New Jersey Chapter 13 Bankruptcy FAQs

Chapter 13 bankruptcy is an option for people who are struggling with overwhelming debt and more particularly are behind on mortgage payments, car payments and/or need to eliminate a second or third mortgage. You can also get back your car if it was recently repossessed. In fact, there are 10-15 good reasons why to file a Chapter 13. It is a particularly valuable tool for those who may not qualify for Chapter 7 bankruptcy protection. At the New Jersey law firm of Goldman & Beslow, LLC, our lawyers can help determine whether this type of debt relief plan is right for you.

The following is designed to answer some of the most commonly asked questions people have regarding Chapter 13 bankruptcy. It is important to keep in mind that everyone's situation is different and you should always seek advice from our attorneys before taking any sort of legal action.

What is Chapter 13 bankruptcy? Chapter 13 enables you to develop an affordable plan to help consolidate and pay down your debt over a three- to five-year period, at the end of which most of your remaining debt will be discharged. This type of option can be ideal for those who would not otherwise qualify for Chapter 7 bankruptcy or for those who have a steady stream of income. It may also help you obtain a loan modification or even in certain circumstances pay off a mortgage in five years.

What does a Chapter 13 repayment plan look like? Your repayment plan will help outline how you plan to navigate your Chapter 13 bankruptcy. It will contain the monthly amount you will pay to your Chapter 13 trustee, the length of time the plan is to be in place and the amount that will be paid to each class of creditors. For example, it may state that you plan to pay off missed mortgage payments at no interest for a period of 60 months. Our lawyers can let you know what the specifics of your plan are likely to look like.

Can my repayment plan be changed? Yes. Chapter 13 allows for the unexpected, such as the loss of a job or unforeseen medical expenses. In order to modify the terms of a repayment plan, a motion must be filed with the court, and a notice and supporting evidence provided to your creditors. If there are no objections, the court is likely to approve the modified terms and you can still work toward a discharge of most of your debt.

What does it mean when debts are discharged under Chapter 13? A discharged debt is a debt that you do not have to pay. At the end of the three or five years of your repayment plan, the court will issue an order that releases you from any remaining dischargeable debt covered under your Chapter 13 filing. Creditors cannot attempt to collect these discharged debts once your case has been closed. If your Chapter 13 filing is dismissed at any point over the three- or five-year period, your debt will not be eligible for discharge under Chapter 13.

What debts will not be discharged under Chapter 13? Chapter 13 is not absolute when it comes to debt. You will still be responsible for making other payments, including spousal support, child support, most student loans, debts to creditors who were not given notice of your filing and various other types of debt.

Is Chapter 13 right for me? Everyone's financial situation is unique. Our attorneys will review your situation to determine the right option for you. If Chapter 13 is not feasible, we can help you pursue other forms of debt relief.

Contact Goldman & Beslow, LLC

Seeking debt relief protection is nothing to be ashamed of. We can help you get started on the path to a better financial future. Contact us online, or call 888-827-5493 to schedule a free one-half hour confidential consultation. With offices in East Orange, Paterson and Jersey City, we are conveniently located to help meet your needs.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.