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Some advantages of Chapter 13 bankruptcy in New Jersey

Residents of New Jersey struggling to pay their debts may not be aware that there are different types of bankruptcy. One type of bankruptcy filing, Chapter 13, is sometimes referred to as a wage earner's plan, and may offer hope for potential filers who did not meet the income eligibility requirements to file for Chapter 7 bankruptcy. Chapter 13 works as a debt reorganization plan, allowing individuals with a regular income to keep their property and assets and pay their debts over time.

Under Chapter 13 bankruptcy, filers propose a repayment plan to the court, usually over a time span of three to five years, depending upon income. As long as the secured and unsecured debts fall within the eligibility requirements, anyone is able to file for Chapter 13 relief, even if he or she is operating an unincorporated business or is self-employed. This provides the opportunity for filers to stop foreclosure proceedings and save their home. Of course, Chapter 13 filers must still make all mortgage payments on time during the Chapter 13 plan outline.

With the court's approval, individuals are able to reschedule secured debts over the length of the Chapter 13 plan, which may lower payments. Chapter 13 also acts like a consolidation loan, meaning that filers under Chapter 13 protection are spared having any direct contact with creditors. Plan payments are made directly to the Chapter 13 trustee, who is then in charge of distributing the payments to the creditors.

Chapter 13 additionally has a special provision to help protect third parties and co-signers who may be responsible alongside the filer for consumer debts. For individuals in New Jersey who are drowning in debt but are not eligible to file for other types of bankruptcy, Chapter 13 may offer a light at the end of the tunnel. Anyone struggling with overwhelming financial burdens may benefit from contacting an experienced bankruptcy lawyer who can offer guidance and counsel on taking this first step toward a brighter financial future.

Source: uscourts.gov, "Chapter 13 - Bankruptcy Basics", Accessed on Feb. 21, 2017

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  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
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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.

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