When your financial ship first started sailing off course, you might have felt a bit panicked. That's not an uncommon reaction to money problems, especially if your situation involves threats of foreclosure on your home or other potentially dire consequences. Hopefully, your panic subsided after learning that many New Jersey homeowners are able to access options that help them secure immediate debt relief while simultaneously stopping foreclosure. Perhaps you are considering bankruptcy options to help you get your finances back on track.
There are various types of bankruptcy, so if you're wanting to pursue that route, it may help to learn more about the topic and determine which form of debt relief will best help you meet your immediate needs and long-term financial goals. The two most common types of bankruptcy are Chapter 7 and Chapter 13. A key toward a successful outcome in your situation may lie in your understanding of the differences between them. The good news is there are support networks in place to guide you.
How to determine if Chapter 7 or Chapter 13 is best
One of the issues you'll want to address when exploring bankruptcy options pertains to eligibility. Just because someone else may qualify for one type of bankruptcy doesn't mean you would also. The following list of facts explains qualification requirements and other useful information:
- Concerning Chapter 7 bankruptcy, there's a possibility that your income may be too high to qualify. This type of debt relief is reserved for those earning incomes below a certain level.
- Similarly, if you wish to apply for Chapter 13 bankruptcy, you must show proof of ongoing, reliable income that would allow you to meet the requirements of a restructured debt payment plan.
- The majority of homeowner-filed debt relief petitions are Chapter 7 bankruptcies.
- If keeping your house is one of your main priorities, you may want to pursue Chapter 13, as Chapter 7 typically involves liquidation of your assets in order to pay off debt.
- You may not be able to discharge certain debts under Chapter 7 if you have a past criminal conviction on your record.
- As opposed to Chapter 7, which liquidates most assets, Chapter 13 allows you to restructure your payment plans and retain ownership of your assets.
- Chapter 13 payment plans usually span over several years' time.
As you can see, it's possible to qualify for one type of bankruptcy plan but not the other, depending on your individual circumstances. Even if you are facing serious financial problems, you have reason to be hopeful, because most financial crises are temporary, especially if you know where to turn for immediate debt relief support.
Other New Jersey homeowners have sought help in finding solutions to their financial problems by meeting with experienced bankruptcy law attorneys.