Filing for bankruptcy can be a fresh start if you are overwhelmed by bills you cannot pay. Not knowing what to expect during the bankruptcy process can make the idea of filing very frightening which it does not need to be. With the help of the experienced and compassionate NJ Bankruptcy lawyers Bruce Levitt and Shelley Slafkes, you can usually go through the process without stress and with ease.
This blog will give you a general overview of the steps involved in a Typical Chapter 7 or Chapter 13 bankruptcy. Since everybody’s situation is different it is important to discuss your case with an experienced NJ Bankruptcy attorney.
The Nine Steps in the NJ Bankruptcy Process
There are generally nine steps in a New Jersey bankruptcy from beginning through discharge. This blog will explain what to expect during each of these 9 steps of the the New Jersey Bankruptcy process, as well as your legal options. It is important to remember that everyone’s situation is unique.
Step 1. Find an Experienced NJ Bankruptcy Lawyer
The first step in the bankruptcy process is to find a qualified NJ bankruptcy attorney. While you can certainly read about the bankruptcy process online, much of the information may be incorrect or misleading. The bankruptcy attorney will evaluate your personal financial situation, assess whether Chapter 7 or Chapter 13 is the right choice for you and guide you through the entire bankruptcy process.
Step 2. Collect Your Financial Documents
To determine whether bankruptcy is right in your situation and what type of bankruptcy (Chapter 7 or Chapter 13) to file, various documents must be collected and reviewed by the NJ bankruptcy attorney. These documents are also required to prepare the bankruptcy petition.
These important documents include:
- State and Federal Tax Returns for the past 2 years
- Proof of income for the last six months for you and your spouse. This proof includes pay stubs, proof of unemployment, pension, self-employment income
- Recent statements for each of your bank accounts
- Valuations or appraisals on all real estate that you own
- List of all your assets
- Budget information
Step 3. Take the Required Credit Counseling Course
Within 180 days before filing for Chapter 7 or Chapter 13 bankruptcy you must take a credit counseling course. The course, which can be taken online or on the phone, must be taken through a credit counseling agency that is approved by the Department of Justice. When you finish the course you will get a Certificate of Completion which must be filed with the Bankruptcy Court.
Step 4. Preparing the Chapter 7 or Chapter 13 Bankruptcy Petition
Preparing the Chapter 7 or Chapter 13 bankruptcy petition is the most complicated step in a New Jersey bankruptcy. The petition is a detailed document containing many required forms that set forth your assets, income, and outstanding debts. The bankruptcy petition asks about everything you own, earn, spend, and owe.
To prepare this document, your New Jersey bankruptcy attorney will ask you many details about your financial situation and will review the documents which you provided. At Levitt and Slafkes, P.C. we will work with you to gather all the necessary information to make sure everything contained on your petition is accurate and complete.
Step 5. Filing the Bankruptcy Petition
Once your Chapter 7 or Chapter 13 bankruptcy petition is complete and you have taken the Credit Counseling course, your petition is filed with the United States Bankruptcy Court for the District of New Jersey. Your bankruptcy case begins when a petition is filed. The current court fees for filing a Chapter 7 bankruptcy in New Jersey are $338.00 and for Chapter 13 bankruptcy the court fees total $313.00.
- Chapter 13 Repayment Plan:
If you’re filing for Chapter 13 bankruptcy, your attorney will prepare the Repayment plan that is filed with your bankruptcy petition. The Plan states how much you will have to pay to the Bankruptcy Trustee each month over the next 3 to 5 years and how it will be distributed to your creditors.
Step 6. Protection under the Automatic Stay
The minute your bankruptcy petition is filed, the automatic stay goes into effect. The automatic stay stops all collection activities including harassing and constant phone calls, wage garnishment, lawsuits, and car repossessions. During the automatic stay, your creditors are only allowed to contact your bankruptcy attorney.
Step 7. Attend the Meeting of Creditors (341 Meeting)
About a month or so after your bankruptcy is filed, you must attend a 341 meeting, also called a meeting of creditors. This meeting is run by the Bankruptcy Trustee who is appointed by the court to administer your case. All 341 meetings are held either via telephone or video conference.
The main purpose of this meeting is for the Bankruptcy Trustee to verify your identity and ask you questions under oath about your assets, income, and other information contained in your bankruptcy petition. One of the bankruptcy attorneys at Levitt and Slafkes will attend the 341 meeting with you.
Don’t worry, usually no creditors appear at the 341 meeting. It is usually a quick and painless process which usually lasts less than 15 minutes. We know it sounds scary but don’t worry, the NJ bankruptcy lawyers at Levitt and Slafkes will prepare you for this meeting. Before this meeting your bankruptcy attorney will provide required documents to the Trustee which includes your tax returns and income information.
Step 8. Complete a Debtor Education Course
In order to get the bankruptcy discharge you must take an approved debtor education course either online or on the phone. The Certificate stating that you completed the course must be filed with the Bankruptcy Court before you can get your discharge. Many of our clients tell us this course is helpful since it discusses how to create a budget, manage money and use credit wisely.
Step 9. Your Debts are Discharged
After all of this, your debts will be discharged. When a debt is discharged you are forever released from any liability on the debt. It is important to remember that you must still make your alimony and child support payments even after you get your discharge.
If you’re wondering how long the bankruptcy process takes here are some common timelines for your reference:
- Chapter 7 Discharge: About 60 days after the 341 meeting most people get their Chapter 7 bankruptcy discharge.
- Chapter 13 Discharge: If you file Chapter 13 bankruptcy, your remaining eligible debts will be discharged at the end of your payment plan if you have made all your required payments. The payment plan lasts from 3 to 5 years depending upon your situation.
Get a Fresh Start with a New Jersey Bankruptcy
After your debts are discharged in bankruptcy you will have a fresh start. Filing bankruptcy is a major life decision that must be made with seriousness and in good faith. The attorneys at Levitt & Slafkes, P.C. can help advise you on a debt relief plan that best suits your needs. We work tirelessly to provide our clients with supportive, thoughtful representation.
Contact Levitt & Slafkes, P.C., at 973-323-2953, or reach us online to schedule a free consultation on your specific situation. Find out if bankruptcy may be a way for you to get a financial fresh start.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information on this website and blogs is for general information purposes only. Nothing should be taken as legal advice for any individual case or situation.