What Is A Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy is known as a wage-earner’s bankruptcy or a repayment bankruptcy. In essence, a Chapter 13 bankruptcy is the repayment of debts. Now, this does not mean that it is the payment of unsecured debts; those can still be wiped out just as they can be in a Chapter 7 bankruptcy. Many people think that a Chapter 13 bankruptcy will require them to repay all of their debts, but that is not true. In many cases, a debtor will pay zero cents on the dollar for their credit card debt, medical bills, etc. There are several benefits to a Chapter 13 bankruptcy. For example, a debtor could avoid a second lien being placed on their property or decrease the interest rate on their car loan if their car is worth less than the loan. If someone is behind on their mortgage, a Chapter 13 bankruptcy will afford them the opportunity to correct that by paying the amount owed over time rather than out of pocket.
In some cases, an individual may be better served by filing for a Chapter 7 bankruptcy. For example, if someone has a high income and would have to pay a percentage of their income to creditors in a Chapter 13 bankruptcy, then a Chapter 7 bankruptcy might be a better option. This does not mean that they would have to pay the creditors in full; depending on the overall budgetary issues, they could work something else out with their creditors. If they have property that they wish to protect, then they could file the bankruptcy and pay the unprotected amount over the course of three to five years in order to keep their property.
What Is A Chapter 13 Discharge?
A Chapter 13 discharge is a discharge of financial liabilities or financial debt. It allows someone to eliminate their credit card debts, medical bills, and unsecured loans. It could also discharge other issues that are not included in a Chapter 7 bankruptcy, such as DMV surcharges, which are common in New Jersey. It also allows a person to discharge a portion of their taxes while only repaying what is required. In essence, it gives an individual a fresh start.
Which Of My Debts Are Going To Be Released By The Chapter 13 Bankruptcy?
Credit card debt, medical bills, and unsecured personal loans will be eliminated by a Chapter 13 bankruptcy. If a car loan is paid during the bankruptcy, then that could be eliminated as well.
Will I Lose My Property In A Chapter 13 Bankruptcy?
A person will not lose their property in a Chapter 13 bankruptcy unless they choose to; the idea behind filing a Chapter 13 bankruptcy is to preserve and protect properties that one wishes to keep.
Is There A Trustee In A Chapter 13 Bankruptcy?
The trustee in a Chapter 13 bankruptcy is sought out to process and administer the case, and conduct the 341 meeting of creditors. After that meeting, the Chapter 13 trustee will take the debtor’s monthly payments and ensure that the creditors get paid in accordance with the Chapter 13 plan.
For more information on Chapter 13 Bankruptcy In New Jersey, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (877) 606-1222 today.
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