Pennsauken, NJ Bankruptcy Attorney for Chapter 7 and 13
Does the mortgage on your home in Pennsauken seem to consume more and more of your budget each month, without ever giving you a chance to really catch up? Do you worry that your car will be repossessed, that your house will be foreclosed on, or that you will be evicted from your apartment? Are you constantly contacted by creditors and debt collectors who are looking for payments on overdue bills?
If debt is causing you stress and anxiety about how you will manage your finances, bankruptcy may be able to provide relief. Bankruptcy can help you shrink or erase your debts, while simultaneously giving you protection from debt collectors. Bankruptcy can even save your home from foreclosure, or stop your vehicle from being repossessed.
However, because of the obstacles that can arise, you shouldn’t start the bankruptcy process without first getting help from an experienced bankruptcy lawyer in Pennsauken. To find out more about how a New Jersey bankruptcy attorney can help you eliminate debt, call Sadek and Cooper Law Offices, LLC at (856) 354-3310 for a free legal consultation.
Chapter 7 vs. 13: What is the Difference?
There are many important points to consider when filing bankruptcy in Pennsauken. When, for example, is the best time to file? If you are married, should you file individually or jointly with your spouse? Which set of bankruptcy exemptions will you choose?
Along with these and other questions, one of the most important factors to consider is whether you will file Chapter 7 bankruptcy or Chapter 13 bankruptcy. Though there are several other bankruptcy options, they are rarely utilized. Chapter 7 is the most common type of bankruptcy, followed by Chapter 13.
Chapter 7 can be used eligible individuals, spouses filing jointly, S corporations, C corporations, partnerships, limited liability companies (LLCs), and small business owners. Chapter 13 cannot be used by businesses, though sole proprietors may file Chapter 13.
When filing, you will undergo “means testing,” which is an assessment of your income to determine whether Chapter 7 or Chapter 13 is appropriate. You must also meet other requirements, such as a residency requirement and completion of a mandatory credit counseling course.
Both chapters of bankruptcy can help you pay considerably less than what you owe your creditors. It may be possible to wipe out certain debts altogether. Both chapters of bankruptcy can also protect you from debt collectors, whose actions, such as evicting you or garnishing your wages, are temporarily frozen by the “automatic stay” component of bankruptcy. In addition, Chapter 13 has the added benefit of preventing foreclosure and vehicle repossession, provided the debtor complies with the terms of his or her bankruptcy plan.
Despite these similarities, there are also significant differences between Chapter 13 and Chapter 7. For example:
- Chapter 7 usually takes about four to six months. Chapter 13 requires three to five years.
- Chapter 7 revolves around liquidation (sale) of the debtor’s nonexempt assets. Chapter 13 revolves around a repayment (“reorganization”) plan that lasts three or five years.
- Chapter 13 is intended for debtors who have a higher level of income, because it requires commitment of disposable income to a long-term monthly or biweekly payment plan. Chapter 7 can be effective for debtors who have limited income and assets.
For maximum efficiency, it’s important to choose wisely when filing for bankruptcy in Pennsauken. Our Pennsauken bankruptcy attorneys handle both Chapter 7 and Chapter 13 cases, enabling us to help you make a detailed comparison for smart and strategic bankruptcy planning.
What Happens When You File Bankruptcy in NJ?
The process after you declare bankruptcy in Pennsauken depends on whether you file Chapter 7 or Chapter 13. If you file Chapter 7, expect a timeline of approximately three or four to six months before your case is discharged by the bankruptcy court. If you file Chapter 13, the process will be longer: up to five years, depending on your financial circumstances.
If you file for Chapter 7, your case will be assigned a Chapter 7 trustee, whose role is to liquidate your assets. That means the trustee can sell some of your property in order to repay your creditors. However, you can protect certain assets from liquidation by using bankruptcy exemptions strategically. It is often possible for Chapter 7 debtors to keep most or even all of their property.
If you file Chapter 13, a trustee will also be assigned to your case, but he or she will play a different role. After proposing a monthly payment plan of a duration up to five years, you will make payments directly to the trustee, who is responsible for distributing the funds amongst your creditors.
Whether you file Chapter 7 or Chapter 13, your objective is to obtain a discharge. The discharge will release you from liability for certain debts, meaning you will not have to pay the debts any longer. Debts in this category are called “dischargeable” debts, and include debts related to medical bills, credit card bills, personal loans, business loans, utility bills, and more.
Other than discharge, another possible outcome is the involuntary dismissal of your case by the bankruptcy court. If your case is dismissed, you will not be relieved from any of your debts, nor will you receive the protection of the automatic stay. Paperwork errors, missed deadlines, fraudulent activity, bankruptcy code violations, and other mistakes can all lead to the dismissal of your case. To navigate obstacles and avoid case dismissal, it is essential to have skilled legal representation.
Pennsauken Bankruptcy Lawyers Handling Chapter 7 and 13
Sadek and Cooper Law Offices, LLC assists individual debtors, married couples, and business owners with Chapter 7 bankruptcy, Chapter 13 bankruptcy, and numerous alternatives to bankruptcy. We provide effective, experience-driven bankruptcy legal services to the residents of Pennsauken Township and the surrounding area, including East Pennsauken, Biedemon, Morris, Bethel, Merchantville Park, Amon Heights, Homesteadville, Hillcrest, Jordantown, Dudley, Delaware Gardens, Wellwood, Morrisville, Delair, Delair Station, and North Pennsville. For a free legal consultation with our Chapter 7 attorneys in Pennsauken, call Sadek and Cooper Law Offices, LLC at (856) 354-3310 today.