It is common for people living in New Jersey to have some debt. People may own a home and have a mortgage, they may have car loans, medical bills, credit cards, personal loans and other forms of debt. This by itself is not a bad thing and in some situations can in fact be a good thing, as long as people are able to make the monthly payments on the debt.
People may suffer a significant injury or have a serious illness, they may lose a job or have other events occur that limit their ability to earn an income. If this happens, they may not be able to keep making the monthly payments, which will increase the debt and before they know it, they may be overwhelmed by the debt. It may seem like they will never be able to rid themselves of it.
People in this situation may have options though and one of those is filing for bankruptcy. There are two main types of bankruptcy that individuals may consider, Chapter 7 and Chapter 13. Both will help rid people of their debt, but there are differences and based on those differences one may be a better choice than the other.
Pros and Cons of Chapter 7 and Chapter 13
Chapter 7 bankruptcy allows people to discharge their debt relatively quickly, but they are not able to keep some of their assets. There is no repayment plan though and people will not be required to make payments towards their debt. There are some debts that cannot be discharged though.
Chapter 13 involves a repayment plan and people will continue to make monthly payments. However, because they are making payments, they could keep their house, car and much of their personal assets. Also, through Chapter 13 there are more types of debts that could eventually be discharged.
Bankruptcy may seem like a negative process to have to go through for people living in New Jersey. However, filing for bankruptcy may be the best option for people to get rid of their debt and achieve a fresh start. This needs to be done correctly though and experienced attorneys could be helpful.