A Guide to the Different Chapters of Bankruptcy

Understanding the Different Chapters of Bankruptcy in New Jersey: A Lawyer’s Perspective

Petition to File for Bankruptcy paperwork with a gavel next to it

Filing for bankruptcy is a significant decision that requires careful consideration and understanding of all your filing options. In New Jersey, individuals commonly hear about Chapter 7 and Chapter 13 bankruptcies but may not fully understand the differences. This blog provides an overview from bankruptcy lawyer, Joel R. Spivack’s perspective, emphasizing the nuances and benefits of each chapter.

The Bankruptcy Code and Its Options

The Bankruptcy Code offers several types of bankruptcy filings, each designed to address different financial situations. It’s essential to understand these distinctions to choose the most appropriate path. An experienced bankruptcy attorney can help navigate these complex choices, ensuring the best outcome based on your unique circumstances.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often referred to as straight bankruptcy or liquidation, is primarily utilized by individual debtors. This process, which can last up to six months, involves the discharge of most debts through a court-appointed trustee. The trustee will liquidate non-exempt assets to pay off creditors, allowing you to achieve a fresh start financially. Chapter 7 is suitable for those with limited income and significant unsecured debts.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is another option for individual debtors but involves a longer process, typically lasting three to five years. Unlike Chapter 7, Chapter 13 allows debtors to keep their property and proposes a repayment plan to pay off debts over time. This plan includes making past-due mortgage payments and settling unsecured debts, such as credit card balances and personal loans, for a percentage of the original amount. Debtors must also pay their tax debts in full. Chapter 13 is beneficial for those with a regular income who can manage a structured repayment plan while retaining their assets.

Choosing the Right Bankruptcy Chapter

Deciding between Chapter 7 and Chapter 13 bankruptcy depends on various factors, including your income, assets, and overall financial situation. Consulting with a knowledgeable bankruptcy attorney is crucial to making an informed decision. They can assess your case, explain the implications of each bankruptcy chapter, and guide you through the filing process.

Schedule a Consultation With a New Jersey Bankruptcy Attorney

Bankruptcy can be a complex legal process that should not be filed without professional guidance. A seasoned bankruptcy attorney can ensure you are treated fairly by the courts and help you navigate the intricate laws involved.

If you need expert advice on bankruptcy options, Joel R. Spivack, Esq., a New Jersey bankruptcy lawyer with over 30 years of experience, can assist you. He understands the nuances of the bankruptcy process and is dedicated to helping his clients achieve a fresh financial start.

Don’t wait to secure your financial future. Contact us today by filling out the online form for a consultation.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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