Benefits of a Chapter 13 Bankruptcy
Adjust Debt Repayment
What is A Chapter 13 Bankruptcy?
A Chapter 13 Bankruptcy is the preferable choice in many instances because it offers some specific advantages over the terms of a Chapter 7. In the state of New Jersey a person who is behind on business payments or on a mortgage can only file a Chapter 13. Filing this type of bankruptcy allows the individual to make up all of their overdue payments but they are generally spread out over time. It is possible for them to be able to reinstate the initial mortgage if they keep up with the terms of the payment plan. Usually the payment plan is set up to span 3-5 years. If you have divorce and bankruptcy related questions and you live in New Jersey you should contact a bankruptcy attorney who is also a NJ family law attorney, since laws are vary between states you want an a law firm that specializes in bankruptcies and divorce to answer all of your questions and help you incourt.
A Bankruptcy Can Be A Fresh Start
Chapter 13 Bankruptcy Versus a Chapter 7 Bankruptcy
In some cases an individual is not in a situation to be qualified to file a Chapter 7 bankruptcy. Not only is the Chapter 13 a good option for them but it may have a few advantages over filing a Chapter 7. Chapter 13 is designed to help people keep their home even though they are going through bankruptcy proceedings. Foreclosure proceedings can be stopped and delinquent mortgage payments can be caught up over time. It will be essential for an individual to keep up with the schedule payments as they come due. Part of a Chapter 13 bankruptcy is setting up an extended payment plan which will consolidate all of the individual’s debts into one payment. This can help substantially lower the overall payments that are being made and make them more reachable. All of an individual’s secured debts can be extended through the plan. The way a Chapter 13 is set up is usually better for third party involvements too, especially for consumer debts. A trustee will be appointed during the bankruptcy proceedings and the individual will have to make timely payments according to the agreement. Individuals will no longer be contacted by creditors while they are protected by the Chapter 13 bankruptcy. There are also some debts that are not allowed to be discharged in a Chapter 7 that can be covered in a Chapter 13.
Filing For a Chapter 13 Bankruptcy
The Chapter 13 bankruptcy has some distinct benefits. It is important to work closely with a bankruptcy attorney in NJ who can help sort through the variety of options which will be available. One of the big advantages with a Chapter 13 bankruptcy is that the individual can keep all of their property as long as they find the payment plan to be affordable and keep up with the payment. Even though the debts are not dischargeable under a Chapter 13 they can be consolidated and reduced so that they are much easier to manage. Garnishment proceedings and credit collection efforts must cease when the Chapter 13 is filed. The individual will be given more time to pay off the debts that are not allowed to be discharged. A Chapter 13 can be filed over again with no time constraints and an individual can file at any time they need to. Another advantage to filing a Chapter 13 is that the creditors can be classified by classes which means that the individual can have a different percentage of the payments made on the plan go to different creditors.