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Should I file for chapter 11 bankruptcy?

While Chapter 11 bankruptcies are normally utilized by businesses, individuals can also pursue this option. Doing so takes a bit of work however, as Chapter 11 can be more complicated than Chapter 7 or 13, which most people go for when filing for bankruptcy. Debt.org explains what you need to know if you choose this debt relief option and how you can ensure the best possible results.

Much like Chapter 13, Chapter 11 bankruptcy reorganizes debt into a manageable payment plan, which entails making payments over a period of time. A person can opt to file or can be forced into filing for Chapter 13 when receiving petitions from three or more creditors. A repayment plan is then created, and creditors get to vote on whether it’s accepted. If not, you have the option of requesting a cramdown, which means creditors will be forced to accept it. You may also want to take the plan offered by creditors to protect your property. 

What are some benefits of Chapter 13?

When it comes to filing for bankruptcy, you may have a number of options in front of you. Some people move ahead with a Chapter 11 bankruptcy, while others turn to Chapter 7 or Chapter 13. It is vital to understand the benefits and possible drawbacks of each option and find out which makes the most sense for your personal financial circumstances. In this post, we will take a closer look at some of the reasons why Chapter 13 can be advantageous. As with any form of bankruptcy, it is essential to have a good understanding of the ins and outs of the process before filing a petition.

First of all, Chapter 13, along with other types of bankruptcy, can provide people with a fresh financial start and help them get their lives back on track. Chapter 13 is especially beneficial for those with regular income since it can enable them to pay back some or even all of their debts under a plan. Moreover, Chapter 13 may also be ideal for those who want to avoid foreclosure. By successfully filing for Chapter 13 bankruptcy, many people have been able to set up repayment plans that work out well and allow them to finally tackle their debts.

How can budget my finances?

If you’ve recently filed for bankruptcy in New Jersey, you may be concerned about rebuilding your finances once again. Creating a solid budget is crucial in this case, as it can help you cover recurring expenses while also putting money aside for the future. Because budgeting can be difficult for many people , Bankrate.com offers the following advice.

Know how much to save

Decades of debt accrual forces hospital network into bankruptcy

Even when a business in Hackettstown struggles with debt to the point of considering bankruptcy, its potential to continue to operate (and even grow) does not go away. Business owners might even use a bankruptcy case as the springboard needed to make organizational and cultural changes that place a company back on the path to sustainability. This may not be easy, however, as news of a bankruptcy might impact both a business' patrons as well as its employees, prompting them to call its future into question. 

network of hospitals in California currently faces this challenge after its leadership filed for Chapter 11 bankruptcy. The hospital system faces debts of more than $500 million that have built up over the course of 20 years. Yet the system's leaders have stated their intention to keep all six of the hospitals open using $185 million in secured financing. The hope is that the network will be able to sell some (or even all) of the hospitals in order to eliminate its accrued liabilities. Experts in healthcare finance point to the fact that while hospitals can survive bankruptcies, the care they offer does suffer somewhat due to staff turnover and issues negotiating with insurers. Despite these potential challenges, the leaders of this particular network of facilities are promising patients the same quality of care even as its bankruptcy case moves forward. 

How can your creditors force you into bankruptcy?

The common school of thought is that the primary benefit of a Chapter 11 bankruptcy is that it allows business owners in Hackettstown to continue to operate their companies while reorganizing their infrastructures and simultaneously stopping creditors from taking actions against them. Yet creditors may also view a Chapter 11 bankruptcy as a way of forcing a debtor company to stop avoiding its liabilities. Thus, your creditors can indeed try to force you and your company into bankruptcy. 

How can they do this? It depends on the number of creditors you have. According to Section 303 of the U.S. Bankruptcy Code, if you have more than 12 creditors, than at least three of those creditors must jointly file the petition against you. These creditors must have claims against you totaling at least $15,775 if unsecured or an equal amount secured through liens. Their claims must also not be contingent upon liability or subject to any bona fide dispute. 

How can I recover from chapter 7 bankruptcy?

If you’ve recently filed for chapter 7 bankruptcy in New Jersey, it may seem like there is no end in sight to the cycle of debt. However, it is possible to recover from chapter 7, provided you take the right steps. Forbes offer a few effective tips on how you can rebuild your credit and work towards a brighter financial future in the aftermath of a bankruptcy filing.

Create a Budget (and Stick to It)

What can I expect when filing Chapter 13?

If you’re having difficulty paying off outstanding debt in New Jersey, bankruptcy may be an option for you. In this case, chapter 13 may be helpful depending on your unique financial situation. But what can you expect from the process? USCourts.gov offers insight into what chapter 13 entails and what you need to know when filing.

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What business owners should know about Chapter 11 bankruptcy

Your New Jersey company has not done as well as you hoped, and now you are struggling to cover your debts and operating expenses each month. Efforts to find more funding have not been successful, but you are not ready to close your business. At The Law Offices of Jonathan Stone, we often explain the benefits of Chapter 11 bankruptcy to business owners who are struggling with debt.

While a Chapter 7 bankruptcy discharges debts and gives individuals a chance to start from scratch, you do not want to have to liquidate your assets. FindLaw explains that a Chapter 11 bankruptcy still gives you a fresh start, but without sinking your company. Rather than discharging all of your debts, you can restructure them through debt consolidation. Once this is done, your monthly payments are manageable, and your business can become profitable.

How Can I Recover After Bankruptcy?

Filing for Chapter 7 bankruptcy can be a good way for people in New Jersey to take control of their debt once and for all. However, you want to make sure your finances remain stable after filing, or you could wind up in the same exact predicament after so long. In this case, MoneyCrashers.com offers the following tips on how you can bounce back after bankruptcy.

While Chapter 7 can get rid of any unsecured debt (such as credit card debt), it won’t necessarily remove all of your debt. For instance, if you owe money for student loans or child support payments these debts will remain after you file. Accordingly, it’s important to continue paying off any remaining debts to prevent more damage from occurring to your credit score.

Credit counseling prior to personal bankruptcy

Many of the Hackettstown residents who come to us here at our offices here at Jonathan Stone Attorney at Law are initially only concerned about what form of personal bankruptcy they should file: Chapter 7 or 13? Yet we counsel them that before they start getting too deep into their plans, they should first seek credit counseling. Like them, you might assume that this is something that we recommend to clients. Yet again like them, you might be surprised to learn that this is not a recommendation; rather, it is a requirement under federal law. 

Per the U.S. Bankruptcy Code (as shared by the Cornell Law School), no debtor may file for bankruptcy without first having gone through credit counseling within the previous 180 days. You must meet with the credit counselor and create a budget that would allow you to pay off your current debts. Your income and the other assets available to you are secondary in this evaluation because its main purpose is to see if it feasible for you to pay off all your liabilities on your own. Once that budget has been established, you must include it in the paperwork you file with the court in your bankruptcy case. 

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