Chapter 13 - Bankruptcy

Chapter 13 is the alternate choice for individuals who can not file a Chapter 7 personal Bankruptcy petition in New Jersey.  Chapter 13 is used when either the individual does not qualify under the Bankruptcy rules for a Chapter 7 or it would be in their best interests to not file a Chapter 7.  Your NJ Bankruptcy attorney will work with you to customize a chapter 13 plan that is in your best interest and that is in compliance with the Bankruptcy rules. 

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A Chapter 13 plan will require monthly payments and they will last between 3 to 5 years.     Depending on the Chapter 13 payment plan, the individual debtor can catch up with back payments they  might owe.  Typical examples of this is a person paying their back or arrear payments on their home or automobile.   Thus, the individual is protecting assets they want to keep.  A Home or Automobile is considered a secured asset in that you pledge the asset itself as collateral if you fail to make the payments.       

 

Another situation that a Chapter 13 Plan would deal with would be paying off unsecured debt.  Examples of Unsecured debt are credit cards, medical bills, etc.  Unsecured debt does not have any physical item like a home or car to pledge if it is not paid.   Generally speaking, Chapter 13 protects secured assets and allows the  individual to catch up on back payments while paying as little as possible on unsecured debts.                                                                                       
 

Generally speaking, Chapter 13 is a good choice when you have secured assets to protect from repossession.  The individual debtor can adjust or modify the loans on their property, such as the interest rate on a car loan or getting rid of junior mortgages on some secured debt like their home.  Call today to get the advice and guidance of an experienced NJ Bankruptcy attorney.