New Jersey Chapter 13 Bankruptcy Lawyer

Chapter 13 bankruptcy is often the best option for you to address your financial hardships and secure a fresh start. A Chapter 13 bankruptcy can result in the discharge of much of your debt. 

We understand that struggling with a mountain of debt can be overwhelming and stressful. Chapter 13 bankruptcy exists to provide you with a fresh start that you need. We also understand that deciding to file a Chapter 13 bankruptcy is a difficult decision to make on your own. A dedicated, experienced bankruptcy attorney can provide you with clear and effective guidance. A New Jersey Chapter 13 bankruptcy lawyer can review your financial situation with you, and advise on your options and best course of action. 

The Chapter 13 Plan

Chapter 13 bankruptcy differs from Chapter 7 bankruptcy in that the debtor is required to develop and maintain a plan of reorganization. This Chapter 13 plan typically lasts three to five years. The plan allows you to repay some of your debt, reduce some of your debt, and eliminate some of your debt altogether. A Chapter 13 plan also allows you to catch up on the arrears you may have accrued on the debts that are secured by important assets like cars or homes. 

While a debtor and their New Jersey Chapter 13 lawyer draft and submit a proposed plan to the court, a Confirmation is held by the judge who has the final say on whether this plan is accepted. Other parties, including the standing Chapter 13 Trustee, also have the opportunity to object to the plan. 

Once the plan is confirmed, you would make a single monthly payment to the Chapter 13 Trustee. The Chapter 13 Trustee then distributes the money to creditors in accordance with the terms of the plan. The percentage of each debt that must be paid will vary based on the nature of the debt. For example, debtors typically must pay the full amount on back alimony or taxes. However, unsecured debts like credit cards could end up being much less or nothing at all. 

Bankruptcy and Credit Scores

It is a common misconception that Chapter 13 bankruptcy destroys your credit score. While filing for bankruptcy could have a negative impact on your credit score, the exact impact will depend on how good your credit scores at the time of filing. Most times, if you are considering bankruptcy, your credit scores have already been damaged by late or delinquent payments, lawsuits, etc. Thus, filing bankruptcy is often the quickest and only way back to good credit for most people. Most people find that their credit score rebounds quickly after the filing of a Chapter 13 bankruptcy. 

As stated, many people who are considering bankruptcy are already in a tough situation with their credit. The risk of damage to a credit score is almost always outweighed by the relief that comes with the filing of a bankruptcy and the protection provided by the automatic stay. It is helpful to speak with a New Jersey Chapter 13 bankruptcy attorney about how filing might impact a credit score. 

Understanding Cramdowns

Many people struggling with debts are burdened by a home that is worth less than the amount of the mortgage. When this happens, selling the home is not a realistic solution to addressing the mortgage debt. In some Chapter 13 cases, where a mortgage company has taken additional collateral or the property is not a principal residence, it is possible to “cramdown” the mortgage. In a cramdown, the court orders the principle of a mortgage or other secured asset reduced to the value of the asset. This could make it possible to liquidate the asset and resolve the secured debt. 

Contact a New Jersey Chapter 13 Bankruptcy Attorney Right Away

Before you make any decisions about your financial future, it would benefit you to understand your options by scheduling a consultation with an attorney from Gillman Capone. We know that filing for bankruptcy is never an easy decision. But proper, clear, informative legal counsel will help you determine what is the best path forward for you. Allow a dedicated, experienced New Jersey Chapter 13 bankruptcy lawyer help you protect your rights during this challenging time. Call right away for a confidential consultation.