Chapter 7 or Chapter 13? Which is a Better Option in NJ?
Our South Jersey Bankruptcy Lawyers Can Help You Figure Out Which Solution is Right for You
Chapter 7 and Chapter 13 bankruptcy each provide different types of relief. A bankruptcy attorney is best suited to advise as to which bankruptcy solution will help you most. Whether you file Chapter 7 bankruptcy or Chapter 13 bankruptcy depends upon a number of factors, and our South Jersey bankruptcy attorneys can explain the differences and help you choose.
What is Chapter 7?
Chapter 7 bankruptcy is generally a fast bankruptcy; the cases usually last about three to four months, and you can discharge credit card debt, medical bills, personal loans, utilities and some income tax debts without having to repay them. You can keep your house and your car in Chapter 7 if you can afford the payments and if you are current on your payments, but you must repay these loans if you want to keep the property. If you have debt that is nondischargeable, such as child support, alimony and most student loans and some taxes, you will still be responsible for them after a Chapter 7.
What is Chapter 13?
A Chapter 13 bankruptcy is a repayment arrangement in which you propose to repay your creditors over the next three to five years. Some creditors will receive more than others. You can use a Chapter 13 to catch up on your house payments, pay off your car, pay back the IRS and even repay back child support. At the end of the case, you receive a discharge that wipes out any remaining debt that you would have discharged in a Chapter 7.
Who Should File Chapter 7?
Chapter 7 is for those who:
- Have a lot of unsecured debt, like credit card debt and medical bills
- Are current on their house and car payments or are interested in walking away from the house and the car because they are too costly
- Cannot afford to repay their debts after paying for their reasonable, necessary expenses required to support themselves and their families
Who Should File Chapter 13?
Chapter 13 bankruptcy can help people who:
- Need debt relief but have sufficient regular income to enter a repayment plan
- Need to save a home from foreclosure, sheriff sale or tax forfeiture
- Need to save a car from repossession
- Need to stop IRS penalties and interest and repay nondischargeable income taxes
If you are having problems with any kind of debt, consult with our South Jersey bankruptcy lawyers now. We have decades of experience in the New Jersey bankruptcy courts, and we handle more personal bankruptcy cases than any other firm in New Jersey. We serve all of South Jersey – call today and let our family help your family.