Chapter 13 Bankruptcy Attorneys in New Jersey
People who face overwhelming debt may need to consider the process of filing for bankruptcy. Bankruptcy is a powerful tool to right one’s financial ship. Chapter 13 bankruptcy, also known as wage earner’s plan, can help a person with regular income develop a repayment plan over 3 or 5 years. Compared with Chapter 7 bankruptcy, Chapter 13 has a few advantages, including saving one’s home, rescheduling secured debts, extending them over the course of the repayment plan, and acting as a consolidation loan. In addition, filing for bankruptcy also puts an automatic stay on creditors’ pursuit of debt, allowing the filer some room to breathe as they get back on track while making payments to the trustee. With over 20 years of experience, Underwood & Micklin has the skill and experience to guide clients through the Chapter 13 bankruptcy process. If you need a helping hand from a knowledgeable and effective attorney, contact Underwood & Micklin.
Am I eligible to file for Chapter 13?
Even if a person is self-employed or operates an unincorporated business, one is eligible for Chapter 13 if the individual’s secured debts and unsecured debts are less than the capped amount. It is important to note that this changes constantly with the consumer price index. If another petition was dismissed within 180 days, a person cannot file for Chapter 13. A prerequisite of filing for bankruptcy is the need for the filer to first get credit counseling within 180 days before the filing, though there are some exceptions.
Starting the process
After you establish your eligibility and satisfy the prerequisites, you must start the process by filing a petition for bankruptcy. At this time, you should be prepared with documents that may include:
- A list of liabilities, assets, and property
- A statement of financial affairs
- A list of executory contracts and unexpired leases
- Proof of credit counseling and any plan developed to handle the matter
- Income payments within 60 days prior to filing
- Monthly net income and any indications of a rise in income and expenditures
- Interests the debtor has in state or federally-qualified education or tuition accounts
When you successfully file for bankruptcy an automatic stay goes into effect. This bars creditors from pursuing your debt. If your home is in foreclosure, it will stop the process and allow you some time to work things out and possibly save it. Unless an extension is granted by the court, the debtor should file a repayment plan within 14 days of the petition.
Meeting of creditors
A few weeks after the filing, a trustee will hold a Meeting of Creditors, also called a 341(a) hearing. This is where the trustee, any creditors who wish to attend, you and your attorney meet to discuss your financial situation. To paint a clear picture of the matter at hand, the trustee and the creditors will ask questions on a limited basis. Once outstanding issues are resolved, parties can discuss a repayment plan.
Chapter 13 plan confirmation
When filing a petition for bankruptcy, you should have already filed a repayment plan that, hopefully, satisfies creditors and the bankruptcy court. The repayment plan will detail a schedule of payments to be made to the trustee who will then distribute the money to creditors. The judge should decide on the matter within 45 days of the 341(a) hearing. If confirmed, payments should start within 30 days after filing.
Chapter 13 discharge
A debtor will be responsible for paying a certain percentage of what is owed. Once the repayment plan is complete, most unsecured debts are discharged, or wiped clean. Some nondischargeable debts include:
- Long term obligations (such as a home mortgage),
- Spousal Maintenance
- Child support
- Certain taxes
- Student loans
- Damages from personal injury cases involving DUIs or the influence of drugs
- Debts arising from criminal matters
A hardship discharge is to address when a debtor faces unforeseen circumstances that prevent them from completing the plan. A hardship discharge may be granted to an individual if:
- Circumstances were out of the debtor’s control
- Creditors received as much as they would through Chapter 7
- Modification to the plan is not practical
The standard one needs to meet to convince the court is quite high. It is important to have quality legal support during the process.
Contact a South Jersey Chapter 13 bankruptcy attorney
Underwood & Micklin effectively represents clients facing bankruptcy in South Jersey and all of New Jersey. Our firm understands the stress one can feel when facing a bleak financial future. Our compassionate staff will work to ease your fears and help you make a new start. If you need quality legal support, contact Underwood & Micklin.