A New Jersey resident can quickly become overwhelmed by debt after a divorce, job loss, accident or illness. Under these circumstances, filing for bankruptcy may be an easy decision. However, deciding whether to file a Chapter 13 or Chapter 7 bankruptcy -- the most commonly filed by individuals -- may not be quite as easy.
Most of the attention during the housing crisis rightly went to first mortgages. However, numerous New Jersey homeowners also took out second mortgages in better economic times. In the aftermath of the Great Recession, those second mortgages add to the overwhelming amount of debt threatening to consume some residents. Fortunately, Chapter 13 bankruptcy could eliminate that second mortgage, along with residents' other debt.
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.
Since the United States Bankruptcy Code changed, not as many New Jersey residents qualify to file for Chapter 7 bankruptcy because they have disposable income, which is the money an individual has left after paying for necessities such as shelter, food and health care -- just to name a few. As an alternative, these individuals may file for Chapter 13 bankruptcy, which is a reorganization of a person's debts through a payment plan overseen by a trustee who works for the bankruptcy court. The benefits to filing a Chapter 13 bankruptcy are numerous.
Many New Jersey residents become overwhelmed by debt and decide to file for bankruptcy. However, knowing which form of bankruptcy to file can present a challenge. Significant differences exist between the two main chapters of bankruptcy filed by individuals -- Chapter 7 and Chapter 13.
No matter how much money a New Jersey resident makes, he or she can still be overwhelmed by debt. Many people believe that if a person earns a large salary, he or she does not have problems with debt. However, that can be far from the truth. Income level has little to do with the amount of debt a person may accumulate. For some, filing for Chapter 13 bankruptcy could help them pay off debt and achieve stability once again.
Even with the downturn in the economy, many people in New Jersey are still made to feel guilty if they are unable to meet their financial obligations. Many people feel they should be ashamed that they aren't paying their bills and have filed for bankruptcy protection. On the contrary, filing bankruptcy may have been the best and most responsible decision a consumer could make to deal with his or her financial situation.
As the year comes to an end, many New Jersey homeowners may be wondering whether Congress is going to renew the homeowner friendly tax provisions that are expiring on Dec. 31. Many homeowners continue to struggle with their mortgage debt and are doing what they can to find some closure before the end of the year. One of the biggest questions on a lot of minds right now is what will happen come Jan. 1 if the situation isn't resolved.
While the Olympics are wrapped up and the events are over, the eyes of Essex County sports fans are still on the athletes who competed and walked away victorious. This attention, as it does for any celebrity, is not always the most positive, though. For Gabby Douglas, a gold-winning gymnast, this has brought the eyes of the world to her family and her mother's Chapter 13 bankruptcy.
When an Essex County household is struggling with over-burdening debt, options become fewer and fewer to escape that debt. However, even with few options it can still be difficult to know which method of escaping debt is financially smartest for your future. Much of this comes down to choosing between the two most common forms of personal bankruptcy: Chapter 7 and Chapter 13.