Using Chapter 13 to Restructure Debt in Newton and Sussex County

Solving debt problems without selling your assets

Too many people in Morris, Passaic, Sussex and Warren Counties who are struggling with debt completely overlook the option of Chapter 13 bankruptcy. For most, the idea of bankruptcy means selling everything they own and starting over completely. Besides the fact that this grim vision isn’t even a true reflection of Chapter 7 bankruptcy, Chapter 13 offers certain individual debtors a second option that can allow them to get out of debt without selling any property. At Hollander, Strelzik, Pasculli, Hinkes, Vandenberg & Hontz, L.L.C., we realize that bankruptcy is intimidating for many people. That is why we always take the time to explain all the options, including Chapter 13, so that you can choose the least burdensome and most effective option for dealing with your debt.

What is Chapter 13?

Chapter 13 is a form of bankruptcy available only to individuals and sole proprietors. Upon filing a petition for Chapter 13 relief, you must submit a plan for paying back your creditors — usually over three to five years. A bankruptcy attorney from our firm can help you construct a plan that meets the essential requirements for court approval:

• The plan must devote all your disposable income — your remaining monthly income minus necessary living expenses — to repaying your secured and unsecured debt.
• The plan must allow your creditors to receive as much as they would have, had you liquidated your assets under Chapter 7 for unsecured debt.

If the court approves your plan and you make all the scheduled payments on time for the entire plan period, any remaining unsecured debt will be discharged. Some Chapter 13 debtors are able to pay back the entirety of their debts, and no discharge is necessary. The plan usually spreads payments out over a longer period, allowing struggling debtors to catch up.

What are the advantages?

The first advantage of Chapter 13 over Chapter 7 is that you do not have to liquidate your property. A second advantage is that Chapter 13 is much more effective than Chapter 7 when it comes to dealing with secured debt. Together, these advantages frequently make Chapter 13 an excellent choice for people struggling primarily with mortgage debt and other types of secured debt, as well as unsecured debt, who are concerned about losing their homes.

Who qualifies?

To qualify for Chapter 13 relief, you must be an individual, you must undergo consumer debt counseling before filing your petition, and you must have a regular monthly income. Additionally, your secured and unsecured debts must fall below statutorily established levels. However, unlike under Chapter 7, Chapter 13 petitioners do not need to pass the means test to qualify.

Get in touch with Newton bankruptcy lawyers who can help you deal with your debt

Bankruptcy is not a one-size-fits-all process. If you are struggling with debt and want to know your options, the attorneys at Hollander, Strelzik, Pasculli, Hinkes, Vandenberg & Hontz, L.L.C. can explain all the paths available to financial solvency, so you can choose the best one for your situation. Call our office today at 973-383-3233 or contact us online to schedule a consultation. We are located on the square in Newton and serve Sussex and Warren Counties in northwestern New Jersey.