New Jersey Bankruptcy Law Blog

What are credit counseling sessions?

One of the first steps to discharging your debts through a Chapter 13 bankruptcy and making a fresh financial start is to go through credit counseling. By law, you must complete two rounds of credit counseling for your bankruptcy process to be valid. A failure to complete either one could result in your New Jersey bankruptcy judge throwing your case out.

As Nerdwallet explains, your first session of credit counseling takes place before you file for bankruptcy. The session is intended to give you the rundown of the pros and cons of filing bankruptcy. The session will also educate you on alternative means of handling debt other than bankruptcy, though in reality by this point many people who take the credit counseling session are very likely to go ahead and declare bankruptcy.

How can I recover after filing for bankruptcy?

If you’ve recently filed for bankruptcy in New Jersey, you may be fearful about your financial future. While it’s true that bankruptcy can have an impact on your finances, it is possible to recover and get your life back on track. U.S. News & World Report offer the following information in this case, which will help you rebuild your credit and savings once again.

Think about what led you to bankruptcy

Balancing bankruptcy and divorce together

Money is one thing that many marital arguments in New Jersey have been about. In some cases, financial troubles or radically differing approaches to money management and spending can even lead a couple to end their marriage. When spouses with serious financial problems make this choice, they may also be evaluating whether or not to file for bankruptcy. Certainly, a bankruptcy can help provide someone with a path to a better financial future but when it coincides with a divorce, care should be taken to proceed at the right time.

As explained by My Horizon Today, some couples may wish to file a joint bankruptcy prior to filing for their divorce. This may well simplify the debt and even asset division portion of their divorce settlement and give them a clean slate both financially and from a relationship perspective once their divorce is final. However, it does require that couples are able to cooperate sufficiently to provide the necessary financial details and agree on things in the process. This may not be a viable option for a couple in a highly contentious situation.

File for bankruptcy or take another path for debt relief?

Many New Jersey families are currently stuck between rocks and hard places regarding finances. The cost of living is high and everyday expenses may be difficult to meet if anything out of the ordinary occurs to throw things off-track. For instance, if you or your loved one needs surgery or if one of the income earners in your household loses a job, it might be enough to tip the financial scales out of balance.

Such problems are often temporary, so there's no need to panic; however, your ability to rectify the situation may hinge upon your knowledge of various debt relief options, such as bankruptcy, as well as on state laws governing such matters.

Don't panic: You can prepare for bankruptcy

When financial trouble hits, the way you react will likely impact your ability (or inability) to find a solution and get things back on track. Like many other people throughout the nation, some New Jersey residents may tend to panic, feel overwhelmed or helpless, and suffer much anxiety worrying about losing their homes or having to battle creditors who are harassing them by phone.  

If you have walked in similar shoes, you know that it isn't always easy to keep a positive attitude when you're having trouble paying your bills or simply making ends meet at home. Bankruptcy is often a viable solution in serious financial crisis situations. However, even the word itself makes some people nervous. If you're considering filing for bankruptcy, you'll be glad to know there is much you can do to prepare.  

How is medical debt handled differently?

All it takes is one medical emergency and you get buried in medical debt from New Jersey hospital and doctor bills. If you are concerned about your credit, this could be a big blow. However, according to Consumer Reports, medical debt is not treated exactly the same as other debt you may incur.

The first difference is that it is not immediately reported. With a debt such as a credit card, the company is reporting regularly about your payment or nonpayment. That does not happen with a medical bill. It is only reported after it is not paid, and even then, it is not reported until it goes to a collection agency. Regulations also mandate that you are given 180 days after it is reported to the credit bureau before it is actually put on your credit report. This gives you extra time to pay it or clear up insurance mishaps related to it.

What are the advantages of filing Chapter 13?

When your New Jersey business is struggling financially, you may decide that it is time to file bankruptcy. The most common option for businesses is Chapter 13. It is important before you file that you understand how this form of bankruptcy works. That includes knowing what your responsibilities will be once you have filed. According to US Courts, fulfilling your obligations under the plan you create is essential to getting your case closed and coming out of bankruptcy. If you fulfill your obligations, there are many benefits you will reap.

First, you get to consolidate your debts into one payment. This can make it much easier for you to budget the payment. It also is much easier to ensure you make the payment on time because it is often taken out of your payroll.

Can I stop my car from being repossessed?

If you get a loan to buy your car in New Jersey and you fail to make your loan payment, then you could face having your car repossessed. It is ideal for you and your lender to avoid this situation. You would lose your vehicle, while the lender would end up with a car instead of the money it really wants. Furthermore, you would still be liable to pay off the loan even though you no longer have anything to show for it.

Avoiding repossession can be done legally, which means you do not do anything underhanded, such as hiding the vehicle, which would only lead to more trouble for you. According to Nerdwallet, the one thing you should do is talk to your lender before you miss a payment. You may be able to work something out. Make sure you know how much you can pay and when you can pay it, so you can offer something. It is not likely your lender will just let you skip the payment completely, unless you have been a stellar customer to this point. You also need to know whether this will be a one-time thing ro if you need a solution for the long term.

When should I file for Chapter 7?

It is probably not difficult to determine when you are having money troubles and issues with debt, but for many people, making that final decision to file bankruptcy in New Jersey can be difficult. It can be hard to know at what exact point your debts have gotten to be so much that the only answer is going to the court and filing.

According to Money Crashers, choosing to file bankruptcy is an important decision that should be made carefully due to the impact it can have on your life. Before filing, it is always a smart idea to look at your other options. This could mean downsizing your life to free up more money to pay debts or getting another job to earn more money to pay debts. In addition, you should identify why you are in this situation. If you can catch up and get a handle on your debts, then it is by far much better to do that than to file bankruptcy.

What will happen if I cannot pay my credit card payment?

It is not uncommon to find yourself drowning in credit card debt. It is very easy to use credit cards when you do not have the money for unexpected or emergency costs in New Jersey. However, once you find yourself in a situation where you can no longer afford to make your credit card payments, things have gotten out of control. It is a good idea to find a way to get a handle on the situation before it gets worse.

According to Discover, if you know you cannot make a payment on time, the first thing to do is contact your creditor. You can discuss the situation and get assistance. Your creditor might be able to help you by reducing the payment due or changing the due date. You may also be able to negotiate of late fees and even interest rates.

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