Bankruptcy Protection Solutions
When you’re having financial problems, learning your legal options and rights is the critical first step to gaining control over your situation. Often, filing for bankruptcy is the clearest path to a new financial start. Contact us today for a free consultation to determine whether bankruptcy is the right option for you.
Types of Bankruptcy
Chapter 7 – Simple 7
Chapter 7, otherwise known as liquidation, is probably the simplest and quickest bankruptcy option. Although referred to as liquidation, a Chapter 7 bankruptcy rarely results in the liquidation of any property for consumer bankruptcies in New Jersey. Most Chapter 7 cases are “no-asset”, which simply means that you do not have any non-exempt property for the trustee to sell and most people that file for a Chapter 7 bankruptcy keep everything they own. If you have property that might be at risk, we can make a determination of the right course of action to protect all your assets.
In a Chapter 7 bankruptcy, individuals can wipe out many types of unsecured debt. Unsecured debt is debt that you do not have to put up collateral for, such as a debt incurred from a credit card, or medical bills. It is important to know that not all debt is discharged under Chapter 7 bankruptcy. Mortgages typically survive bankruptcy, as do car payments. Child support, spousal support, back taxes and student loans are generally not discharged either. We can help determine the best course of action for your individual situation and get you out of debt once and for all.
Advantages for Filing Chapter 7
- There is no limit to the amount of debt you can discharge
- There is no minimum amount of debt required
- Your case is often over in 3-6 months
- Wages and property you acquire after the bankruptcy filing dates cannot be taken by creditors or the bankruptcy court
- Filing bankruptcy stops all creditor collection attempts including annoying phone calls and threatening mailings
Chapter 13 – Repayment Plan
Chapter 13 Bankruptcy can allow a debtor to protect all of their assets from creditors and establish a workable repayment plan. If you are an individual with regular monthly income, you can file a Chapter 13 bankruptcy to pay off all or part of your debts over 3 – 5 years. The amount you pay back is determined by what you can afford. Instead of wiping out debts immediately, this option allows you to reorganize them so you have time to pay.
Many people who file a Chapter 13 Bankruptcy do so to cure or catch up on missed mortgage payments. Filing a Chapter 13 stops all law suits and stops a foreclosure.
For a Chapter 13 bankruptcy, you will need a stable income with disposable income (income left over after paying regular living expenses). The limitations to qualify are that you cannot have more than $1,010,650 in secured debt and $336,900 in unsecured debt.
The filing of the Chapter 13 petition must be accompanied by a proposed re-payment plan extending over 3 – 5 years. The proposed payment plan must provide for the payment of all priority claims (taxes) in full. The Bankruptcy Trustee and Creditors have the right to object to the plan if it is unreasonable. If the plan is approved and Confirmed by the Court, then the terms of your Plan are binding on the creditors. After you complete all of the monthly payments to the bankruptcy trustee, who distributes the funds to the creditors according to the plan, then you get a discharge of all debts that you did not pay.
Advantage for Filing Chapter 13 Bankruptcy
- You keep all your exempt and non-exempt property
- You have a longer period of time to pay the debt
- Certain debt amounts can be reduced
- You have full protection against creditor’s collection efforts and wage garnishment
- You have protection against foreclosure by your mortgage lender