Bankruptcy Basics
There is no magic formula for deciding when bankruptcy is the right choice. It is an option you might consider if you:
- Are paying only minimum amounts on your bills
- Can't budget yourself out of debt within five years
- Are getting notices that your mortgage or loans are being foreclosed
- Have had a severe financial setback, such as losing your job or a major client, a divorce or a costly illness
Bankruptcy does not get rid of all debts. You are still responsible for:
- Alimony
- Child support
- Recent back taxes
- Student loans
- Recent large purchases
- Fines or penalties of government agencies
- Fraudulent debts
As a consumer, you can file for bankruptcy in New Jersey under either:
- Chapter 7 (Straight Bankruptcy) to wipe out all debts except those listed and get an immediate fresh start, or
- Chapter 13 (Wage Earner Bankruptcy) to set up a repayment plan to pay back your debts over several years' time.
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