New Jersey residents who are struggling to keep up with credit card, auto loan or other types of debt may want to consider filing for Chapter 13 bankruptcy. One of the primary benefits of doing so is that a debtor will most likely be able to keep his or her home. This is because an automatic stay will postpone most foreclosures until a case has been discharged.

Those who file for Chapter 13 protection will be given the opportunity to pay their other debts in monthly installments over a period of three or five years. Therefore, individuals may want to think of a Chapter 13 repayment plan as a type of debt consolidation loan. To qualify for a reorganization bankruptcy, a person must have less than $394,725 in unsecured debts and less than $1,184,200 in secured debts. Furthermore, debtors must take an approved credit counseling course within 180 days of filing a bankruptcy petition.

At the time a person files for Chapter 13 protection, that individual will be required to submit a proposed payment plan to the case trustee. It will also be necessary to pay a $235 filing fee as well as a $75 administrative fee. Those who cannot afford to pay upfront may be allowed to pay those fees over a period of up to four months.

Filing for bankruptcy may allow debtors to put an end to credit phone calls, lawsuits and other collection activities. It may also allow a person to repay secured debts at a reduced monthly payment throughout the life of a repayment plan. In some cases, individuals may actually see their credit scores improve after their cases have been discharged. A legal representative may be able to provide more details about the process of filing for a reorganization bankruptcy.