Even New Jersey resident who have filed for Chapter 7 bankruptcy in the previous few years may find themselves with large amounts of debt that they are unable to pay. In some cases, this can be too soon to file for Chapter 7 again. This leaves options including waiting until it’s possible to file Chapter 7 again or filing for Chapter 13 bankruptcy instead.
A person can only file Chapter 7 bankruptcy once every eight years. In some cases, it may be possible for people who have once again found themselves in financial trouble to wait a short amount of time and file for Chapter 7 again. However, this might risk the possibility of lawsuits or foreclosure.
Another option is filing for Chapter 13 bankruptcy. This type of bankruptcy, depending on one’s circumstances, requires a person to repay all, some or none of their debt over a period of three to five years. It’s possible for a filer to have a monthly payment of as little as $100 per month to their creditors. While these payments may not pay down much of the debt, it will provide bankruptcy protection against lawsuits, garnishments or bank levies.
The most important step people who find themselves in this situation can take is to examine how they got into debt in the first place. In many cases, debt is the result of a medical crisis or a job difficult and can’t be helped. Sometimes, a person taking a long look at spending and saving habits may provide a solution in the future. However, to rectify the current crisis, a person may need outside help. An attorney may be able to provide insight on what type of bankruptcy is best and help postpone creditors from filling lawsuits or taking other legal action.
Source: Fox Business, “Too Soon to File for Bankruptcy Again?“, Justin Harelik, August 14, 2013