When an individual schedules an appointment to talk with a bankruptcy attorney in NJ they may be given several options including filing either a Chapter 7 or a Chapter 13 bankruptcy. If they have too much income they may not be able to file a Chapter 7 bankruptcy. But the Chapter 13 may be much more advantageous in some situations than the Chapter 7. There are certain situations where one option is better than the other and in many instances a Chapter 13 is preferred over a Chapter 7. InNew Jerseya Chapter 13 bankruptcy is the only available choice if you are behind on business payments or a mortgage and you still want to keep your property when the bankruptcy process is complete. When you file a Chapter 13 bankruptcy there is the unique opportunity to make up all of the overdue payments over an extended period of time and then reinstate the mortgage agreement that was originally made. Most of the time, the payment plan is developed to last for between 3 and 5 years.
What advantages does a Chapter 13 bankruptcy have over a Chapter 7 bankruptcy?
There are some instances when an individual does not meet the criteria to be able to file a Chapter 7 bankruptcy. In these cases, a Chapter 13 bankruptcy may be advantageous. Chapter 13 has better options when it comes to liquidation. A Chapter 13 also offers an individual the opportunity to be able to save their homes from being foreclosed on. By filing this type of a bankruptcy an individual can stop the foreclosure proceedings and work to redeem delinquent mortgage payments over a period of time. However the homeowner will need to keep the payments up as they come due. Another advantage that a Chapter 13 has over a Chapter 7 is that it allows an individual to reschedule their secured debts and extend them throughout the life of the plan. This may help to lower the payments. There is also a special provision which will work to protect any third parties who are liable with a debtor on consumer type debts. Chapter 13 works more like a consolidation loan through which the individual can make one payment to a trustee who is assigned during the Chapter 13 proceedings. The individual will also not have any direct contact with any creditors while they are under the protection of a Chapter 13. There are some types of debts which are not dischargeable under a Chapter 7 that can be taken care of through a Chapter 13.
What are the benefits of filing a Chapter 13 bankruptcy?
There are several benefits that are specific to the Chapter 13 bankruptcy. A bankruptcy attorney in NJ can help an individual sort through what will and will not work in their particular situation. Some of the advantages include being able to keep all of your property if you can decide on a payment plan that is affordable. Even though the debts are not discharged in a Chapter 13 bankruptcy, they can be greatly reduced so that they are more manageable. There is immediate protection from collection efforts on the part of creditors and garnishments must stop when you file for a Chapter 13 bankruptcy. With a Chapter 13 there is more time granted to pay off the debts that cannot be discharged. A chapter 13 can be filed at any time and you can file over and over as needed. In a Chapter 13 bankruptcy creditors can be separated by classes and each of the different classes receive a different percentage of the payments that are made on the plan.