You can discharge debt with Chapter 13 bankruptcy, and keep your assets.

Chapter 13 Bankruptcy is essentially a repayment program.  If you follow the repayment schedule that you and your attorney set up with the court, your unsecured debt is discharged at the end of the program.  That means that credit card debt, medical debt, and other unsecured debt (we’ll talk about secured v. unsecured in a moment) is considered no longer yours if you successfully complete the Chapter 13 plan.

Secured debt is debt that is backed by a physical object such as a home or a car.  These types of debt you must continue to pay on your Chapter 13 schedule.  Unsecured debt is the kind of debt that is NOT backed by a valuable physical object, such as credit cards, medical debt, store cards, furniture, etc.  During your Chapter 13 plan, you do not make payments toward your unsecured debt.

During your Chapter 13 plan, you MUST make 50 payments towards your SECURED debt ON TIME in order for you to complete the plan and get your unsecured debt discharged.  Todd Murphy, NJ Bankruptcy Lawyer, recommends that you set aside some emergency money so that you can ALWAYS make your SECURED debt payments ON TIME and complete your Chapter 13 plan, so that you can get your unsecured debt discharged.

Todd Murphy, NJ Bankruptcy Lawyer, will work with you to asses what is called your “disposable income”.  This is the income you have leftover at the end of the month after you pay your living expenses.  Your disposable income should be enough to pay your SECURED debt payments like your mortgage or car payment.  After you make 50 on-time payments, you will have successfully completed your Chapter 13 plan and you will be free of your unsecured debt!

Contact Todd Murphy to find out if you qualify for a Chapter 13 Bankruptcy plan.