Frequently Asked Questions About Bankruptcy

Filing bankruptcy can be a confusing process. There are many rules to follow and the laws keep changing. A qualified, experienced bankruptcy attorney is your best resource for up-to-date answers tailored to your individual needs.

At the law offices of Albert L. Lancellotti, LLC, we can help you protect your rights and secure your financial future. Contact us by e-mail or by phone at 1-877-273-7300 to schedule a free initial consultation. Learning more about bankruptcy and other debt elimination options can lead you toward a fresh start.

Common Questions About Bankruptcy

Q: What is bankruptcy?

A: Bankruptcy is a federal court process designed to help individuals and families eliminate their debts or repay them under the protection of the bankruptcy court.

Q: What is a Chapter 7 bankruptcy?

A: Chapter 7 bankruptcy is sometimes known as liquidation. If you have assets that aren't exempt under state law, they are turned over to a bankruptcy trustee. The trustee sells your property to pay your creditors. Then, your debts are discharged (eliminated) and you are free of your obligation to pay. You can discharge credit card debt, medical bills, and other unsecured debt like payday loans.

Q: How do I get a Chapter 7 bankruptcy?

A: You must be eligible under the "means test", which is a test to determine your level of income. If your income is too high you are considered able to pay back your debts without filing Chapter 7. Also, you will not be eligible if you have recently filed for Chapter 7.

Q: What is a Chapter 13 bankruptcy?

A: Chapter 13 bankruptcy can also be called "wage earner" bankruptcy because filing involves a repayment plan. You need to have a reliable source of income to file for Chapter 13. You will be making structured payments toward your debt for three to five years, after which the remaining debt is discharged.

Q: How do I get a Chapter 13 bankruptcy?

A: Your amount of debt needs to be within the limit set by the federal government. These limits are currently $1,010, 650 in secured debt and $336,900 in unsecured debt.

Secured debts are supported by collateral. These debts include home mortgages, car loans and tax liens.

Unsecured debts have no collateral toward their payment. These debts include credit card debts, medical bills, and personal loans.

Q: My wages are being garnished. Can I make it stop?

A: Bankruptcy can stop or prevent wage garnishment. After you file a bankruptcy petition, your attorney sends a Notification of Stay to your creditors. This automatically stops actions taken against you.

Q: Can I get rid of back taxes through bankruptcy?

You can eliminate federal tax debt under Chapter 7 if the following are true:

• The taxes you owe are income taxes.
• You did not commit tax fraud or willful tax evasion.
• Your tax debt is at least three years old.
• You filed a tax return debt you want to eliminate at least two years before filing for Chapter 7 bankruptcy.
• Your income tax debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition, or must not have been assessed yet.

Q: I keep getting calls at home from my creditors. Will bankruptcy make it stop?

A: Yes. The law says that your creditors cannot continue to harass you after you file a petition for bankruptcy.

For more information on bankruptcy or to schedule an appointment, contact us today for aggressive advocacy with a personalized approach and modest rates. We'll help you make a fresh start.

Albert L. Lancellotti, LLC

Newark Office
17 Academy Street, Suite 707
Newark, NJ 07102
Telephone: 973-273-9880
Fax: 973-273-9838

Passaic County Office
130 Skyline Drive
Ringwood, NJ 07456
Toll-Free: 1-877-273-7300

Albert L. Lancellotti, LLC has offices in Newark, New Jersey and Ringwood, New Jersey and serves clients throughout Bergen County, Essex County, Hudson County, Middlesex County, Monmouth County, Passaic County, Sussex County, and Union County, including Newark, NJ, Elizabeth, NJ, and Morristown, NJ, and throughout Jersey City.