New Jersey personal bankruptcy includes debt discharge

| Sep 3, 2013 | Personal Bankruptcy |

The good news for readers in New Jersey and elsewhere is that the amount that most families owe in overall debt has fallen in recent years. The height of credit card debt came in 2008 when American owed some $1 trillion. However, the number of people who have found that they are unable to repay their credit card debts has risen, leading some to file for a personal bankruptcy when they cant pay what they owe.

According to a report that may be of interest to those of us in New Jersey, people owe an average of $15,325 on credit cards in our country. In addition, the average mortgage debt is $147,924. Those with student loans owe an average of $32,041.

Traditionally mortgage and student loan debts are unable to be discharged in a personal bankruptcy. However, those rules may be changing, the report notes. That is indicated by recent court decisions allowing some individuals to discharge their student loan debts.

Credit card debt is one that can most often be discharged in a personal bankruptcy. In such cases, the person seeking the protections of the bankruptcy discloses the creditor and the amount owed. Then, depending on the chapter of the Bankruptcy Code used in the case, the trustee first determines if the creditor is able to be repaid any of what is owed. Once that is completed, and the process ends, the person in New Jersey who decided to file for a personal bankruptcy is able to restart their financial lives, often free from the debts that had held them back previously.

Source: dailyfinance.com, Credit Card Debt: Falling, But Still Very High, Palash Ghosh, Aug. 21, 2013