The Cassidy Law Firm Blog

Tuesday, April 22, 2014

How Long Does It Take to File a Chapter 13 Bankruptcy in Monmouth?

In recent years the number of bankruptcy filings has reached historic levels due, in large part, to the overall economic crisis with which the United States has been dealing. If you have been struggling to climb out of your own financial crisis for some time now, it may be time to consider bankruptcy. One of the most common questions we are asked about bankruptcy is “How long does it take to file a chapter 13 bankruptcy?” A better understanding of the chapter 13 bankruptcy process can answer that question.

Chapter 7 Bankruptcy in Monmouth

Most individual (or married) debtors use either chapter 7 or chapter 13 when filing for bankruptcy protection. To file a chapter 7 you must pass the “means test” which compares your income to that of similarly situated households in your area. If your income is below the median you may file a chapter 7. If it is not you must use another chapter. Qualifying to file a chapter 7 doesn’t mean you are required to file a chapter 7 bankruptcy. If you have valuable non-exempt assets that would be lost in a chapter 7 bankruptcy you may choose to file a chapter 13 even if you could file using chapter 7.

The major advantage to filing a chapter 7 bankruptcy is that the majority of your debts will be discharged without the need for you to repay them. In a chapter 13 bankruptcy, on the other hand, you will be required to repay most of your debts over an extended period of time. The advantage to using chapter 13 is that your assets are not at risk whereas in a chapter 7 bankruptcy the trustee can seize and sell any non-exempt assets and use the profits from the sale to repay creditors.

Chapter 13 Bankruptcy in Monmouth

In a chapter 13 bankruptcy you, along with your attorney, will be required to create a repayment plan that contemplates the repayment of most of your debts over an extended period of time. As a general rule, a chapter 13 repayment plan period lasts three to five years. The plan must be submitted to the bankruptcy court and approved by the judge. Upon the successful completion of the repayment plan any remaining dischargeable debts will be discharged, or eliminated.

If you have additional questions or concerns about the bankruptcy process in Monmouth, be sure to consult with an experienced Monmouth County bankruptcy attorney.

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