Paying Back Debts Over Time Under Bankruptcy Protection
Although most people would rather file for bankruptcy under Chapter 7 if given the choice, Chapter 13 bankruptcy provides essentially the same protection for people who need protection against debt collection and mortgage foreclosure. The Chapter 13 discharge is also just as complete as the Chapter 7 discharge, even if it takes longer to achieve. To find out more about your options under each chapter, contact a New Jersey Chapter 13 bankruptcy attorney at Purrazzella & Purrazzella, P.A., for a free consultation in Toms River.
Toms River Consumer Bankruptcy Lawyers: Call 732-691-4589 or 888-825-9980
The most obvious difference between Chapter 13 and Chapter 7 is the need to pay off part of the unsecured indebtedness. In Chapter 13, you file your petition and schedules of assets, debts, income and expenses, and develop a plan for the repayment of debts that shows how your creditors will receive more than they would in a Chapter 7 liquidation case.
In most cases, unsecured creditors with dischargeable claims will receive a token payment over time that only rarely will exceed 15 or 20 cents on the dollar; usually, it's less. You make a payment each month into your Chapter 13 plan, and the Chapter 13 trustee pays a proportionate amount to each creditor. You have up to five years to complete performance under a Chapter 13 plan.
In the meantime, you're entitled to protection from creditor harassment and collection efforts. Bankruptcy's automatic stay goes into immediate effect. Without bankruptcy court permission, no creditor can take any steps to collect a debt, enforce a mortgage or seize your assets. Once you have completed your Chapter 13 repayment plan, you are entitled to discharge of the unpaid portion of general unsecured claims.
Most people file for Chapter 13 because their disposable income is too high to qualify for Chapter 7 relief. Some people turn to Chapter 13 because of the need to protect nonexempt assets from liquidation for the benefit of creditors. Chapter 13 can also make sense for people who need extra time to pay off past-due mortgage payments or deal with such nondischargeable debts as recent taxes or student loans.
Personalized Client Service Matched to Your Specific Needs
At Purrazzella & Purrazzella, we use our decades of bankruptcy experience to help clients figure out the best solution to difficult debt problems. Our advice is always tailored to the demands of the situation at hand. To learn how our individualized approach to debt relief can help you and your family, contact our office in Toms River for a free consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
