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If you are facing financial distress and thinking about filing for bankruptcy protection, you have two primary options available: You can file for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code or you can file under Chapter 13. In either case, in order to secure maximum financial protection and ensure that you receive as much debt relief as possible, it will be important for you to work with one of our experienced New Jersey bankruptcylaw firm.
If you are plagued by debt, filing for a Chapter 7 bankruptcy may be the most effective way to protect yourself from creditor harassment and start a new financial life. If you are eligible to file under Chapter 7, you will pay NOTHING back on your unsecured debts, which include credit cards, medical bills, utilities, repossessions, foreclosures, homeowners’ association (HOA) and condo fees.
A Chapter 7 bankruptcy petition will also stop bank levies and wage garnishments, and it will make the phone calls and letters from creditors go away. Critically, filing for bankruptcy under Chapter 7 allows you to retain your home and vehicles (as long as you can continue to pay these secured debts once you no longer have any unsecured debts), and it will put you on the path to restoring your credit score and financial stability without the burden of your outstanding unsecured debts.
Filing for bankruptcy under Chapter 13 is a good option for many individuals and couples. Also known as a “repayment” or “reorganization” bankruptcy, a Chapter 13 allows you to pay a set amount each month in order to catch up on your secured debts (i.e. your mortgage and car loans), and you may agree to pay a (usually small) percentage of your unsecured debts as well.
If Chapter 13 fits your economic situation, you will be able to stop a foreclosure and sheriff’s sale on your home by paying the arrears on your mortgage over a 36 to 60-month period. If applicable, you may also be able to file a “Strip Down” motion in order to reclassify your second mortgage or home equity loan from a secured obligation to an unsecured obligation removing it as a lien against your home, thus if you ever sell your house the only lien you owe will be the 1st mortgage. Depending on your financial circumstances, you may be able to file a “Cram Down” motion as well. This will establish a new, lesser amount owed on your car that is based on its current value and a reasonable interest percentage rate (currently around 5 percent) with a 36 to 60-month payment period.
A Chapter 13 filing can also allow you to:
When you are deeply in debt, climbing your way out can seem impossible. You want to pay back what you owe, but mounting financial pressures and the cost of living make paying off all of your debts unrealistic. Filing for bankruptcy under Chapter 7 or Chapter 13 can provide the relief you need to get back on solid ground and live a more financially stable life.
Would you like to speak with an attorney about securing financial relief by filing for bankruptcy under Chapter 7 or Chapter 13? To schedule a free, no-obligation consultation at Helmer, Conley and Kasselman, call us at 609-281-8798 or tell us how we can help online today.
Don’t let your rights be jeopardized.