Chapter 13 bankruptcy allows individual as well as debtors engaged in business to reorganize their debts. While Chapter 13 has historically been referred to as a “wage earner’s” bankruptcy, any individual with sufficient regular income from any source may qualify for a Chapter 13 filing. Self-employed individuals may also qualify for Chapter 13 relief, and may continue to operate their businesses in Chapter 13. Incorporated entities, however, are not eligible for Chapter 13 relief.
There are certain debt limits that apply to Chapter 13 Bankruptcy, which change periodically. Currently, the Chapter 13 debt limit is $360,475 for unsecured debt, and a $1,081,400 secured debt limit. Examples of unsecured debt are credit cards, personal loans, repossession deficiencies, hospital bills, and certain old taxes. A debt is secured if a creditor has taken a security interest in collateral that you own, such as your home or your car.
A Chapter 13 bankruptcy’s term lasts between 3-5 years, and is a long-term undertaking as compared to Chapter 7. A bankruptcy discharge releases the debtor from personal obligation on their debts.
Another feature that distinguishes Chapter 13 from Chapter 7 is the requirement for the debtor to make monthly plan payments. These Chapter 13 plan payments, otherwise known as “Trustee payments”, are based on a Chapter 13 plan of reorganization that debtor’s counsel prepares, based on each client’s unique circumstances and objectives. The debtor sends his plan payments monthly to the Chapter 13 Trustee. A Trustee is responsible for administering bankruptcy cases, and one of his functions is to forward monies received from the debtor to the debtor’s creditors that are scheduled to receive payments under the Chapter 13 plan and, and which timely file a Proof of Claim with the District of New Jesey Bankruptcy Court.
The Automatic Stay, which provides immediate protection from and stops all creditor action in most cases, is imposed immediately upon the filing of any bankruptcy case. I say “in most cases”, because certain repeat filers may not be eligible to receive the benefit of the automatic stay upon filing bankruptcy (e.g., those who have had two or more bankruptcy cases dismissed within one year of the case filing). Other repeat filers may need to timely file the appropriate motion to extend the Automatic Stay past 30 days after the bankruptcy filing.
WHAT CAN NEW JERSEY CHAPTER 13 BANKRUPTCY DO FOR YOU?
- Stops the foreclosure/sheriff sale of your home and the repossession of your car.
- Reduces the payment due for undervalued cars which were purchased more than 910 days prior to the date of the bankruptcy filing.
- Stops creditor calls, wage garnishments, tax seizures, or other creditor action.
- Strips-off fully-unsecured mortgages and liens, and possibly reduce (or cram-down) under-secured mortgages on rental properties (insert link to blog post).
- Helps eliminate old tax debt, and/or helps you to get back on track with Federal, State and Local taxes, and homeowner association/condominium dues.
- Consolidates your bills. Allows you to repay some of your debt.
- Provides bankruptcy protection for individuals who may not be eligible for Chapter 7 bankruptcy relief.
- Discharge business debt for which you are personally liable (e.g., as a Direct signatory, or for which you signed a personal guarantee).
- Protects co-signors, through a Chapter 13 plan that prevents creditor actions against co-signors.
Relax. I Will Take Care Of Your Debt Problems
Once you have retained Bankruptcy Lawyer Marc P. Feldman, I will take control of your situation, file your Bankruptcy Petition and deal with your Creditors so that you don’t have to. Call Bankruptcy Attorney Marc P. Feldman at 973-267-7555 now to arrange for your FREE Chapter 7 or Chapter 13 Bankruptcy consultation.