debt relief plans; which one you choose may greatly influence your financial status down the line.

What happens when you miss a credit card payment?

Financial problems can come up easily. Almost everyone in New Jersey could one day struggle with paying all their bills. It is not uncommon to miss a credit card payment because other bills often take priority. Even if you simply forgot to make the payment, it can be a huge issue. If you forget, you can easily make the payment and probably call your credit card company to fix the issue. However, if the case is that you cannot make the payment, then you should be ready for what may happen.

According to Credit Karma, the first thing that happens when you miss a credit card payment is a late fee. The credit card company will immediately apply a late charge for every billing period you miss. This, along with the interest, will keep pushing your amount due up. As you fail to make payments, your minimum amount due will rise.

How is the payment figured in Chapter 13?

The biggest difference between Chapter 7 and Chapter 13 bankruptcy is that in Chapter 13 you repay your debts based on the bankruptcy plan. If you file Chapter 13 in New Kersey, you may wonder how the court creates the repayment plan. There are a few considerations the court makes when developing your plan to ensure fairness to your creditors and to you.

To begin with, according to the U.S. Courts, the court uses your disposable income to figure Chapter 13 payments. This is basically the income you need to support your family. If you own a business, it includes basic operating expenses as well. The court uses your income for the past six months to come up with your average monthly income. It will not include Social Security payments, child support or some personal injury settlement payments.

Can a business file Chapter 7?

Running a business can be very difficult. Whether you are just starting out or have a large company, sometimes all it takes in a downturn in sales to cause financial trouble. Recently, the news has been filled with huge, national companies filing bankruptcy due to low sales. Keeping a business afloat can be a hard job requiring a lot of work, but in some cases, no matter how hard you work, your business still may face bankruptcy. Accoridng to the United States Courts, you have two general options: Chapter 7 or Chapter 13.

Chapter 13 bankruptcy allows you to keep your business open. You create a repayment plan to repay creditors according to your income. If you file chapter 7, though, you will not be able to keep your business open. This is often referred to as liquidation because the court will take and sell all of your business assets to get money to pay your creditors. Chapter 13 is more common because it does allow you to continue operations, but Chapter 7 may end up being the best option.

What are some foreclosure scams to watch for?

If you struggle with debt, you may face a time when your house goes into foreclosure. One missed payment can start the process. In New Jersey, your foreclosure is made public, which means you become subject to scammers who want to try to take advantage of you. According to, you may come across foreclosure scams in advertisements or through direct contact. These scams involve making big promises but delivering nothing.

The approach may vary for each scam. They may promise you assistance in saving your home if you pay them money. Some may offer legal help even though they are not an attorney. They may say they can assist with filing bankruptcy and even have you sign documents. They may seem convincing because they prey on your vulnerability and your desire to save your home.

Is bankruptcy a viable solution to your current financial crisis?

Have you ever noticed that your financial status changes along with the ever-changing events of your daily life? While the mainstream of your finances may stay the same, such as earning the same income at the same job for many years, circumstances surrounding your day-to-day situation may change, thus causing economic changes, which you may or may not be prepared to handle.  

If you're one of many New Jersey residents who are currently struggling due to medical expenses or credit card debt that arose because you needed car repairs or faced some other unforeseen cost that you lacked the funds to cover, you may be trying to determine a best course of action for paying down your current debt and getting your overall financial plan back on track.  

What are recent trends that are adding to personal debt?

If you are looking to exert tighter control over your expenses, it is a good idea to watch out for the latest trends in American spending that are adding to people’s personal debts.  In its yearly analysis of household debt for the United States, Nerdwallet discovered Americans wrestled with a number of particular expenses in the year 2018. These expenses generally outpaced the median income of Americans and are something New Jersey residents should watch out for.

First off, many Americans are still facing the specter of higher medical costs. Since the year 2008, medical expenses have risen faster than the rate of median income. Unfortunately, medical expenses are not easy to control. Purchasing treatment, drugs or other forms of care is often critical to preserving health or is even needed to save one’s life. Even with health insurance, costs may not fall enough to make an appreciable difference. Some people are even stuck with thousands of dollars in debt.

What are some foreclosure scams to watch for?

If you are facing foreclosure on your home in New Jersey, you have a lot more to worry about than losing your home. There are scammers out there who prey on people like you. They make big offers and in the end, only manage to steal your money, leaving you in sometimes worse shape than before. According to, these scammers gather your information from public foreclosure postings. They may contact you directly in many cases, pretending to be a professional who can help you avoid foreclosure.

They may say they can mediate your case with the lender or that they can give you legal help. They always offer help of some kind, saying they will prevent the foreclosure, but you have to pay them money for their assistance. You may also find these scams advertised online, through flyers or in local publications.

What are some myths about asset loss in bankruptcy?

When you decide to file bankruptcy in New Jersey, you may not completely understand how the process works. The most confusion often comes from what will happen with your assets. Many people mistakenly believe they will lose everything. However, bankruptcy is not meant to hurt you. It is not a punishment. The goal is to help you start fresh and get control over your finances again. To do that, you need to have some assets at your disposal.

According to Nerdwallet, you will not lose all your assets in a bankruptcy. You do get to keep assets that you need to carry on. The state gives you exemptions, which are assets you may keep. They are typically limited in value, but enough so you can continue on your day to day activities. They include keeping a place to live and a vehicle to drive.

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