Chapter 7

Chapter 7 2017-10-06T18:41:14+00:00

A Law Firm Helping with Chapter 7 Liquidation for Individuals and Businesses in Newton, Warren, and Sussex Counties

Giving you a fresh start by wiping away your debt

When your debt has reached a point where there is little realistic hope of you ever being able to pay it back, Chapter 7 bankruptcy may offer the relief you need by stopping collection activities and discharging most of what you owe. Chapter 7, however, does not work for everyone, because not everyone qualifies and some types of debt are not dischargeable. Moreover, Chapter 7 is not without its downsides, but if used appropriately, it can give you a new lease on your financial life. Our attorneys at Hollander, Strelzik, Pasculli, Hinkes, Wojcik, Gacquin, Vandenberg & Hontz, L.L.C. understand how difficult and stressful it is to deal with debt. As a client, you can expect us to thoroughly review your case, answer your questions and work diligently to bring you through the process and address any concerns you may have.

How Chapter 7 works

After filing for bankruptcy under Chapter 7, you must turn over all your nonexempt property to a bankruptcy trustee to be sold to pay your creditors. However, most people do not realize that a great deal of their property may actually be exempt from this liquidation. New Jersey allows petitioners to choose between the exemptions created by federal law and those existing under state law. In most cases, the federal exemptions are more generous:

  • $3,675 of equity in a vehicle
  • $22,975 of equity in your home
  • $1,550 worth of jewelry
  • $12,250 in household items
  • $2,300 in professional tools and books
  • $22,975 in personal injury proceeds
  • Tax-exempt retirement accounts
  • A $1,225 wildcard exemption and up to $11,500 of your unused homestead exemption

If you successfully complete the bankruptcy process, the court discharges your nonexempt debt. However, if much of your debt is not dischargeable, Chapter 13 bankruptcy may actually be a better option. Debts that cannot be discharged include:

  • Most mortgages and other secured debt
  • Many tax debts
  • Domestic support obligations
  • Homeowners’ Association (HOA) or co-op fees
  • Fines and penalties
  • Most student loans
  • Personal injury judgments for driving under the influence (DUI)

Who qualifies for Chapter 7?

The principal qualification for people seeking Chapter 7 relief is the ability to pass the means test — a test designed to prevent abuse of the bankruptcy process. If your current monthly income is less than the median monthly income for similar households in your state, you qualify. If not, the court looks at your monthly disposable income — your gross income minus certain allowed expenses. If your monthly disposable income exceeds either $10,950 or 25 percent of your unsecured debt, you may not qualify for Chapter 7. Our attorneys can review your case in advance to determine if the means test might be a problem for you and, if so, we can help you understand your alternatives.

Contact a Sussex County firm that can guide you through liquidation

Our bankruptcy attorneys at Hollander, Strelzik, Pasculli, Hinkes, Wojcik, Gacquin, Vandenberg & Hontz, L.L.C. help you fully evaluate your financial situation and walk you through every step of the bankruptcy process. Call us today at 973-383-3233 or contact us online to schedule a consultation with one of our bankruptcy lawyers. Our office is located on the square in Newton.

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