CHAPTER 7 BANKRUPTCY FILING STARTING AT $999

Chapter 7 and Chapter 13 Bankruptcy in the State of New Jersey

New-Jersey Chapter 7 Bankruptcy eliminates unsecured debt. Here are some examples of unsecured debt that Chapter 7 may eliminate: most personal loans, credit cards, medical bills and deficiencies on repossessed vehicles.

Most times Chapter 7 Bankruptcy in the State of New Jersey is the quickest, least expensive and easiest way to discharge debt. A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13. Instead, the bankruptcy Trustee gathers and sells the debtor's nonexempt assets and uses the proceeds from this sale of the non exempt property to pay creditors in accordance with the provisions of the Bankruptcy Code. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a Trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property and therefore potential debtors, prior to filing for bankruptcy, should seek the advice of Bankruptcy Counsel in New Jersey.

When a Chapter 7 petition is filed, the U.S. Trustee's Office appoints an interim Trustee to administer the case and if need be, liquidate the debtor's nonexempt assets. If all the debtor's assets are exempt or subject to valid liens, the Trustee will normally file a "no asset" report with the court, and there will be no distribution to unsecured creditors. This is typically the way most Chapter 7 cases in New Jersey are resolved. But if the case appears to be an "asset" case at the outset, than the Trustee sends out a proof of claim to all the creditors in the case and these creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. A governmental unit, such as IRS or Labor Department, however, has 180 days from the date the case is filed to file a proof claim. In the typical no asset Chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. The primary role of a Chapter 7 Trustee, in an asset case, is to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the unsecured creditors.

Chapter 13 may offer individuals a number of advantages over Chapter 7 Bankruptcy in New Jersey (NJ).

You may consider Chapter 13 Bankruptcy as a good option if you do not meet the criteria for filing a Chapter 7 Bankruptcy. Chapter 13 offers individuals a number of advantages over liquidation under Chapter 7. Perhaps most significantly, Chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this Chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the Chapter 13 plan on time. Another advantage of Chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the Chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on "consumer debts." This provision may protect co-signers. Finally, Chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a Chapter 13 Trustee, who then distributes payments to creditors. Individuals will have no direct contact with creditors while under Chapter 13 protection.

To qualify for Chapter 13 Protection, you must be an individual with regular income. There are also certain debt limits which may prevent you from filing for Chapter 13 Protection. Specifically, Individuals having more than $250,000 in unsecured debt and more than $750,000 in secured debt are precluded from filing for Chapter 13 Protection.