New Jersey Chapter 13 Bankruptcy Lawyer

It is a commonly held belief that filing for bankruptcy requires surrendering all your assets, and that the sale of these assets will be used to pay off your creditors. While this is certainly true of many types of bankruptcy, United States bankruptcy laws provide some other means as well for people to avoid being hassled by creditors.

One alternate way you may be able to reduce your debts is by filing Chapter 13 bankruptcy. This procedure allows people to discharge their debts over time by making scheduled payments to creditors. In addition, this program does not require the sale of assets. However, this schedule must be approved by a court and a failure to make a payment will end the program.

Chapter 13 bankruptcy may be just what you need to get your finances back under control. A New Jersey Chapter 13 bankruptcy lawyer can work with you to determine if this path is the right one for you and help you see the plan through to completion.

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Eligibility for Chapter 13 Protection

People or corporations are only eligible for Chapter 13 bankruptcy under certain conditions. An entity’s unsecured debt must be no higher than $394,725. An unsecured debt is any debt that is not tied to property for collateral, such as credit card debt or medical bills.

In addition, an entity cannot have more than $1,184,200 worth of secured loans. Secured loans are generally those attached to some sort of property, such as a home or vehicle, as collateral. If an entity is in debt beyond this amount, they must pursue bankruptcy through other means, such as Chapter 7 of U.S. bankruptcy law.

Entities are also prohibited from filing for Chapter 13 bankruptcy if they had a prior bankruptcy dismissed for failure to appear in the previous 180 days.

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Exceptions to Chapter 13 Protection

Other than the aforementioned restrictions, entities can file for Chapter 13 bankruptcy at any time. However, even a successful plan may not discharge every type of debt. Notable exceptions include:

  • Debt from federally funded student loans
  • Home mortgage debts
  • Debts for support such as alimony or child support
  • Restitution or criminal fine payments

A New Jersey Chapter 13 bankruptcy attorney could help people understand if a Chapter 13 filing is the right one for them.

What to Expect When Filing under Chapter 13

The main goal of Chapter 13 bankruptcy is to prevent aggressive collections from creditors. To accomplish this, the court oversees a trustee who creates a payment plan that fits within the debtor’s budget. The debtor simply needs to make these payments on time for a period of three years. Completion of this requirement formally discharges qualifying debts.

However, the process of applying for Chapter 13 bankruptcy in New Jersey can be complex. It starts with the filing of a voluntary petition to declare bankruptcy in the local bankruptcy court. Along with this form, filing parties must provide information concerning their outstanding debts, current income, assets, and liabilities.

Any mistake in this filing could cause the bankruptcy to fail and may prevent a filing in the future. However, a Chapter 13 bankruptcy lawyer in New Jersey could work to prevent this from happening.

New Jersey Chapter 13 Bankruptcy Lawyer

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Talk to a New Jersey Chapter 13 Bankruptcy Attorney Today

The decision to file for Chapter 13 bankruptcy is rarely an easy one. Even when successful, the proceedings are long and complex, and the resulting bankruptcy often negatively affects the filer’s credit. Still, this could be a necessary step for people to escape from certain unmanageable debts.

A New Jersey Chapter 13 bankruptcy attorney could help you to determine if this is the best option for you, gather all the necessary information, and submit it to the court on your behalf. Working together, attorneys and clients could come to the best possible outcome. Contact an attorney today to discuss your case.

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