Understanding Bankruptcy

Imagine being unable to pay your bills. The overwhelming burden of debt crushing you each morning and night. If this scenario is your reality, it's time to take action.

Bankruptcy is an option that people take when you are no longer able to pay off your debt, business or personal, and you are searching for a way to get rid of it. It allows the debtor to receive a fresh financial start after filing. Bankruptcy can also safeguard troubled companies and offer orderly distribution to creditors through liquidation or reorganization. Depending on the type of bankruptcy you select, the swift process permits the debtor, or you, to pay your outstanding debt with your assets. This may not always be the case with certain Chapters, as there are different solutions for each form of bankruptcy. 

If you are facing financial challenges in your personal life or in your business, chances are the concept of filing bankruptcy has crossed your mind. If it has it also makes sense that you have a lot of bankruptcy questions that need answers. Many people actually cannot answer the question “what is bankruptcy” in anything except general terms.

Understanding bankruptcy and when it makes sense for you to consider filing bankruptcy is an important decision for your current circumstances, and also for your future. Bankruptcy allows individuals, burdened by overpowering debt to completely wipe out debt. One of our firm's primary practice areas is representing clients in bankruptcy cases in Chapter 7, Chapter 13 and Chapter 11 under the Bankruptcy Code.

A bankruptcy case normally commences when the debtor files a petition with the bankruptcy court. This bankruptcy petition can be filed by one person, two people, or by a corporation or other entity. The debtor must also file statements detailing their assets, liabilities, income, and addresses and names of all creditors as well as how much money they owe to each. Filing the bankruptcy petition automatically stays, or prevents, any debt collection actions against the debtor and their property. If the stay remains in effect, creditors are not permitted to bring or continue a lawsuit against the debtor, make any wage garnishments, or even make telephone calls requesting payment from debtors. 

Subsequently, creditors will be notified the debtor has officially filed a bankruptcy petition by the clerk of court. There are some bankruptcy cases filed to allow debtors to establish a novel plan to repay creditors and reorganize their debt, while other bankruptcy cases include liquidation of the debtor's property. In myriad bankruptcy cases involving liquidation of the debtor's property, there are usually little to no cash left from the debtor's estate to pay the creditors. Consequently, in these bankruptcy cases, there are a handful of disputes or issues and the debtor is habitually handed a "discharge" of the majority of their debts without objection, meaning the debtor is no longer obligated to pay their debts. 

Nonetheless, in other bankruptcy cases, certain disputes can give rise to litigation over concerns with owning property, how it should be utilized, the worth of said property, the amount owed on a debt, whether the debtor should discharged from debt, etc. In the bankruptcy court, litigation is performed in an equivalent way civil trials are tackled in the district court. 

As expert attorneys in all things bankruptcy related, we are committed to providing you the best advice for your specific situation. That starts with us listening to you and understanding what brought you to this place, then continues with us educating you about the options for debt relief and answering all your bankruptcy questions.

Many people do not realize that there are several types of bankruptcy, such as Chapter 7, Chapter 11 and Chapter 13. Each has its benefits and challenges, so knowing which is the best option for your present situation as well as your future recovery can make all the difference in your life. Here at Scura, Wigfield, Heyer, Stevens & Cammarota, LLP we handle all types of bankruptcy cases, so we are able to answer your bankruptcy questions and help you make the best decision for your case. 

Do you want to talk to a lawyer about alternatives to filing bankruptcy or tax returns and bankruptcy? Call one of our law firm's New Jersey or New York attorneys with offices conveniently located in Passaic and Hudson County. Our law firm has represented debtors, creditors, served as Chapter 13 Bankruptcy Trustee, and represented bankruptcy trustees in thousands of cases. Bankruptcy law is a specialty where extensive experience is essential, with knowledge of the courts and the law being of utmost importance.

Let us help you answer the “what is bankruptcy and what does it mean for me” question thoroughly and carefully so you can begin to see the next steps clearly.

Contact us at 973-870-0434 or schedule a FREE initial consultation today!