Stopping a Foreclosure on Chapter 13

A chapter 13 bankruptcy allows an individual to keep his property and to pay back his debts over a period of three to five years. When someone files for Chapter 13 bankruptcy, he must submit a list of all his debts. In addition, he must supply a list of all his monthly incomes and expenditures. A plan is then generated that allows the debtor to pay installments to each of his creditors, each month, until the debts are paid off.

When determining how long an individual will be making payments under Chapter 13 bankruptcy, the debtor’s monthly income is compared with the median income for the state of New Jersey. If the debtor earns less per month than the median income for New Jersey, his Chapter 13 repayment plan will be for three years. A bankruptcy court may then determine that the three-year plan is too short to pay off all debts and require the debtor to be on the Chapter 13 repayment plan for longer than three years.

If the debtor’s monthly income is greater than that of the New Jersey median income, his Chapter 13 repayment plan generally is for five years. According to bankruptcy law, in no case should a Chapter 13 repayment plan last longer than five years.

Home Foreclosures

One of the main benefits of filing Chapter 13 bankruptcy, opposed to filing a bankruptcy under Chapter 7, is that the debtor can be saved from having his home foreclosed upon. By filing under Chapter 13, a debtor, and his Morris County Chapter 13 bankruptcy lawyer, can put an immediate halt to any foreclosure proceedings, can adjust the debtor’s monthly mortgage payments and can continue owning his home by paying off past due payments over time.

Debt Consolidation

Another important aspect of Chapter 13 bankruptcy is that such filing allows the debtor to consolidate all of his debts through a bankruptcy trustee. All debts are renegotiated with creditors, the debtor has no direct contact with creditors and a monthly payment is made by the debtor directly to the bankruptcy trustee. Once the trustee has the debtor’s monthly payment in hand, the payment is dispersed to all creditors and the debtor’s debt is reduced. A qualified Morris County Chapter 13 bankruptcy attorney can walk a debtor through the complicated bankruptcy process to determine which method of filing is best for him.