Chapter 13 Bankruptcy Attorney in Vineland, New Jersey

Filing for bankruptcy can be a wise decision to regain your footing and get on the path to financial relief, and many people are pursuing this option. In fact, from May 2022 to May 2023, there were 4,866 individuals in the state who filed Chapter 13 bankruptcy, according to the United States Bankruptcy Court District of New Jersey. 

To learn more about your options for filing and to sit down with an experienced and personable bankruptcy attorney, call me at the Law Office of Victor Druziako, P.C. I’m prepared to represent clients in Vineland, New Jersey, and throughout South Jersey.

Overview of Chapter 13 Bankruptcy

When an individual or couple is interested in declaring bankruptcy, they have two main options—Chapter 7 (also called “liquidation” bankruptcy) and Chapter 13 (called “repayment plan” bankruptcy). Chapter 7 bankruptcy is ideal for those who don’t have a lot of assets and who make less than the median income for a household of the same size in the state. For others, there’s the option of filing for Chapter 13.  

Chapter 13 is a good debt relief option for those with larger incomes and for those who want to protect their assets. With Chapter 13, you’ll be required to establish a repayment plan that you’ll have to stick with for three to five years. This installment plan will include all your outstanding debt—both dischargeable debt and non-dischargeable. At the end of this plan, any remaining eligible debt will be discharged. 

What Does It Do? 

Chapter 13 provides immediate debt relief because you’ll be granted an automatic stay, which means creditors must stop all attempts to collect debt. It can also help you keep your assets since you won’t be required to sell them off to pay your creditors. Most notably, this form of bankruptcy can help stop foreclosure proceedings on your home and will give you the opportunity to get current on your past-due payments. For others, it can help you stop vehicle repossession. However, this is not a guarantee, and all details should be thoroughly discussed with your attorney to evaluate your specific situation.  

What Doesn’t It Do? 

Although there are many forms of debt that can be discharged under Chapter 13 (consumer debts like credit cards, personal loans, medical bills, past-due rent and utilities, or some past income taxes), there are other forms of debt that it cannot wipe clean. This includes business debt, student loans, child support, alimony, or other taxes.  

Qualifying for Chapter 13

To qualify for Chapter 13 bankruptcy, you must meet certain income requirements. Chapter 13 is sometimes referred to as the “wage earners” plan because you must show that you can continue to pay both your regular monthly household bills as well as your newly established repayment plan. If your income is too low, then you likely won’t qualify. Chapter 7 bankruptcy is your next option. 

There are also debt limits that you must stay under to qualify which stand currently at $1,395,875 for secured debt and $465,275 for unsecured debt. 

The Process of Filing

Anyone who files for chapter 13 bankruptcy will have to go through a similar process. 

1. You’ll first provide information about your income, assets, expenditures, liabilities, contracts, and any other financial details. 

2. You will then be required to complete a mandatory credit counseling course and submit this certificate along with your filing. 

3. Once your paperwork has been received by the courts, you’ll be notified when your 341 meeting of creditors will be held. Here, you will have to provide important documents—such as tax returns, bank statements, and pay stubs—to your trustee. Using this information, your repayment plan will then be developed and confirmed by the court, and you’ll typically have to start making payments the month after you file. 

4. After the court confirms your plan but before you begin your payments, your creditors will get a chance to contest any details in it and request that changes be made. This is partly due to the way the repayment plan is created. Essentially, high-priority debt must be paid off in full (non-dischargeable debts), followed by secured debt (such as a home or car), and then unsecured debt (credit cards, medical bills). It’s possible that you won’t end up paying off all your unsecured debt, and some creditors may wish to contest the plan in hopes of getting a higher payment. 

After you’ve completed your repayment plan, all remaining dischargeable debt will be eliminated.