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Bankruptcy Process

Understanding Your Bankruptcy Options

Chapter 7 vs. Chapter 13 in New Jersey
If you’re overwhelmed by debt, facing foreclosure, dealing with wage garnishments, or simply struggling to keep up, bankruptcy may provide a structured and legally protected path forward.
The two most common types of consumer bankruptcy are Chapter 7 and Chapter 13. While both provide powerful relief through the automatic stay, they work in very different ways.

Chapter 7 Bankruptcy

  • A Fresh Start Through Debt Elimination
    Chapter 7 is often called “liquidation” bankruptcy, but in most cases, individuals keep all of their property due to available exemptions.
  • What Chapter 7 Can Do:
  • Eliminate credit card debt
  • Discharge medical bills
  • Stop wage garnishments
  • Halt lawsuits
  • Provide a clean financial reset

How the Process works:

Credit Counseling

Required before filing.

Filing the Petition

The case is filed with the Bankruptcy Court.

Automatic Stay

Immediately stops collections, lawsuits, and garnishments.

Trustee Review & 341 Meeting

A trustee reviews your case and conducts a brief hearing.

Discharge

Typically issued within 4–6 months of filing.

  • Who Chapter 7 is Best for:
  • Individuals with primarily unsecured debt
  • Those with limited income
  • Individuals with little or no non-exempt property
  • Clients seeking a relatively fast resolution
  • Chapter 7 provides speed and simplicity when the goal is eliminating unsecured debt and starting over.

Chapter 13 Bankruptcy

  • A Structured Plan to Protect Assets and Catch Up
    Chapter 13 is a court-approved repayment plan lasting 3–5 years. It is particularly powerful for homeowners and individuals with steady income.
  • What Chapter 13 Can Do:
  • Stop foreclosure and allow you to catch up on mortgage arrears
  • Prevent vehicle repossession
  • Repay tax debt over time
  • Protect non-exempt property
  • Consolidate debt into one manageable monthly payment

How the Process works:

Credit Counseling

Required before filing.

Filing the Petition

A repayment plan is proposed to the Court.

Automatic Stay

Immediately stops foreclosure, repossession, and collection actions.

Trustee Review & Confirmation Hearing

The Court approves the repayment plan.

Plan Payments

You make structured payments over 3–5 years.

Discharge

Remaining eligible debt is discharged after successful completion.

  • Who Chapter 13 is Best For:
  • Homeowners facing foreclosure
  • Individuals behind on mortgage or car payments
  • Clients with tax debt
  • Individuals with regular income who need time to catch up
  • Chapter 13 is not about liquidation — it’s about preservation and restructuring.

The Automatic Stay: Immediate Protection

In both Chapter 7 and Chapter 13, filing bankruptcy triggers the Automatic Stay — a powerful federal injunction that immediately stops:
  • Foreclosure sales
  • Wage garnishments
  • Bank levies
  • Lawsuits
  • Collection calls
 
This immediate protection often provides critical breathing room.

Which Chapter Is Right for You?

The right choice depends on:
  • Your income
  • The type of debt you carry
  • Whether you own a home
  • Whether you are behind on secured obligations
  • Your long-term financial goals
 
Every financial situation is different. What works for one client may not work for another.

We Help Clients Rebuild Every Day

Our office works daily with individuals and families across New Jersey to:
  • Stop foreclosure sales
  • Eliminate overwhelming debt
  • Protect homes and vehicles
  • Create realistic repayment strategies
  • Provide a clear path forward