New Jersey Chapter 13 Rules

By Heather Frances J.D.

Bankruptcy offers filers a chance to get back on their feet financially, paying off some debts and erasing others, though not all debts can be erased through a bankruptcy case. Federal law governs most aspects of bankruptcy, but a few rules and standards are state-specific, such as rules about exemptions. Exemptions allow you to protect certain property from your creditors.

Bankruptcy offers filers a chance to get back on their feet financially, paying off some debts and erasing others, though not all debts can be erased through a bankruptcy case. Federal law governs most aspects of bankruptcy, but a few rules and standards are state-specific, such as rules about exemptions. Exemptions allow you to protect certain property from your creditors.

Chapter 13

Chapter 13 bankruptcy is a form of personal bankruptcy in which a debtor pays off all or some of his eligible debt over a three- to five-year period. Unlike a Chapter 7 bankruptcy, Chapter 13 requires debtors to have a regular source of income that they can contribute toward their debts. Once a debtor’s repayment plan is approved by the bankruptcy court, the debtor sends payments to his court-appointed trustee, who then pays the debtor’s creditors.

Ready to start your LLC? Start an LLC Online Now

Filing Requirements

A Chapter 13 filer must fulfill certain requirements before he can begin his repayment plan. First, he must complete an approved credit counseling course. He must also fill out required filing forms, including a list of his assets, income and expenditures and file these forms with the United States Bankruptcy Court for the District of New Jersey, located in Camden, Newark and Trenton. The court-appointed trustee will hold a 341 meeting, or creditors' meeting, to ask the filer any questions he may have and allow the filer’s creditors to ask questions. If the filer has met all these requirements and has submitted a reasonable payment plan that meets the trustee’s approval, he can then begin his repayment period.

Exemptions

Bankruptcy exemptions determine how much property a debtor can protect from creditors during a bankruptcy. Though Chapter 13 is governed by the federal bankruptcy code rather than New Jersey law, New Jersey has its own exemptions that may be applied in bankruptcy cases. New Jersey allows debtors to choose between New Jersey’s list of exemptions and the federal exemption list. Exemptions apply to a variety of property types, such as real estate, pensions, insurance proceeds and personal property.

Discharge

If a Chapter 13 debtor completes all the filing requirements and makes all his required payments, he is eligible for a discharge, or elimination, of certain remaining debts. Some debts, like certain tax debts and debts for child support, are not eligible for discharge, but debts like credit cards are dischargeable. If a debt is discharged by the bankruptcy court, the debtor no longer has any legal responsibility to pay that debt.

Ready to start your LLC? Start an LLC Online Now
Rules for Declaring Bankruptcy in Kansas

References

Related articles

Steps for a Bankruptcy in Colorado

Bankruptcy gives a debtor a fresh start by helping him dig out from a debt hole. There are several types of bankruptcy a debtor can file, depending on his situation. Bankruptcy is governed by federal law, but it has certain state-specific variations, including income qualifications and lists of what property is protected from sale during certain bankruptcy proceedings.

Things to Know Before Filing for Bankruptcy in Hawaii

Bankruptcy can be a good option for those who feel overwhelmed by debt, though bankruptcy isn’t for every situation. For example, you must be a resident of Hawaii for 90 days before filing. In addition, your options in the state are different than those in other states since Hawaii has its own wage and exemption standards. If you decide to file a bankruptcy case, an attorney or online legal services provider can help.

Pros & Cons of Filing Bankruptcy

Individual debtors frequently file for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code, and either course can provide more pros than cons for certain debtors. To file under Chapter 7, you must meet certain income qualifications, but under Chapter 13, you must follow a repayment plan over three to five years. At the end of either type of bankruptcy, you may receive a discharge, or elimination, of certain remaining unpaid debts.

LLCs, Corporations, Patents, Attorney Help

Related articles

Guidelines for Filing Chapter 13 in Minnesota

Personal bankruptcy can help Minnesotans with heavy debt loads get some relief and a financial fresh start. Most ...

What Does a Discharge in a Chapter 13 Bankruptcy Mean to Debtors?

Bankruptcy allows a debtor to obtain relief from his creditors if he meets certain legal requirements. Chapter 7 ...

What Won't Be Dismissed in Chapter 7

In a Chapter 7 bankruptcy, often called liquidation bankruptcy, a debtor's non-exempt assets are sold to pay the ...

Provisions of Chapter 13 of the Federal Bankruptcy Laws

Chapter 13 bankruptcy is a form of personal bankruptcy that allows an individual’s debt to be adjusted if he has ...

Browse by category