With much of the U.S. economy in question, many are wondering what their bankruptcy options might be going forward. Chapter 13 bankruptcy is one bankruptcy option. One of the biggest advantages of a Chapter 13 bankruptcy is that it puts a stop on any current foreclosure filings. If you are finding it difficult to make your mortgage payments, it might be an option for you.
What Is a Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also referred to as a wage earner’s plan, is a type of debt relief plan that allows individuals to consolidate their debts and make one single debt payment each month. The benefits of a Chapter 13 bankruptcy include:
- Easier to track debt payments
- Frees up income to repay important debts, like mortgages
- Give you the opportunity to begin rebuilding your credit
- Saves homeowners from foreclosure
Chapter 13 is a type of repayment that reorganizes debt. It does not remove debt.
How Does a Chapter 13 Work?
Once approved for Chapter 13 bankruptcy, you will work with your petitioner to create a repayment plan. This is based on:
- Who your debtors are and how much you owe them
- Source of your income
- Your properties owned
- Your current living expenses
The petitioner will also take your tax situation into account when determining a realistic repayment plan. You will then take your repayment plan in front of a judge, who will determine the fairness of the plan. It can be useful to work with an experienced bankruptcy lawyer when creating this plan.
Do I Qualify for Chapter 13 Bankruptcy?
Individuals must meet certain requirements to be eligible for a Chapter 13 bankruptcy:
- You must have less than $394,725 in unsecured debt
- You must have less than $1,184,200 in secured debt
- You must be able to demonstrate that you have income that can be used to pay debt
- You must be current with tax filings
Not everyone will be approved for a Chapter 13 bankruptcy. If you are unsure whether or not you meet the eligibility requirements, it can be useful to discuss your details with a bankruptcy lawyer. The law also requires that all mortgage payments are made on time going forward into the plan. Failing to do so can end the plan, putting you at risk of foreclosure.
How Do I File a Chapter 13 Bankruptcy?
If you believe that a Chapter 13 bankruptcy is right for your financial situation, then you will want to take the following steps:
- Discuss your case with a bankruptcy lawyer
- Determine your eligibility requirements
- Create a repayment plan
- File your petition with your local federal district
New Jersey residents can file their petition at the Clerk of the Bankruptcy Court, located in Camden, NJ. Upon receiving your documents, your case will be assigned to a bankruptcy judge. The process of filing for Bankruptcy 13 and creating a repayment plan that will be granted by the judge is not always easy. But, working with a bankruptcy lawyer can ensure that you meet all due dates and that your petition includes all of the necessary information, increasing your chances that it will be accepted on the first.
Contact a Ringwood Bankruptcy Attorney for a Consultation About Chapter 13 Bankruptcy in New Jersey Today
If you are struggling with debt, you may need a fresh start financially. An experienced bankruptcy and debt relief attorney can help you explore your options and determine the best course of action for you, your family, and/or your business, whether that is Chapter 13 or another bankruptcy option. The experienced New Jersey bankruptcy lawyers at Silverman & Roedel, LLC understand the nuances of New Jersey and federal bankruptcy laws, so we can help you protect your interests. Call us anytime at (973) 772-6411 or fill out the online contact form to schedule a confidential consultation. We have an office conveniently located at 1187 Main Avenue, Suite 2C, Clifton, NJ 07011.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.