If you are entering into bankruptcy in New Jersey, it is important to select the right type of bankruptcy proceedings based on your goals and needs. While Chapter 7 may seem attractive to many clients because it releases you from the crushing burden of most debts, parting with your assets in order to pay creditors is a disadvantage that can be hard to accept.

Our experienced New Jersey bankruptcy attorneys work with clients from all walks of life, and can help you determine which type of bankruptcy proceedings will be most beneficial under your specific circumstances.

SELECTING CHAPTER 13 BANKRUPTCY WHEN RETAINING ASSETS IS NECESSARY

When keeping your assets is a primary goal, paying creditors over an extended period of time in a Chapter 13 may be a better option than a total liquidation through a Chapter 7 filing. Debts will not typically be canceled but can be significantly reduced.

HOW CAN A NEW JERSEY CHAPTER 13 HELP WITH SECURED DEBTS AND FORECLOSURES?

Unlike a Chapter 7 bankruptcy, which discharges most debts but requires debtors to relinquish their non-exempt assets in order to satisfy creditors, a so-called “classic 13” allows debtors to pay secured debts, such as mortgages or car payments, over time and to catch up on missed payments.

For instance, in the context of a foreclosure in Clifton, $50,000 of arrearages can be paid over a 36- to 60-month plan period without interest, whereas it would otherwise be due in full, up front, in order to stop the foreclosure.

CHAPTER 13 AND UNSECURED DEBTS IN NEW JERSEY

Under a Chapter 13 bankruptcy plan in New Jersey, unsecured debts, such as medical bills, credit cards, or personal loans, may be settled by paying pennies on the dollar in full satisfaction of the total amount you owe. Instead of paying multiple creditors, you would make one monthly payment to your bankruptcy trustee, who will in turn disburse payments to your creditors.

CONSULT AN EXPERIENCED BANKRUPTCY ATTORNEY IN NEW JERSEY

Only a qualified bankruptcy attorney in New Jersey with experience guiding clients through both Chapter 7 and Chapter 13 bankruptcy proceedings can evaluate your case and help you determine which Chapter will prove most advantageous and appropriate for your needs. Not everyone is eligible to file Chapter 13. Your experienced New Jersey bankruptcy attorney can advise you regarding your eligibility, including the means test set forth by the state. For help with your bankruptcy case, please contact us by calling (973) 470-0800in New Jersey.