Chapter 13 Bankruptcy Attorney in Howell, New Jersey
Finding You Financial Solutions Through Bankruptcy
One unexpected tragedy can leave you unable to keep up with your monthly payments. A sudden job loss, car accident, or another injury can generate tremendous expenses that prevent you from keeping up with your existing obligations. This leads to situations where individuals and families with steady incomes struggle to stay on top of their debt.
Filing for Chapter 13 bankruptcy can provide the debt relief that you need. A Chapter 13 bankruptcy is often described as a reorganization bankruptcy for individuals. It is frequently used to provide an individual (or married couple) the opportunity to repay certain specific creditors, such as mortgage companies, over time.
By utilizing Chapter 13, you could save your home from foreclosure by repaying mortgage arrears that have accrued on your account. You could repay the mortgage arrears over a three- to five-year period and retain your home.
Chapter 13 can be used to save real estate, automobiles, and other secured collateral. It can also be used to repay special types of debts, such as back taxes or judgment liens.
The bottom line is that filing for Chapter 13 bankruptcy can give you the flexibility and tools that you need to defeat debt. Attorney Fedoroff is a Howell Chapter 13 bankruptcy lawyer at Fedoroff Firm LLC who can guide you through the process and help you maximize its benefits. She is committed to your long-term financial success and will serve as your advocate every step of the way.
New Jersey Chapter 13 Bankruptcy Qualifications
Consumers will generally only qualify for either Chapter 13 bankruptcy or Chapter 7 bankruptcy. Eligibility is determined by overall income level and disposable income.
To confirm your eligibility to file for Chapter 13 bankruptcy, you will need to undergo the state’s Means Test. If your household’s average monthly income is too high, exceeding the state’s median average, you will need to assess disposable income. This is calculated by subtracting essential monthly expenses from your monthly income.
If the resulting amount is sufficiently high, you will be precluded from Chapter 7 bankruptcy and will instead be expected to file for Chapter 13.
There are other reasons to strategically file for Chapter 13 bankruptcy over Chapter 7. Chapter 7 bankruptcy involves a liquidation process that can require the sale of certain lucrative assets to repay creditors. For individuals with a wide range of assets, filing for Chapter 7 could put some of that property at risk.
Chapter 13 bankruptcy does not involve any liquidation, meaning you will not lose any of your property during the process.
Additionally, you may have specific types of debt that cannot be discharged through bankruptcy. While you will not be able to absolve the debts, the Chapter 13 bankruptcy typically gives filers as many as 5 years to reorganize their finances, giving you a substantial level of time and flexibility to catch up on payments.
The Howell Chapter 13 bankruptcy attorney can evaluate your specific financial circumstances and advise what type of bankruptcy filing makes the most sense for your case. She can help you understand the implications of this decision and together build a strategy that will best leverage the filing tools.
Benefits of Chapter 13 Bankruptcy
One of the largest benefits of Chapter 13 bankruptcy is its length. Unlike a Chapter 7 bankruptcy, which typically concludes in under 6 months, a Chapter 13 bankruptcy will last for as many as 5 years. This is important due to the automatic stay.
An automatic stay in a court order that halts any collection actions being pursued against you. It freezes and prevents foreclosures, collections lawsuits, wage garnishments, repossessions, and any other type of adverse creditor behavior. The automatic stay is issued shortly after you formally file and remains in effect until your Chapter 13 bankruptcy concludes so long as you continue to make your court-mandated payments. This means that you will potentially have up to 5 years of protection from creditors when filing for Chapter 13 bankruptcy.
Successfully completing your Chapter 13 bankruptcy also entitles you to discharge any remaining unsecured debts. This includes credit card debt, medical debt, personal loans, and unpaid utility bills. Though you will not be able to discharge secured debts, the 5 years of protection can give you the time and flexibility to reorganize finances, raise funds, and catch up on payments.
The Chapter 13 Bankruptcy Process
In a Chapter 13 bankruptcy case, you will file a Chapter 13 Plan with the United States Bankruptcy Court, setting forth a proposal for dealing with your creditors. The plan you propose will be specific to your unique set of circumstances.
What Will My Chapter 13 Bankruptcy Payment Be?
The average chapter 13 monthly payment is usually $500-$600. Take this number with a grain of salt however since your payment will be tailored wholly to your specific situation. Your payment calculations will take into account not only your debt and income ratio but also the types of debts you have, your property values, assets, etc.
If you are looking for a bit more detail when trying to calculate your average chapter 13 monthly payments then you can use an online calculator to help. Once again, take the information you find here with a grain of salt. When in doubt you can reach out to one of a chapter 13 bankruptcy lawyer who is always standing by to answer any of your questions and clarify details.
Depending on your specific financial situation, you may propose to repay your unsecured creditors as much as 100% of the amount owed or as little as 5% of the amount owed. Your plan will provide that you will make monthly payments to a Chapter 13 Trustee, who will then disburse payments to your creditors.
Although Chapter 13 allows a certain amount of flexibility, your plan must comply with the requirements of the United States Bankruptcy Code. This in practice means that you must prove that your creditors will receive as much in your Chapter 13 filing as they would have received in a Chapter 7 filing. Your creditors and the Chapter 13 Trustee will have an opportunity to object to your plan if they believe that you are not acting in good faith or if your plan is not feasible. Often such objections are resolved by making certain changes to your plan.
By the end of the plan-making process, you will have agreed to what is effectively a “lump sum” payment. This single monthly installment combines all of your outstanding debts and must be paid over a period of 3 to 5 years. The good news is that the amount of this payment is not determined by the total size of your debt. Instead, it is calculated by your ability to pay – your amount of monthly disposable income.
Your plan is not binding on your creditors until it is confirmed (approved) by the Bankruptcy Court. The Court will schedule a formal hearing called a Confirmation Hearing and if the plan is approved, the Court will enter an order confirming the plan. At that point, your plan is legally binding on all of your creditors.
Attorney Fedoroff can assist you in formulating a fair and reasonable plan that is in compliance with all requirements of the U.S. Bankruptcy Code. The team can also help you field objections, advocate on your behalf, and make any necessary adjustments to your plan.
How a Chapter 13 Bankruptcy Attorney Can Help
Our Howell Chapter 13 bankruptcy attorney at Fedoroff Firm LLC can support you throughout your filing. She has over 20 years of experience and has helped hundreds of clients navigate the bankruptcy process. Attorney Federoff can work directly with you to help understand the implications of your filing, including estimating what you will be expected to pay on a monthly basis, what negative creditor actions will be stopped, and what debts you may be able to discharge. She can serve as your advocate in all court proceedings and ensure you are given the opportunity to overcome your debt and build a new, fresh financial future.