Chapter 13 Bankruptcy Lawyer – New Jersey

If you struggle with unmanageable debt and harassment from creditors and collection agencies, you may want to consider scheduling a consultation with New Jersey bankruptcy lawyer Robert Manchel regarding Chapter 13 bankruptcy protection.

Attorney Robert Manchel has considerable experience in helping individuals and families regain control of their financial situation by filing for Chapter 13 bankruptcy. Given the new restrictions under the more recent bankruptcy laws, filing for Chapter 13 bankruptcy may be the path for debt relief, if you or your family do not qualify for another bankruptcy chapter.

Furthermore, with the expert legal guidance of Attorney Robert Manchel, you may be able to prevent losing your house to foreclosure and prevent having other property repossessed, while restructuring your debt payments.

Stop the phone calls and other harassment by collectors! Call New Jersey bankruptcy attorney Robert Manchel today at 866.503.5655!

Under Chapter 13 bankruptcy, debtors (person filing) propose a plan that follows the conditions outlined in the bankruptcy laws setting forth the repayment to creditors over time. Debtors have the option of selling their home or presenting a 36 to 60-month plan to bring current any mortgage payments that are in arrears. Under some Chapter 13 repayment plans, where debtors are behind on mortgage payments and have high credit card debt, they may only need to pay a small percentage of any outstanding balances.

All creditors must be included on the petition even though the bankruptcy case is filed for one specific reason, such as saving a house. Under all circumstances, the debtor must make one monthly payment to a trustee (case administrator), who disburses the funds to various creditors, based on the bankruptcy code and lawful plan. Also, under all circumstances, the debtor must pay all projected monthly disposable income to the trustee, each month. The debtor’s lawyer and the debtor must file a legal plan, reflecting which creditors will be paid and the amount paid to each creditor. However, the plan must be created based on the bankruptcy laws and other criteria.

Also, the amount of the monthly payment and the creditors, who will receive distributions, is based on the following: value and equity of the debtor’s assets; household income, household expenses; debtor’s intentions; and, classification of creditors. Typically, a bankruptcy plan may not be less than 36 months and may not exceed 60 months. The trustee may also be required to make distributions to certain creditors, such as the IRS. Additionally, based on the circumstances, the debtor must also make monthly payments  directly to the mortgage company and finance (lease) company. Typically, after all monthly payments are made and the plan is complete, the debtor obtains a discharge of any unsecured debt (ie: credit card debt) that was not required to be paid.

The automatic stay is applied in a chapter 13 case, as well as in a chapter 7 case. This means that immediately upon the filing, no creditor is permitted to contact or proceed with the collection of any debt and/or property.  However, in a chapter 13 case, in order to continue the stay and keep such assets, the debtor must make payments to such creditors (ie: mortgage company/ auto finance company), after the bankruptcy filing, that complies with an acceptable plan. For example, if a person wishes to save his auto from repossession, as a result of finance arrears, the monthly plan must provide auto. finance distributions to cure the pre-filing arrears, while also making provisions to pay future regular and direct monthly finance payments. In this scenario, the stay continues for the duration of the plan, unless the trustee and/or the regular monthly finance payments are not made. Please note that there may be various payment options for saving a vehicle.

Typically, a person may wish to file a chapter 13 bankruptcy case for the following reasons.

A person may not qualify for a chapter 7 discharge because their monthly household income and expenses do not meet two separate criteria. If there is disposable income in connection with the “Current Monthly Income Test” (Means Test), and/or the projected future household income and expense test, the debtor may not obtain a chapter 7 discharge. Under this scenario, the debtor may file a chapter 13 bankruptcy case with a monthly trustee payment that is distributed to unsecured creditors, pro rata, over a 36 to 60 month period. If there are no other issues, or arrears to other creditors, the debtor’s disposable monthly income will be paid to the unsecured creditors. After all plan payments are made and the plan is complete, any unsecured debt that is not paid, is typically discharged and eliminated. In most cases, all or a portion of the unsecured debt is eliminated as a result of the debtors’ insufficient monthly disposable income.

A person may want to file a chapter 7 bankruptcy case to discharge his unsecured debt, but owns property with a substantial value that cannot be completely exempt. Instead for filing a chapter 7 case that will allow the trustee to sell property, the individual may file a chapter 13 case, which requires the debtor to pay, at least, the amount of the unexempt portion of the property to the unsecured creditors, pro rata.

For example, if the amount of $5,000.00 cannot be exempt in an automobile, the chapter 7 trustee may sell the vehicle. In order to save the auto, the debtor may file a chapter 13 and pay at least $5,000.00 to the unsecured creditors, pro rata, through a monthly chapter 13 bankruptcy plan. Under this scenario, the debtor will avoid the sale of such property by a chapter 7 trustee. The debtor is now permitted to keep the property, by paying back, at least, $5,000.00 towards the total amount of unsecured debt, in a chapter 13. A standing chapter 13 trustee will never sell any property. However, if a debtor has substantial “unexempt” equity, the monthly trustee payment, may be significant. There is a detailed explanation of exemptions within this website. Please note that the trustee distributions may require payments to other creditors, as well.

An individual that is behind with mortgage payments are unable to save their house from foreclosure in a chapter 7 bankruptcy case. However, an individual may be able to permanently save their house through a chapter 13 bankruptcy case by paying the total amount of their pre-filing mortgage arrears, through a monthly trustee payment, over a period of 36 to 60 months. Typically, the total amount of the mortgage payment arrears are divided by the number of months of the bankruptcy plan. Each month, the trustee makes a distribution to the mortgage company, while the regular monthly mortgage payments are made directly to the mortgage company. The same basic process is applied towards vehicle payment arrears, through a bankruptcy plan. Please note that there may be other options to save a house or auto. Additional creditors may also be entitled to trustee distributions.

However, a debtor may obtain a chapter 13 discharge of debt in a chapter 13 case that is filed less than eight years, but more than four years, after a prior chapter 7 filing. Consequently, a person will be permitted to discharge and eliminate a portion of their unsecured (ie. Credit card debt, personal loans) debt by filing a subsequent chapter 13 case, four years after the filing of a prior chapter 7. However, the debtor must first complete a chapter 13 plan by making monthly payments, in the amount of their disposable, income for 36 to 60 months. Typically, after the completion of their plan and payment of a portion of their debt, the balance of their unsecured debt that is not paid would be discharged and eliminated.

Certain types of debts are not dischargeable in a chapter 7 or 13, but may be paid in a chapter 13. For example, depending on the circumstances, tax debt for specific tax years may not be dischargeable in a chapter 7 or 13. However, a person may wish to pay the “undischargeable” taxes, through a bankruptcy plan over 36 to 60 months. An example of this kind of debt would include certain types of tax liabilities.

Some types of debt are dischargeable in a chapter 13, but not in a chapter 7. For example, equitable distribution that is owed to an ex spouse may be dischargeable in a chapter 13 after paying and completing the entire 36 to 60 month trustee plan payments. Also, certain tax penalties and interest may be discharged in a chapter 13 and not in a chapter 7.

Robert Manchel has provided legal guidance for thousands of people in bankruptcy proceedings. He carefully explains the bankruptcy laws that apply to your situation and outlines the differences and similarities between bankruptcy chapters so that you can make informed decisions about what will be best for you and your family.

If you’re looking for a NJ bankruptcy lawyer to help you either restructure your debt or make a fresh start, call 866.503.5655 today and schedule a consultation.