During hard times, many people are faced with the decision as to what they should do when the bills are piling up and there is not enough money to pay them. The harassment from collectors may soon prove to be too much and may cause someone to begin to consider other options. Which type of bankruptcy protection is the right choice for people in New Jersey, and how will they know? There are some indicators as to whether filing for Chapter 7 may be the best option.
The Chapter 7 process is reminiscent of a business closing down shop and liquidating all of its assets. When a person files for Chapter 7, all of one's assets that are considered non-exempt will be sold. All of the money that comes from the sales will be given to the creditors to work on paying down the debt.
Filing for Chapter 7 may be a good idea for some, because it can handle the debt that has gotten out of control. It can also be a relief from the collectors when a person has exhausted all of the other options to pay down the debt. An individual's personal liability to pay most of their debts is removed if they receive a bankruptcy discharge. In this case, a portion of the debt will be considered paid when the assets are liquidated through Chapter 7 bankruptcy.
Determining whether filing for Chapter 7 is the right choice is dependent upon each person's individual situation. Each New Jersey resident should do his or her own homework on the applicable laws to make the best decision. Filing for bankruptcy can be a great way for someone to become free from the stress of creditors calling in an effort to start over again with a clean slate.
Source: Michigan State University, "Should you file bankruptcy? Part 3", William Hendrian, July 3, 2014