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Advice for Making Chapter 13 Bankruptcy Work for You

Looking for advice for making Chapter 13 Bankruptcy work for you?

People file for Chapter 13 bankruptcy for many reasons such as to reorganize debts in a manageable way or to save a home from foreclosure.   Unfortunately, many Chapter 13 Bankruptcy cases fail in the long-run.  Here is some advice for making Chapter 13 Bankruptcy work for you.

It is important to remember that Chapter 13 Bankruptcy is a long process – often five years – and it is important to do everything you can do to make the most of all that Chapter 13 Bankruptcy can do for you.

It's a Long Haul.

The first stop should be an experienced New Jersey Bankruptcy Attorney.  At the same time, you should consult a couple of good websites hosted by Bankruptcy Lawyers to educate yourself on the process.  Since you are reading this article, it appears you are already on the right track.

Bankruptcy Is A Game Changer.

The huge benefit of Chapter 13 Bankruptcy is it provides you with the opportunity to manage your debt based on your actual budget.  I’ll say that again – your budget.  It puts you in control of paying your debts according to your budget and schedule, not your creditors demands.

Chapter 13 Bankruptcy gives you power over your creditors and protects you from almost all legal action against you.

Do Your Part.

If Your Expect Extraordinary Results You Must Put Forth Extraordinary Effort

Chapter 13 Bankruptcy is a lot of work.  Be sure you stay involved in the process, make your payments on time and work with your Bankruptcy Attorney to develop a budget and plan you can afford in the long term.

Careful Planning Makes It Work.

The Budget. Chapter 13 is a reorganization of your debts.  We start by analyzing your income then preparing a household budget that you can live on.  Whatever money is left of your income after paying all of the expenses in your household budget then is paid to the trustee to fund your “Chapter 13 Plan.”

The Plan. The Chapter 13 Plan is a plan to pay your creditors.  Creditors are first sorted by priority into secured or unsecured creditors.  Secured creditors include your mortgage lender and car loan lender and they get paid first.  If there is any money left over after paying the secured creditors, that money is divided amongst your unsecured creditors such as credit cards.   There are other features of a Chapter 13 Plan that can be beneficial such as eliminating second mortgages or adjusting the terms of loans other than your first mortgage.

Get The Right Bankruptcy Attorney On Your Team.

In choosing an attorney, look for someone who will take the necessary time to work with you to develop a budget and a plan that you can live with for five years.  Too many people can’t make their plan payments which can lead to many different problems the most serious of which is to have your case dismissed.  This means you lose all of the rights you gained from the bankruptcy laws.

Advice For Making Chapter 13 Bankruptcy Work For You.

But what should you do during the bankruptcy process to make it run smoothly?

  • You should remain involved in your case the entire time it is pending.  This means keeping in touch with your New Jersey Bankruptcy Attorney and informing him/her of any changes in your income or expenses as well as to your email address, your home address, or phone number.
  • You must make your Chapter 13 Bankruptcy Plan Payments on time every time.  Missing a payment can have very significant consequences.  Don’t make this mistake.
  • Make sure you keep your mortgage and car payments up to date.
  • If you sense that you might fall behind on payments or if you have an emergency, call your bankruptcy lawyer.
  • Remember that your lawyer’s job is to create a payment plan that should work for you. You are the one who makes it work.
  • If you receive something in the mail that you don’t understand, contact your Bankruptcy Attorney right away.

Keep Focused On The Goal.

Obstacles Are those frightful things you see when you take your eyes off the goal – Henry Ford

Considering bankruptcy?  Todd Murphy, an NJ Bankruptcy Attorney, is the New Jersey Bankruptcy Lawyer people have trusted for over 15 years for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.  Our office is conveniently located to serve all of Essex County, Bergen County, Passaic County, Hudson County, Union County, Morris County, and Middlesex County