Representing New Jersey individuals through bankruptcy laws
When a person faces a terrible financial state, they may have to take action to address the problem. Sometimes, a person may have to file for bankruptcy in order to better his or her financial situation. Also known as a wage earner’s plan, Chapter 13 bankruptcy enables an individual to pay back all or most of the debt that is owed to creditors. Chapter 13 helps people with regular incomes develop a repayment plan over 3 or 5 years. Chapter 13 has a number of advantages over Chapter 7 bankruptcy, including the ability for an individual to protect the home from foreclosure, reschedule most unmanageable secured debts, extending them over the life of the Chapter 13 plan, and, finally, acting as a consolidation loan. Chapter 13 frees a debtor of further contact with creditors while they make payments to the trustee. With over 25 years of practice, Velasco Law Office has the experience and skill to guide you through the Chapter 13 bankruptcy process. If you need compassionate and effective legal services, contact Velasco Law Office today.
Am I eligible?
According to federal guidelines, even if a person is self-employed or operates an unincorporated business, he or she is eligible for Chapter 13 if the individuals:
- Unsecured debts are less than $383,175
- Secured debts are less than $1,149,525
This is impacted by the periodic adjustments to reflect changes in the consumer price index. A person cannot file for Chapter 13 bankruptcy if another petition was dismissed within 180 days. In addition, a person must receive credit counseling from a state-approved agency within 180 days prior to the filing.
How do I start the process?
To begin the process, you must file a petition with the bankruptcy court in New Jersey. The debtor must file documents that include:
- Information about assets, property, and liability
- Information about finances
- A list of executory contracts and unexpired leases
- A statement of financial affairs
In addition, an individual must file documents that include:
- Proof of credit counseling and any plan developed through the consultation
- Proof of any payments from employers within 60 days prior to filing
- Information about monthly net income and any foreseen rise in income or expenditures after filing
- A report of any interest the debtor has in state or federally-qualified education or tuition accounts.
Once you have satisfied the requirements, you will be issued an automatic stay, barring creditors from contacting you. Foreclosure stops immediately once the Chapter 13 proceeding commences. Unless granted an extension by the court, the debtor must file a repayment plan with a petition or within 14 days of the petition.
What is the Meeting of Creditors?
The trustee will hold a Meeting of Creditors a few weeks after the petition is filed. During the meeting, the debtor is allowed to have representation. In addition, the debtor will be under oath. To establish a clear picture of the situation, the trustee will ask a wide variety of questions regarding the debtor’s financial situation. Creditors are also allowed to ask questions on a limited basis. At this point, most outstanding issues are resolved and the parties will discuss a repayment plan.
The Chapter 13 plan and confirmation hearing
The next step is to have the court approve the repayment plan, which should have been filed with the petition. The repayment plan must detail a schedule of payments to the trustee who will then distribute the money to the creditors in the case. Most payment schedules are on a bi-weekly or monthly basis. A debtor must start payments within 30 days after filing for Chapter 13. A judge will decide on the plan within 45 days of the meeting of creditors.
What is a Chapter 13 discharge?
A debtor must pay a certain percentage of the debt through the repayment plan. Most unsecured debts are discharged and wiped clean once the payment plan is complete. The scope of a Chapter 13 discharge is complex and continues to change. Creditors who have collected as part of the Chapter 13 repayment plan may no longer take action to collect the debt from the debtor.
To learn more about the bankruptcy process, simply read Attorney Velasco’s Complete Guide to NJ Bankruptcy.
Contact a Middlesex County firm to assist you through your chapter 13 bankruptcy case
Velasco Law Office effectively represents New Jersey clients through Chapter 13 bankruptcy proceedings. Attorney Velasco has the skill and knowledge to ease your stress during this tough time. He will protect your interests through this document-heavy process. If you need quality legal services from an experienced attorney, contact Juan C. Velasco, Esq. today.