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Bankruptcy: Chapter 13 Reorganization

Chapter 13 Bankruptcy Lawyers New Jersey

160239732Since 1997 our New Jersey bankruptcy attorneys have been assisting individuals in Chapter 13 reorganization cases.

Chapter 13 bankruptcy is a reorganization available only to individuals.  The typical Chapter 13 candidate has an important or valuable asset, such as a home, that is not completely covered by exemptions and that they wish to keep. The most common reason for debtors filing Chapter 13 is to stop foreclosure proceedings and save their home.

In Chapter 13 a debtor proposes a plan to repay creditors over a three to five year period during which the debtor can make up overdue payments on any assets and pay into the plan the equivalent value of any assets not covered by exemptions. Since the debtors plan will require regular monthly or biweekly payments, Chapter 13 is usually only appropriate for an individual debtor who has a regular source of income.

At a confirmation hearing, the court either approves or disapproves the plan, depending on whether the plan meets the Bankruptcy Code’s requirements for confirmation.  Chapter 13 is very different from chapter 7, since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor’s anticipated income over the life of the plan.  Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received.  While the Chapter 13 plan is in effect the debtor is protected from lawsuits, garnishments, and other creditor action.

Find out if you qualify for Chapter 13 by filling out our online bankruptcy questionnaire right from your computer, or contact our bankruptcy attorneys today to schedule an appointment.

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