Chapter 7 Bankruptcy Attorney in Vineland, New Jersey

Eliminating debt is a crucial step on the road toward achieving financial freedom. Chapter 7 bankruptcy is a powerful debt relief tool that allows you to get out of debt and restart your life with a clean slate. As a Chapter 7 bankruptcy attorney at The Law Office of Victor Druziako, P.C., I can help you take a first step toward a brighter future. For years, I have provided compassionate and competent legal representation to clients in Vineland, New Jersey, and throughout South Jersey. I can walk you through your debt relief options and guide you through the process of regaining financial stability.  

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, absolves a debtor from the legal obligation to repay most unsecured debts, including credit card debt, medical bills, and personal loans. However, in exchange for getting your debts discharged, your non-exempt property will have to be sold to repay your creditors.  

Many people are hesitant to file for bankruptcy under Chapter 7 because they are concerned about losing their property. However, bankruptcy law allows debtors to keep certain types of property—known as exempt property—when filing for Chapter 7 bankruptcy. Exempt property includes a portion of the equity in the primary residence and a motor vehicle up to a certain value, among other exemptions.  

When a debtor files a petition for bankruptcy, it triggers the so-called automatic stay. According to the official website of the U.S. Bankruptcy Court in the District of New Jersey, the automatic stay prohibits most collection actions against debtors and their property. 

What Debts Can Be Discharged With Chapter 7 Bankruptcy?

Filing for Chapter 7 bankruptcy can discharge unsecured debts such as:  

• Credit card debt 

• Medical bills 

• Personal loans 

• Back rent 

• Utility bills 

• Some other debts 

In addition to secured debts (backed by collateral), Chapter 7 bankruptcy cannot eliminate some other types of debt such as child and spousal support, student loans, government fines, tax liability debts, and others. You might want to discuss your specific case with a Chapter 7 bankruptcy attorney in Vineland, New Jersey, to understand which debts are secured and which ones are unsecured and can be discharged after declaring bankruptcy.  

What Is Required to File for Bankruptcy Under Chapter 7?

Not every debtor will be eligible to file for Chapter 7 bankruptcy. The eligibility requirements when filing for bankruptcy under Chapter 7 include:  

1. The average monthly income and the means test. First and foremost, a debtor must pass the means test, which is used to determine whether the debtor has enough income to repay creditors. The means test is required if your average monthly income in the previous six months is not lower than the median income for households of the same size in your state. If you fail the means test, you may still be able to file for Chapter 13 bankruptcy.  

2. Credit counseling. Every debtor must complete credit counseling from an approved non-profit credit counselor before filing a petition for Chapter 7 bankruptcy. The course must be finished within 180 days before the date a petition for bankruptcy is filed.  

While these are the two basic requirements for filing for Chapter 7 bankruptcy, the process of filing for bankruptcy is more nuanced and complicated, especially if it is your first time declaring bankruptcy. As a bankruptcy attorney at The Law Office of Victor Druziako, P.C., I can guide you through the process from start to finish to ensure that you comply with the requirements and get the results you want. 

The Potential Drawbacks of Chapter 7 Bankruptcy

Before you file a petition for bankruptcy, it is vital to consider the potential drawbacks associated with Chapter 7:  

• Liens. While filing for bankruptcy will remove your obligation to repay your creditors, most types of liens will not be affected by bankruptcy. In other words, it means that creditors may be able to make a claim on the property even after bankruptcy is filed.  

• Losing property. As discussed earlier, some of your assets may be sold as part of Chapter 7 bankruptcy to repay your creditors.  

• Impact on the credit score. Your credit score is likely to take a hit initially, which will hurt your ability to qualify for new loans. However, by practicing healthy financial habits, you can rebuild your credit score over time.  

Despite the potential drawbacks, the benefits of Chapter 7 bankruptcy cannot be overstated. The main benefit is that, if you qualify, you will receive immediate relief. Filing for Chapter 7 bankruptcy also means creditor harassment and any pending evictions, foreclosure, or repossession will stop.