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What Debts Can and Cannot be Included in Your New Jersey Bankruptcy?
When you file for bankruptcy protection in New Jersey, there are certain debts that can be resolved through the bankruptcy and there are certain debts that will not go away. It is important to understand the impact that bankruptcy is going to have on the money that you owe. An experienced attorney can help you to better understand this issue.
What Debts Can be Included in a New Jersey Bankruptcy?
Debts that can be included in a New Jersey bankruptcy include:
• Medical bills and medical debt
• Personal loan debt
• Credit card debt
• Some kinds of income tax debt
The debts that can be included are generally considered “unsecured” debts. Unsecured debts are those that do not have specific collateral tied to them. For example, when you take out a credit card and charge on it, you don’t have anything guaranteeing that you’ll pay back the debt except your promise and there are no goods that you buy with the money that the credit card company has any claim to repossess.
Secured debt, on the other hand, has collateral attached to it. If you do not pay, then the asset attached to the loan can be taken by the lender. The mortgage on your house is secured debt, with the car as collateral. The car loan on your car is secured debt, with the car as collateral. These types of debts can sometimes be included in a New Jersey bankruptcy. However, you typically cannot just have debt forgiven and get to keep the asset.
If you give up the house or the car for the lender to sell and you were underwater (owed more than the asset was worth), then the extra money the bank or lender lost can usually be included in your bankruptcy. In certain limited cases when you file for a chapter 13 bankruptcy, you can keep the car but have some of the debt be reclassified as unsecured if you are underwater (owe more than the value). The same is true if you own a property- you could have second mortgage debt reclassified as unsecured if the house is not worth enough to pay off the first mortgage and have anything left over.
Knowing when and how secured debt can be included in a New Jersey bankruptcy is tricky and you should always get help from a New Jersey attorney if this is a potential issue in your case.
What Debts Cannot be Included in a New Jersey Bankruptcy?
There are also some debts that you cannot include in a New Jersey bankruptcy. For example, this can include:
• Unpaid back child support debt
• Most types of student loan debts
• Certain kinds of tax debt
• Certain types of debts from judgments against you
If you have a lot of debt that falls outside of the standard medical and credit card bills, you will need to speak with an attorney to determine if the type of debt that you have can be resolved through a bankruptcy filing.
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Debts that can be included in a New Jersey bankruptcy include:
• Medical bills and medical debt
• Personal loan debt
• Credit card debt
• Some kinds of income tax debt
The debts that can be included are generally considered “unsecured” debts. Unsecured debts are those that do not have specific collateral tied to them. For example, when you take out a credit card and charge on it, you don’t have anything guaranteeing that you’ll pay back the debt except your promise and there are no goods that you buy with the money that the credit card company has any claim to repossess.
Secured debt, on the other hand, has collateral attached to it. If you do not pay, then the asset attached to the loan can be taken by the lender. The mortgage on your house is secured debt, with the car as collateral. The car loan on your car is secured debt, with the car as collateral. These types of debts can sometimes be included in a New Jersey bankruptcy. However, you typically cannot just have debt forgiven and get to keep the asset.
If you give up the house or the car for the lender to sell and you were underwater (owed more than the asset was worth), then the extra money the bank or lender lost can usually be included in your bankruptcy. In certain limited cases when you file for a chapter 13 bankruptcy, you can keep the car but have some of the debt be reclassified as unsecured if you are underwater (owe more than the value). The same is true if you own a property- you could have second mortgage debt reclassified as unsecured if the house is not worth enough to pay off the first mortgage and have anything left over.
Knowing when and how secured debt can be included in a New Jersey bankruptcy is tricky and you should always get help from a New Jersey attorney if this is a potential issue in your case.
What Debts Cannot be Included in a New Jersey Bankruptcy?
There are also some debts that you cannot include in a New Jersey bankruptcy. For example, this can include:
• Unpaid back child support debt
• Most types of student loan debts
• Certain kinds of tax debt
• Certain types of debts from judgments against you
If you have a lot of debt that falls outside of the standard medical and credit card bills, you will need to speak with an attorney to determine if the type of debt that you have can be resolved through a bankruptcy filing.
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