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New Jersey Chapter 13 Bankruptcy Lawyer

A growing number of individuals across the U.S. are filing for bankruptcy each year.  More and more Americans are struggling with medical debt, credit card debt, mortgages, and other financial issues.  There were over 770,000 bankruptcy filings in federal courts across the country in 2018.  The economic impact of the COVID-19 coronavirus pandemic has only added to the financial woes faced by hundreds of thousands of people across the country.  Bankruptcy may be the best mechanism for finding financial relief and starting over on the right foot.

If you are an individual struggling with debt, bankruptcy may be the right option for you.  Consult with an experienced and effective debt relief attorney at Lance Brown & Associates to learn about your options for obtaining financial relief and security.  Individuals in the U.S. primarily file for bankruptcy under either Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code.  You can learn about Chapter 13 bankruptcy below.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also called a “wage earner’s plan,” allows an individual with regular income to develop a plan to repay part or all of their debts over time.  Without selling assets to pay off debt, Chapter 13 gives the individual debtor a format for finding relief from creditors, relaxing deadlines in order to establish a repayment plan over the next three or five years.  No property needs to be collected and sold off as a part of a Chapter 13 bankruptcy.  Instead, the debtor, the bankruptcy trustee, the creditors, and the court will work out a plan under which the debtor will repay as much of the debt as practicable over a set period of years, and any remaining qualifying debts will be discharged.

During the period of the Chapter 13 plan, covered creditors cannot engage in any collection efforts.  They cannot garnish wages, seek repossession or foreclosure on property, or otherwise go outside of the repayment plan for debt collection.  The length of the plan will depend upon the debtor’s income and ability to repay the covered debt.

Am I Eligible for Chapter 13?

To qualify for Chapter 13 bankruptcy, a debtor must meet a certain income threshold, and their level of applicable debt must not exceed a specific maximum limit.  Currently, an individual may be eligible for Chapter 13 bankruptcy so long as their unsecured debts are less than $39,735, and their secured debts are less than $1,184,200.  The debtor must have a “regular source of income” and have at least some disposable income to apply toward the Chapter 13 repayment plan.  Some additional specific requirements and disqualifiers may apply depending on your finances and your circumstances.  Speak with a seasoned bankruptcy attorney to discuss your eligibility.

Advantages of Chapter 13

Chapter 13 bankruptcy has a variety of advantages over other debt-relief options.  Chief among them, Chapter 13 allows debtors to stall or stop foreclosure on their homes.  Filing for Chapter 13 will automatically stop any foreclosure proceedings, giving the debtor additional time to catch up on their mortgage payments.  Other debts can also be rescheduled and extended for the life of the Chapter 13 plan.  Unlike Chapter 7 bankruptcy, Chapter 13 does not involve a trustee potentially collecting assets for sale to pay off debt.

Chapter 13 also involves placing a bankruptcy trustee as an intermediary between the debtor and creditors–payments go to the trustee, who then distributes them among the creditors in accordance with the repayment plan.  This approach offers the advantage of limiting direct contact between the debtor and the creditors, preventing harassing phone calls and other communications, and easing the stress of repayment.

Is Chapter 13 Right for Me?

Chapter 13 offers a variety of advantages, as discussed above.  However, it is only available and advisable when the debtor has sufficient income to keep up with the monthly payments under the plan.  If the debtor does not have a steady income or the debts are so high that keeping up with monthly payments (on top of a mortgage) would create more financial hardship, then Chapter 7 might be more appropriate.  If the debtor qualifies for Chapter 7 bankruptcy, all of their qualifying unsecured debts will be discharged, wiping the slate clean for financial recovery.  Whether Chapter 7, Chapter 13, or some other form of debt relief is the best choice for you, depends on your specific circumstances.  Discuss your financial situation with a knowledgeable bankruptcy attorney to learn about your options for debt relief and which may be best for you and your family.

Speak With a Seasoned New Jersey Bankruptcy Lawyer to Discuss Your Options for Debt Relief

If you are dealing with serious financial troubles, don’t wait until the creditors are banging down your door, and don’t torture yourself with sleepless nights filled with worry and anxiety.  Call Lance Brown & Associates at 609-587-5100 to find real solutions and useful, lasting debt relief.

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