New Jersey bankruptcy attorney Daniel Straffi (https://www.straffilaw.com/what-is-the-difference-between-new-jersey-bankruptcy-chapter-7-and-chapter-13/) of Straffi & Straffi Attorneys at Law has published a comprehensive article explaining the critical differences between Chapter 7 and Chapter 13 bankruptcy in New Jersey. The article comes at a crucial time when many individuals and small businesses face severe financial challenges and need clear guidance on potential relief options.
The article by the New Jersey bankruptcy attorney explores the nuances of Chapter 7 and Chapter 13 of the U.S. Bankruptcy Code, which are the most frequently accessed forms of bankruptcy for individuals and small enterprises. Each chapter offers distinct routes and solutions for those overwhelmed by debt and seeking a fresh start.
“Understanding whether to file for Chapter 7 or Chapter 13 bankruptcy can be pivotal,” says New Jersey bankruptcy attorney Daniel Straffi. “Chapter 7 is generally quicker and involves liquidating nonexempt assets to pay off debts, while Chapter 13 involves reorganizing debts and setting up a repayment plan. Making the right choice depends on the specific circumstances and long-term financial goals of the debtor.”
The article provides a clear explanation of the eligibility requirements for each type of bankruptcy, what debtors can expect during the process, and the long-term impacts of filing. For instance, Chapter 7 bankruptcy is suitable for those with limited disposable income, allowing them to discharge most unsecured debts quickly. In contrast, Chapter 13 targets individuals with a regular income who can repay their debts over a three to five-year period under a court-approved plan.
Chapter 7 bankruptcy, often known as liquidation bankruptcy, involves a bankruptcy trustee appointed by the court to oversee the sale of the debtor’s nonexempt assets to repay creditors. This process typically concludes within four to six months, offering a relatively swift path to debt relief. However, it requires passing a means test to confirm that the debtor truly cannot pay the debts with their current income.
On the other hand, Chapter 13, known as a wage earner's plan, allows debtors to keep their assets, including their homes, by adhering to a repayment plan. This option is particularly beneficial for those who have a regular income above the state median and can afford to make structured payments to clear their debts.
Straffi’s article also touches on the implications of each bankruptcy type on the debtor’s credit score and future financial opportunities. While Chapter 7 remains on one’s credit report for ten years, Chapter 13 is removed after seven years, potentially allowing for a quicker recovery of one’s credit status.
For those caught in the dilemma of which bankruptcy chapter to file under, the article by Daniel Straffi offers crucial insights that can guide their decision. It emphasizes the importance of consulting with a knowledgeable New Jersey bankruptcy attorney to navigate the complexities of bankruptcy law effectively.
Straffi & Straffi Attorneys at Law encourage anyone grappling with debt and considering bankruptcy to read the informative piece. It serves not only as a guide but as a tool for making informed decisions that align with personal or business financial recovery plans.
About Straffi & Straffi Attorneys at Law:
Straffi & Straffi Attorneys at Law is a family-owned law firm based in Toms River, New Jersey, dedicated to providing personalized legal representation in the areas of bankruptcy and debt relief. The firm prides itself on offering compassionate, comprehensive legal advice and advocacy, helping clients regain financial stability and move forward confidently. They are committed to simplifying the legal processes and ensuring that clients receive the support they need to make informed decisions about their financial futures.
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