Not everyone is eligible for a chapter 7 bankruptcy. Even so, there is still a way to obtain protection from the court and settle all, or at least most, of the debt without further hardship. Talking with chapter 13 bankruptcy attorneys in West Milford, NJ is the best way to find out if this type of court protection would make a difference. Here are some of the things that the attorney can help the client understand.
The Payments Go Directly to the Court
As any of the chapter 13 bankruptcy attorneys in West Milford, NJ will inform clients, this form of bankruptcy requires establishing and following a payment schedule that’s approved by the court. All payments are remitted to the court and are then dispersed to the creditors. In most cases, the employer is obliged to withhold the funds from the paycheck and then forward the money to the court once a month. People who are self-employed assume the task of remitting the payments. As long as the payments are received and posted by the due date, the debtor remains in good standing with the court.
Tracking Progress
Many bankruptcy courts provide information to a national database known as the National Data Center. The debtor can set up access information about the bankruptcy using an online portal. This makes it easy to check the progress and know how much has been paid to each creditor currently. It is also a great way to confirm that payments have been received and posted.
How Long Will It Take?
Depending on the amount of debt the client has, it can take up to five years to settle all or most of the outstanding balance. One thing that not everyone knows about chapter 13 bankruptcies is that if the court determines some of the debt cannot be settled within that five-year maximum, any non-priority debts will be settled for pennies on the dollar or discharged in full. Whatever the situation, the debtor will have a fresh start once the five-year period is up.
After the process is underway, it will be a lot easier to sleep at night.
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