When a New Jersey resident decides to file for bankruptcy, the next step is to determine what type of bankruptcy to file. Consumers most often file either Chapter 7 or Chapter 13. Both chapters have certain requirements, which often help make the decision of which to file for the consumer.
Businesses cannot file under Chapter 13, along with commodity brokers and stockbrokers. However, if you are a sole proprietor or a partner in a business, those debts that you are responsible for can qualify you for this type of bankruptcy. If you have a prior bankruptcy, timing is also an issue since there are restrictions on how often a person can file.
After those requirements, the two most important factors are whether you make enough money to file Chapter 13 and being certain that your debt does not exceed certain limits. Since this form of bankruptcy is a reorganization of your finances and requires a repayment plan that can last for three to five years, these two requirements must be met. In fact, you will be required to file a proposed repayment plan with the court. A trustee will be appointed to evaluate whether the proposal is feasible. Once a plan is agreed upon and approved by the court, payments can begin.
Filing for Chapter 13 bankruptcy can give you the relief you need from your financial woes. However, knowing whether you qualify to file can be daunting and confusing. Having the assistance of someone here in New Jersey who understands the U.S. Bankruptcy Code can help you determine whether this is the right chapter for you.
Source: FindLaw, “Who Can File for Chapter 13 Bankruptcy?“, , Sept. 7, 2014