The Truth About Bankruptcy in Monmouth County, NJ

NJ Bankruptcy Attorneys

When an individual or a business is struggling financially, they may consider filing for bankruptcy. There is a truly unfortunate stigma regarding bankruptcy, where many people see it as a failure when it should be looked at as a means to start fresh. Sometimes bankruptcy is the best way for people to become financially successful in the future. There are a lot of myths surrounding bankruptcy. Detzky, Hunter & DeFillippo, LLC is here to tell you the truth. If you are struggling financially, it is important to discuss your options with an experienced bankruptcy attorney. Contact Detzky, Hunter & DeFillippo, LLC today to schedule a consultation.

Debunking the Myths of Bankruptcy

Myth #1: All bankruptcy attorneys are the same

Some people believe that bankruptcy attorneys are all the same. They believe that the fee for services and not the experience should be the principal concern because after all, one lawyer is just as competent as another.

While it is true that any licensed attorney can prepare and file a bankruptcy case, not all lawyers are bankruptcy lawyers. Mr. Detzky has been primarily engaged in bankruptcy law for nearly 40 years, in good times and bad. He is a former bankruptcy trustee and is able to look at your case with a discerning eye of a former trustee and spot any potential problems even before your case has been filed and work with you to correct them. In bankruptcy law, experience does matter.

Myth #2: Filing a bankruptcy case will involve multiple court appearances and a grueling cross-examination by my creditors.

Not at all. About 30 to 60 days after filing the bankruptcy petition, you will have to attend a 341 hearing, also known as the First Meeting of the Creditors. The bankruptcy trustee will preside over the hearing, and oversee your bankruptcy case, not a judge. At the 341 hearing, the trustee will ask you questions under oath regarding the content of your bankruptcy papers, your assets, debts and other matters. Creditors will also be permitted to ask questions, although they rarely attend and are usually limited to just a few. Of course, Mr. Detzky will appear with you at the hearing and ensure that you are treated with respect and dignity. After the 341 hearing, you normally do not need to return to court.

Myth #3: Employees or governmental agencies can discriminate against persons who file bankruptcy.

No, it is illegal for either private or governmental employers to discriminate against a person as to employment because that person has filed under Chapter 7 bankruptcy. It is also illegal for local, state or federal governmental units to discriminate against a person as to the granting of licenses (including drivers license), permits, student loans and similar grants because that person has filed under Chapter 7.

Myth #4: You will never be able to obtain a mortgage to purchase a home or get another car loan or lease if you file bankruptcy.

Not true. Most mortgage lenders will consider you for financing within two years after your bankruptcy case is closed, so long as you are otherwise qualified. Most auto lenders will grant you credit, but most likely at a higher interest rate. There is absolutely nothing in the bankruptcy laws which prohibit you from obtaining new credit after your case is concluded, either secured or unsecured.

Myth #5: If you file bankruptcy you will lose all of the money you have in your 401(K), IRA, or employer-provided pension plan.

Absolutely false. Both federal and state law protect 100% of all the funds in any pension plan, which is qualified and exempt from taxation under the Internal Revenue Code. It does not matter how much money you may have in your pension plan and whether or not you are vested.

Myth #6: A credit counselor or debt consolidation agency can reduce or eliminate your debts without the necessity of a bankruptcy.

Not always. Most credit counselors are really working for your creditors, not you. While they may be able to reduce your monthly payments or principal balance, they never can completely eliminate the debt and your creditors are under no obligation to work with them. Only bankruptcy can completely eliminate your unsecured debts and it does not require the consent or cooperation of creditors.

Myth #7: Why should I file for bankruptcy? I just lost my job, my house is in foreclosure and all I own are the clothes on my back, my car and a few dollars in the bank. After all, you cannot get blood from a stone.

If you do nothing, it will not get any better. You may not have a job now, but once you do, your creditors will be able to garnish your salary and seize and sell your car and levy on your bank accounts. By filing bankruptcy you can stop all this and may even be able to stop your mortgage arrears over a period as long as five years. It doesn’t cost anything to hear all your options from a bankruptcy lawyer with nearly 40 years of experience.

Myth #8: If I’m already in foreclosure or have been sued for collection, it’s too late to file for bankruptcy.

Absolutely false. Filing a bankruptcy case will stop all state foreclosure and collection cases. Chapter 13 may give you the opportunity to pay back your missed mortgage payments over as much as 60 months. Only an experienced and knowledgeable bankruptcy lawyer can determine if this is possible in your situation.

Myth #9: If I file for bankruptcy, all of my neighbors, friends, and family will find out.

Unless you are a celebrity or public figure, that’s highly unlikely. While it is true that a bankruptcy is a public court proceeding, it is rare that anyone other than your creditors, their attorneys and the court-appointed trustee will find out about it. There are no signs on your lawn, no one visits your home or workplace and there are so many filed that most newspapers don’t even take the time to publish them.

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