Before committing to bankruptcy protection under Chapter 7 in Toms River, be sure to research the details carefully. Although Chapter 7 protection is similar to the bankruptcy that most people expect – a forgiveness of debts – there are serious ramifications attached. In addition, there are some important exceptions and caveats that not many people understand. It is important for a person who is insolvent or feels that they may soon become so, to seek the advice of a reputable bankruptcy attorney as soon as possible. There may be better options than committing to bankruptcy under Chapter 7 in Toms River.
The first thing to understand is that Chapter 7 is not necessarily a complete dismissal of debt. It mostly deals with unsecured debt, those agreements with creditors that cannot be resolved through repossession or foreclosure. If a car or a house is worth at least as much as the outstanding debt, then it is fair to the creditors to allow them to exercise their options to recover their monies through an exchange of property. However, for credit cards that have no collateral, then a default on the loan lessens or destroys the ability of the creditor to have a fair resolution for the transaction. This is the purpose of bankruptcy. From the debtor’s point of view, Chapter 7 is designed for a debtor who has a relatively high amount of unsecured debt. This is the obligation that can be forgiven. From a certain perspective, the debts he may owe on a car or a home sit outside the bankruptcy umbrella. For example, after the Chapter 7 process, the obligation for the remaining money owed on an automobile may be forgiven, but the creditor can opt to either continue the relationship, reaffirming the debt to the debtor, or he can repossess the vehicle, at his discretion. Also, certain types of debt are not forgiven by the bankruptcy process, including student loans, spouse or child support, or certain tax liabilities. These could form a significant part of the debtor’s insolvency.
This also means that Chapter 7 in Toms River protection may not be the solution one expects if he owns a car or a house that he cannot afford, but has little or no credit card debt. Regardless of the obligations the bankruptcy process could relieve, the debtor by necessity will still have to come up with enough money for living and transportation expenses. For instance, if a debtor seeks relief from a $1700 monthly mortgage payment he can’t afford in an area where rent is also approximately $1700, he will still be insolvent after the bankruptcy.
Chapter 7 Toms River – If you are seeking relief from chapter 7, contact a reputable bankruptcy lawyer at The Law Offices of Lee D. Gottesman for advice concerning Chapter 7 in Toms River today.