${site.data.firmName}${SEMFirmNameAlt}
East Orange: 973-677-9000
Paterson: 973-247-9445
Jersey City: 201-659-6226
Toll Free: 888-827-5493
FREE Initial
Consultation Se Habla Espanol
Go to Practice Area Categories

Bankruptcy in New Jersey: Chapter 7 versus Chapter 13

When debts have piled up to an overwhelming degree, filing for bankruptcy can offer a way out for New Jersey consumers. Some important decisions will need to be made before filing, starting with choosing from two different types of personal bankruptcy options: Chapter 7 and Chapter 13. There are some distinct differences between the two proceedings.

A Chapter 7 bankruptcy is known as a "liquidation bankruptcy," and is based on income. This type of bankruptcy plan can result in a court order for the filer to liquidate many non-exempt assets (hence its nickname). A bankruptcy lawyer can explain in detail, but examples of exempt assets include, among other things, a primary residence, a car and domestic support benefits, such as alimony or child support. The amount of each of these exemptions can vary depending upon the state in which bankruptcy is being filed. The individual may then be required to liquidate assets that are non-exempt and use the proceeds to at least partially pay off creditors; with a few exceptions, remaining debts are discharged and the individual is no longer responsible for them.

If, based on income, a filer is not eligible for Chapter 7, he or she has the option of filing for bankruptcy through Chapter 13. Instead of requiring a liquidation of assets, Chapter 13 is a repayment plan. After a filer's petition and plan to restructure his or her debt is approved by the court, some or all unsecured debts are paid off over a period of three to five years. The filer is required to pay creditors at least the same percentage of unsecured debt as he or she would have been required to under Chapter 7 bankruptcy. Just as with Chapter 7, unpaid unsecured debts (again, with some exceptions) are discharged at the end of the successfully completed repayment period.

The particulars of filing for bankruptcy in New Jersey and the differences between the types can be more fully explained by a bankruptcy lawyer. An attorney with an understanding of debt reorganization plans can help filers determine which plan would best suit their needs. With the aid of an experienced attorney, filing Chapter 7 or Chapter 13 can be the first step in preparing for a more financially stable future.

Source: 360financialliteracy.org, "What's the difference between chapter 7 and chapter 13 bankruptcy?", Accessed on Nov. 30, 2016

No Comments

Leave a comment
Comment Information

PRACTICE AREA CATEGORIES

Tell Us About Your Case

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

PROFESSIONAL ASSOCIATIONS

  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
Review Us
Goldman & Beslow, LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

FindLaw Network

qr code

EAST ORANGE
OFFICE
7 Glenwood Avenue,
Suite 311B
East Orange, NJ 07017
East Orange Law Office

Phone: 973-414-8069
Phone: 973-419-7631
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
Fax: 973-675-5886
E-mail the firm

NEWARK OFFICE 168 Bloomfield Avenue
Newark, NJ 07104
Newark Law Office

Phone: 973-483-1333
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

PATERSON OFFICE 100 Hamilton Plaza,
Suite 405
Paterson, NJ 07510
Paterson Law Office

Phone: 973-247-9445
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

JERSEY CITY OFFICE 26 Journal Square,
Suite 603
Jersey City, NJ 07306
Jersey City Law Office

Phone: 201-659-6226
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

Back to Top