Williamstown Chapter 7 and Chapter 13 Bankruptcy
If it’s getting increasingly difficult to make minimum payments on credit cards and loans, or you’ve missed payments on either in order to pay your mortgage, it may be time to discuss your situation with a Williamstown Chapter 7 or Chapter 13 bankruptcy attorney. Unfortunately, too many people wait until they’re facing the loss of their home before they take action because of the stigma associated with bankruptcy. As result, people drain their 401(k)s, deplete their savings, draw on their children’s college funds or try at the last minute to modify their home loans.
Why Bankruptcy Can Save You Money and Your Home
When people cash out their 401(k)s or deplete their savings, they lose the value of what their money would have earned over the years. Cashing out a 401(k) will result in significant tax penalties (up to as much as 30 percent of the value of what you cash out), while essentially taking money you would have earned prior to your retirement.
Declaring bankruptcy, however, can wipe out your unsecured debt while saving your home. Although a Chapter 7 bankruptcy typically stays on your credit report for 10 years and a Chapter 13 remains for seven to 10, the money you can save can be significant — especially if you don’t have to touch your savings or 401(k) accounts.
Chapter 7 and Chapter 13 — Understanding the Difference
If your income is at or below the New Jersey median income for families of a similar size, you can qualify for Chapter 7 bankruptcy. Chapter 7 bankruptcy allows you to wipe out unsecured debt — credit cards, unsecured loans, medical bills, even second mortgages and taxes in some cases.
If you don’t meet the income requirements for Chapter 7, you can still file for Chapter 13 bankruptcy. Under the terms of Chapter 13, you put together a repayment plan that combines your unsecured debt into a monthly payment. If the bankruptcy trustee and judge approve of your repayment plan, you’ll be required to adhere to its terms for anywhere from three to five years. After the time period of your repayment plan is over, any unsecured debt you owe will be wiped out as in Chapter 7.
Avoiding Losing Your Home through Chapter 7 or Chapter 13 Bankruptcy
Under both Chapter 7 and Chapter 13 bankruptcy, you should have more disposable income each month to continue making payments on your home. Consequently, if you are able to continue making monthly mortgage payments, you can avoid foreclosure.
Additionally, once you file for bankruptcy, an automatic stay is issued preventing debt collectors and banks from continuing collection and foreclosure actions against you. If you are facing foreclosure or continue to receive phone calls and letters from debt collectors, filing for bankruptcy will put an end to both temporarily, providing you with time to put your finances in order.
Contact Williamstown, New Jersey, Bankruptcy Attorneys
If you’re unable to pay your credit card bills or are facing foreclosure on your home in Williamstown, contact Williamstown Chapter 7 and Chapter 13 bankruptcy attorneys at Neuner & Ventura, LLP, today to learn how we can help you.
*Free consultation for individuals and most small businesses. A follow up meeting may be required. We reserve the right to charge for consultations involving review of existing cases, divorces or litigation.