The basics of filing for a Chapter 13 Bankruptcy. A Chapter 13 bankruptcy is only available to individuals and couples and allows you to repay debts through a restructuring plan. You keep all of your property and pay back some or all of your debt in a three to five year period to a bankruptcy trustee who then pays your creditors. There are many excellent lawyers in Trenton who can assist you with working through all the details of a Chapter 13 bankruptcy, starting with making sure you are qualified to file.
Chapter 13 bankruptcy requirements include:
- A business owner can file for Chapter 13, but only the personal debts can be discharged, not those of the business.
- You must have regular and reliable income and must be able to make regular payments to a Chapter 13 trustee. If you cannot prove regular and reliable income, there is a good chance your Chapter 13 plan will not be approved.
- Your unsecured debts cannot exceed $383,175. Unsecured debts include things such as credit card debt, personal loans, taxes, medical bills and student loans. Secured debt includes things such as mortgages and car loans and cannot exceed $1,149,525.
- You will not be allowed to file Chapter 13 if you filed a previous Chapter 13 bankruptcy in the past two years, or filed a Chapter 7 bankruptcy in the past four years.
- You cannot file Chapter 13 if you are a stocks or commodities broker.
Priority debts in a Chapter 13 bankruptcy include taxes, alimony and child support and must be repaid in full as part of your plan. For mortgages and car loans, you may be able to surrender your property and you will not need to make any additional payments on them. Non-priority unsecured debts such as credit cards and medical bills usually do not need to be paid in full as part of a Chapter 13 plan.
Creditors take a portion of what they are owed and that amount is based on the amount of disposable income left over after paying priority and secured debts. Garces, Grabler & LeBrocq is a full service New Jersey law firm with offices in Elizabeth, Freehold, Hackensack, Newark, New Brunswick, Perth Amboy, Plainfield and Trenton.
